This order shall dispose of Civil Writs Nos. 81 and 82 of 1963.
The sole point that has been raised in these petitions is that the order of transfer made by the first respondent with regard to the assessments of the petitioner firms in respect of the years prior to the assessment year 1961-62 was illegal and invalid.
Now, the impugned orders in both cases were made by the Commissioner of Income-tax under section 127 of the Income-tax Act, 1961. That section provides that the Commissioner may, after giving the assessee a reasonable opportunity of being heard in the matter and after recording his reasons for doing so, transfer any case from one Income-tax Officer subordinate to him to another also subordinate to him. Mr. Tuli, who appears for the petitioner in both the cases submits that the orders for transfer could not have been made under section 127 with regard to the assessment years prior to the year 1961-62 because the Income-tax Act of 1922 had been completely repealed except for the very limited purposes specified in section 297(2). The Explanation appearing in section 127 does say that the word 'case' means all proceedings under 'this Act' in respect of any year which may be pending on the date of such order or direction or which may have been completed on or before such date, and includes also all proceedings under the Act which may be commenced after the date of such order or direction in respect of any year, but section 297, which deals with the repeals and savings, provides that where a return of income-tax had been filed before the commencement of the new Act by any person for any assessment year, proceedings for the assessment of that year may be taken and continued as if the new Act had not been passed. In other words, those proceedings had to be continued under the Act of 1922. The power of transfer was conferred under that statute by section 5(7A).
Now, the words 'proceedings for the assessment' would include the entire process by which the assessment is to be made which would clearly cover the machinery provided for making the assessment. The power of transfer is an integral part of that machinery. There seems to be little doubt, therefore, that the transfer in the present cases could be ordered under section 5(7A) of the Act of 1922. That section, however, did not provide in so many words that reasons should be given when an order of transfer is made. Mr. Tuli has also sought to raise the contention that the impugned orders were bad, because reasons had not been stated. Section 127 of the new Act contains that requirement but the old section 5(7A) was silent on it. Faced with this situation Mr. Tuli submitted that since the orders were purported to have been made under section 127 of the new Act it was necessary for the Commissioner to state the reasons for ordering transfer. This point was never taken in the writ petitions and Mr. Awasthy, who appears for the respondents, submits that if any such point had been raised in the petitions, he would have produced the records before this court to show that the Commissioner had given certain reasons, although it appears that in the communication which was received by the petitioners that part of the order was not mentioned. Mr. Tulis main grievance is that the petitioners will have to incur a good deal of expense on account of taking all the books and other relevant material to Amritsar and that the transfer was altogether uncalled for in the present cases. Mr. Awasthy has given an assurance on behalf of the department that every effort will be made by respondent No. 2 to whom the cases had been transferred to carry on the proceedings at Ludhiana which is the place where the assessees carry on their business.
In view of all this, we find no merit in these petitions which are dismissed, but, in the circumstances, there will be no order as to costs.