DMK Charitable Trust Vs Principal Chief CIT (Exemptions) (Madras High Court)
Madras High Court held that transfer order under section 127 of the Income Tax Act is legally untenable on account of various procedural lapses. Hence, the transfer order is quashed and matter is remanded bank for passing fresh orders on merits.
Facts- Vide the present writ petition, the petitioner challenges the impugned orders/notification both dated 19.01.2021 passed by the 3rd respondent i.e. the Commissioner of Income Tax (Exemption) under section 127 of the Income Tax Act. The petitioners herein have challenged the Impugned Orders/Notification dated 01.2021 on the ground that they have been issued in gross violation of Section 127(2) of the IT Act by the 3rd Respondent.
Conclusion- Held that the impugned transfer order under Section 127 of the IT Act is legally untenable. The transfer was executed in blatant violation of the mandatory procedural safeguards, including the requirement to provide the petitioners with a reasonable opportunity of being heard and the necessity of recording specific, valid and legally justifiable reasons. The vague and unsubstantiated justification of “coordinated investigation” fails to meet the statutory and judicially established standards for a valid transfer of jurisdiction. Thus, the Orders dated 19.01.2021 as well as the Notifications dated 26.02.2021 & 04.03.2021 are hereby quashed and these cases are remitted back to the 3rd respondent viz., the Commissioner of Income Tax (Exemptions), Chennai for passing fresh orders on merits and in accordance with law, within a period of three months from the date of receipt of a copy of this order.
