By TIOL News Service

CUTTACK, DEC 22, 2016: THE ISSUE IS - Whether transfer of case from the jurisdiction of one ITO to another due to policy decision of re-structuring in the I-T Department, without affording hearing opportunity to assessee, can be declared as illegal, where the assessee is not prejudiced by such decision. YES IS THE VERDICT.

Facts of the case:

The assessees having been assessed to income tax by the ITO, Rourkela, notices u/s.153(c) and 142(1) were issued to them for filing returns for the A.Ys 2008-09 to 2014-15. The Department in the meanwhile intimated the assessees that the jurisdiction of their cases has been transferred to another ITO by virtue of order passed u/s.127(2). After receiving the intimation, the assessees submitted that the copy of the order u/s.127(2) was not provided to them and as such, they were not in a position to put forth their grievances and challenging the same they have made representations. before opposite party no.5 to provide copy of the order passed by opposite party no.2.Opposite party no.5 directed the assessees to appear and to satisfy the authority with respect to the decision taken U/s.127. The opposite parties affirmed the decision of transfer of jurisdiction from Rourkela to Sambalpur.

On appeal, the HC held that,

++ The reasons behind taking the decision of transfer, i.e. restructuring of the Department and even if the assessees would have been provided an opportunity of being heard before taking the decision, no material change would have come. It is not that the cases of the assessees have only been transferred, rather by virtue of the policy decision, the cases of other assessees have also been transferred. Furthermore, there is no mala fide alleged against the authorities. The assessees when came to know about the transfer of their cases from Rourkela to Sambalpur, they made representations before the authority that copy of the order be provided since decision has been taken without providing an opportunity of being heard. The authorities have taken into consideration this aspect of the matter and passed a well reasoned order showing the reason that due to the policy decision of re-structuring of the Income Tax Department in the area concerned, the decision has been taken to transfer the cases from Rourkela to Sambalpur and by this the assessees are not going to be prejudiced in any way. The underlying object of the decision is equitable distribution of work and as such the order passed by the authorities is for administrative convenience. The authorities have taken into consideration the grievance of the assessees that if they will feel any inconvenience, they may make request before the authority to hear their matter at Camp Court, Rourkela in this way also the interest of the assessees have been protected.

(See 2016-TIOL-3077-HC-ORISSA-IT)