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Assam Surgical Company and anr., Vs. Central Board of Direct Taxes and ors. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtGuwahati High Court
Decided On
Case NumberCivil Rule Nos. 686 to 695 of 1982
Judge
Reported in(1983)35CTR(Gau)18,[1984]145ITR400(Gauhati)
ActsIncome Tax Act, 1961 - Sections 127 and 132
AppellantAssam Surgical Company and anr., ;sohan Singh Rajkumar Narula, ;akash Pharma Pvt. Ltd., ;bharat Bhus
RespondentCentral Board of Direct Taxes and ors.
Appellant AdvocateJ.P. Bhattacharjee, ;B.P. Saraf and ;G.K. Joshi, Advs.
Respondent AdvocateG.K. Talukdar and ;D.K. Talukdar, Advs.
Cases ReferredChhugamal Rajpal v. S.P. Chaliha
Excerpt:
- lahiri, j. 1. we propose to dispose of the bunch of civil rules by a common order. the petitioners have claimed their 'different and distinct entities' but the revenue described them as 'narula group'. we take the midpoint and call them as 'the petitioners', for brevity and convenience. the facts are similar, the questions of law involved are also the same and our common anxieties are to deliver quick but deliberate justice. we hasten to deliver oral judgment in court as one of us (hansaria j.) is going to an outlying bench for about two weeks.2. these writ applications arise out of tax evasion proceedings. the petitioners have questioned the validity of the order dated may 10, 1982, passed by the central board of direct taxes, new delhi, 'the board' for short, transferring the cases of.....
Judgment:

Lahiri, J.

1. We propose to dispose of the bunch of civil rules by a common order. The petitioners have claimed their 'different and distinct entities' but the Revenue described them as 'Narula group'. We take the midpoint and call them as 'the petitioners', for brevity and convenience. The facts are similar, the questions of law involved are also the same and our common anxieties are to deliver quick but deliberate justice. We hasten to deliver oral judgment in court as one of us (Hansaria J.) is going to an outlying Bench for about two weeks.

2. These writ applications arise out of tax evasion proceedings. The petitioners have questioned the validity of the order dated May 10, 1982, passed by the Central Board of Direct Taxes, New Delhi, 'the Board' for short, transferring the cases of the petitioners from the Income-tax Officer at Gauhati to the Income-tax Officer, Company Circle in New Delhi, in exercise of the power conferred by Section 127 of the I.T. Act, 1961, for short 'the Act'.

3. It is claimed by the petitioners that they are residents of Gauhati, and the Income-tax Officer, for short 'ITO', at Gauhati had made assessments of their income for last several years. However, searches of the premises of their firm, residential premises of the partners/shareholders/offices, by the Department under Section 132 of 'the Act', resulted in the seizure of books of account, documents, jewellery and allegedly 'undisclosed funds'. The Commissioner of Income-tax, Shillong, promptly ordered transfer of all the cases of the petitioners to the ITO, A-Ward, Special Circle, Gauhati. Enquiries uncovered funds, assessments made to the prejudice of the petitioners who appealed. While the appeals were pending, they received notices on February 9, 1982, u/s, 127(1) of 'the Act' calling upon them to show cause why their cases should not be transferred from the ITO, Special Circle, Gauhati to ITO, New Delhi. The extract of the notice is quoted :

'In exercise of the powers conferred by Sub-section (1) of Section 127 of the Income-tax Act, 1961 (43 of 1961), I, Commissioner of Income-tax, North Eastern Region, Shillong, hereby transfer the cases of the persons, the particulars of which are mentioned in the schedule below from the Income-tax Officer mentioned in column (4) to the Income-tax Officer mentioned in column (5) thereof...... '

4. On receipt of this notice the petitioners submitted written objections. Therein the petitioners objected to the transfer, inter alia, on the grounds, (1) that the case had already been transferred by the CIT, Shillong, in exercise of his power under Section 127, for administrative convenience ; (2) that they had extensive dealings with firms in the North Eastern Regioncomprising of the States and Union Territories of Assam, Meghalaya, Tripura, Nagaland, Arunachal Pradesh, etc.; (3) that they had dealings with these firms and transacted business from Gauhati, Assam ; and (4) they could not understand the meaning of the expressions 'in their group' as contained in the above notices. In short, the petitioners stated that they had dealings with the firms, etc., of the North Eastern Region and had not had any connection with any firm, company or group in any other part of the country. Further they claimed that if the cases were transferred they would sustain heavy pecuniary losses and expenditure, and referred to the provisions of Section 80VV of 'the Act' inserted by the Taxation Laws (Amendment) Act, 1975, which came into force from April 1, 1976, and allowed a ceiling of Rs. 5,000 only by way of deduction of any expenditure incurred in respect of any proceedings before any I.T. authority relating to determination of any tax liability. They indirectly objected to the transfer on the ground that they had no 'Delhi connection' nor had they any connection with any group, and, as such, they could not get the meaning of the expressions 'reason for the proposal is that searches have been in their group......'. These were substantially theobjections raised in their objection (vide annex. III to the petition). They stated that, thereafter, they received the orders issued by the Undersecretary of 'the Board' transferring the cases to the ITO, Company Circle XXIV, New Delhi. The extract of the order read as follows:

'J. No. 137 : In exercise of the powers conferred by Sub-section (1) of Section 127 of the I.T. Act, 1961, (43 of 1961), and of all other powers enabling it in this behalf, the Central Board of Direct Taxes hereby transfers the cases particulars of which are mentioned in column 3 of the Schedule hereto annexed, from the ITO mentioned in column 4 to the ITO mentioned in column 5 thereof. Search conducted in this group has revealed extensive business connection at Delhi. The transfer is effected to facilitate co-ordinated investigation in all connected search cases by one ITO at Delhi......'

5. The petitioners questioned the validity of the order of transfer in the original writ petition on the grounds: (1) that the order of transfer was passed without considering their objections; (2) that there was no reason or justification for the transfer from Gauhati to New Delhi, as they had no business connection at Delhi; (3) that no 'reasonable opportunity of being heard' was granted to them, as the notices were served on them on February 9, 1982, fixing the date of hearing on February 10, 1982; (4) that the proposed reasons in the notice issued under Section 127 of the Act were basically different from the reasons recorded in the transfer order ; (5) that the transfers would cause hardship and inconvenience to the petitioners and it was colourable exercise of thepower; and (6) that the conditions precedent for exercising power under Section 127, namely, reasonable opportunity of being heard and recording of the reasons were not done, and, as such the impugned orders were bad.

6. We were taken aback, when the petitions were moved, as to how 'the Board' could issue notices under Section 127 fixing the date of personal hearing on February 10, 1982, at 11 a.m. at Delhi, when it served notices on the petitioners on February 9, 1982. We felt that it was surely a case of denial of the right of personal hearing and refusal of 'reasonable opportunity of being heard'. Accordingly, we called upon the respondents to produce the records. Now, we find a different story emanating from the records as we note that the petitioners sent two telegrams which read as follows ;

'REFERENCE OUR NO. 185/14/82-IT(AI) DATED 30th JANUARY, 1982, UNDER SECTION 127(1) NOTICES SERVED ON NINTH FEBRUARY, 1982. EVENING ONLY AAA NOT POSSIBLE TO APPEAR ON TENTH FEBRUARY, 1982, AT DELHI AAA PRAY ALLOW SIXTEEN DAYS TIME AAA RAJKUMAR NARULA ASSAM SURGICAL COMPANY SOHAN SINGH RAJKUMAR NARULA ASSAM SURGICAL COMPANY DEPARTMENTAL STORES BHARAT BHUSHAN NARULA ASSAM SURGICAL AND PHARMACEUTICALS PRIVATE LIMITED TARARANI NARULA AKASH PHARMA PRIVATE LIMITED NEERJA NARULA SNEH NARULA SYLVIA GREEN MOMIN.'

7. The petitioners stated that they received the notice on the ninth and prayed for 16 days' time to appear. These telegrams show that the petitioners acted conjointly and that they merely prayed for 16 days' time to appear before the Board. Apart from these the records revealed that the grievances of the petitioners that they did not get any 'reasonable opportunity of being heard' were factually not correct. We must express that the petitioners tried to suppress material facts and they were about to obtain rule nisi, a stay order which would have stalled the proceedings further. On production of records, we found that the petitioners instructed a chartered accountant to represent their cases before the Board on February 10, 1982, and he appeared before 'the Board' on the 10th and prayed for adjournment of the proceedings till February 25, 1982, and the Board readily granted adjournment till February 25, 1982. This was precisely the prayer made by the petitioners in their telegrams. So, the Board granted the prayers made by the petitioners in the telegrams and through their authorised representatives, Mr. A. K. Sud and Shri K. K. Chawla.

8. On February 25, 1982, the representatives of the petitioners again prayed for further time, the Board allowed time till March 9, 1982,stating clearly that no further adjournments would be allowed. Notwithstanding the peremptory order, the said representatives again prayed for time. Their prayer for hearing at Gauhati was rejected and the Board proceeded to consider the merits of the applications filed by the petitioners. Upon a consideration of all the points raised by the petitioners, which are almost similar to those taken up by the petitioners in the writ applications, the Board was satisfied that the cases of the petitioners should be transferred to Delhi. We have examined the records and permitted the counsel for the petitioners to examine the same. It reveals clearly that on February 10, 1982, Mr. A. K. Sud, chartered accountant, attended on behalf of the petitioners and requested for 15 days' time to take instructions from the petitioners. On February 25, 1982. Shri Sud and Sri Chawla appeared and filed a letter and prayed for time. The prayer for adjournment was granted, the case was fixed on March 9, 1982, at 10 a.m. It was specifically stated, 'no further adjournment will be granted'. On March 9, 1982, the two representatives of the petitioners appeared and said that they proposed to see the Inspector (Investigation) on the 29th March, at 11 a.m. to explain the point of view and they would also send a self-contained petition to the Director with a copy to the Board before March 26, 1982. Their prayers were allowed. They also prayed for hearing the matter at Gauhati 'as the party would like to explain verbally certain reasons some of which were personal and social' and as the petitioners had their own lawyers and chartered accountants at Gauhati it would not be possible for them to come to Delhi for the hearing. Thereafter, the Deputy Secretary placed the entire records before the Board with his detailed note, and the Board approved the proposal of transfer of the cases from Gauhati to Delhi.

9. It appears that the present cases, 11 in number, formed part of 18 cases of 'Narula group' which were proposed to be centralised with ITO, Company Circle XXIV, New Delhi. The other 7 cases were being assessed in Delhi. Preliminary enquiries revealed concealment of income of Rs. 50 lakhs. Shri R. K. Narula of Gauhati was the 'main person' who is being assessed at Gauhati. Investigations revealed bogus purchase worth about Rs. 30 lakhs by the Delhi office of Sri Narula's firm. So the investigation could be conducted only at Delhi because such purchases were from the parties located at Delhi. Enquiries revealed that the parties were bogus and non-existent. It also appears from the record that the representative of the petitioners appeared on February 10, 1982, and requested for 15 days' time to obtain instructions from the petitioners, and, accordingly, the cases were adjourned till February 25, 1982. OnFebruary 25, 1982, the representatives filed a letter asking for time and the cases were further adjourned till March 9, 1982, with emphasis that no further adjournment would be allowed. On March 9, 1982, they appeared before the Board. It was observed that the assessees were given enough opportunity of hearing but they did not avail of it. The petitioners were fully aware of the searches in their group of cases and there was no shortfall which caused prejudice to the petitioners. All the cases at Delhi were inter-connected with the cases of the petitioners and there was need to have them centralised at Delhi. The formalities of law had been complied with and the principles of natural justice duly observed. All the objections raised by the petitioners were considered. On perusal of the report the Board approved the actions and transferred the cases to Delhi. A formal draft order, in terms of the order of the Board, was directed to be put up and the same was placed before the Board, which approved the final order, copy of which is annex. IV to the petitions. The names of the 11 assessees at Gauhati are in the schedule. We find from the records the names of the Delhi firms directly connected with the petitioners, 7 in number, located at Delhi.

10. The first thing that strikes us is that the petitioners tried to suppress material facts. They never said that their representatives attended the proceedings held at Delhi and what prevented their representatives to place the points raised by them in their written objections. However, they refrained from doing so for reasons unknown. The representatives could have obtained all necessary information about which the petitioners had even the slightest of doubt. If they were unaware of the 'Narula Group' of Delhi, they could have ascertained it from the Board which they did not. In any view of the matter we feel that the petitioners suppressed the facts but had to admit only when the records were produced by the respondents. They admitted that their cases were represented before the Board at New Delhi but that too after we had called for and obtained the records. This by itself is sufficient ground for rejection of the writ applications; however, we do not propose to do it. We propose to dispose all the points raised by them in their writ applications.

11. The first point urged before us was that the petitioners were not given 'reasonable opportunity of being heard'. We have set forth above how the Board granted indulgence to the representatives of the petitioners granted adjournment after adjournment. The petitioners claim that they should have been heard at Gauhati. It does not stand to scrutiny why such a simple matter should require 'the Board' to come down to Gauhati when the petitioners and/or their legal representatives could have placed the case of the petitioners set out in their written objection. The petitioners had prayed for 16 days' time to appear before the Boardbut the Board granted more than the period asked for in the telegrams. From February 10, 1982, the hearing was adjourned to February 25, 1982, and further adjourned to March 9, 1982. Even, thereafter, the representatives were given opportunity to place their points in writing. No reasonable or plausible ground was there for hearing the matter at Gauhati. The unsubstantial and feeble grounds were that the parties would like to explain verbally certain reasons some of which were personal and social. They could have gone to Delhi, explained them before the Board. The grounds by themselves called for rejection in limine and the Board has exercised its discretion which it had and this court under Article 226 of the Constitution cannot sit as an appellate court and revise the discretion. Even before us, counsel for the petitioners failed to show any ground whatsoever for hearing the matter at Gauhati. We do not find any force in the contention and the same is rejected.

12. The next submission is very thin and faintly argued as it had no strength, force or vitality. It has been urged that once the Commissioner had exercised his jurisdiction under Section 127(1) 'of the Act', it estopped 'the Board' to transfer the cases from Gauhati to Delhi. The contention overlooks that the Commissioner has jurisdiction to transfer cases within his jurisdiction whereas the power of the Board is wide and large. It can transfer cases from the jurisdiction of one Commissioner to another. The exercise of power of the Commissioner does not exhaust the power of transfer by the Board. The Board has independent power to transfer cases under Section 127. In the result, the contention fails.

13. The next contention is that the notice calling upon the petitioners to show cause why the cases should not be transferred contained vague statements as it stated that the searches had been conducted 'in their group', the searches revealed their activities in Delhi and to facilitate investigation the cases should be transferred and assessed in Delhi. The Delhi connection of the petitioners is writ large from the records placed at our disposal. Barring a bare denial that the petitioners had no connection with the Delhi group, we do not find any other assertion by the petitioners. The Board is the highest authority. It perused the entire records, obtained necessary information, reports and concluded that the petitioners and the Delhi firms, 7 in number, duly listed 'are one group'. The concealed income, it is stated in the affidavit of the Department, is about Rs. 50 lakhs. Therefore, it cannot be said that the ground for transfer is vague and without any material. We are satisfied from the material produced that there was reasonable cause for the Board to hold that the petitioners and the Delhi firms form 'one group'. If, under these circumstances, the investigating agencies consider that it is just, prudent and expedient to have centralised investigation of the cases inNew Delhi, it is hardly possible for us to hold 'the reason' as bad or 'no reason at all' for the transfer of such cases under Section 127 of the Act.

14. The next contention is also very thin. The petitioners claim that it would cause economic loss. In any case of transfer from one place to another the party must be affected. However, Section 80VV of 'the Act', allows deduction of expenses to the tune of Rs. 5,000. The petitioners have 11 cases and in each of the cases they are perhaps entitled to deduction at the rate of Rs. 5,000. Be that as it may, if transfers are genuine, valid and lawful, some expenditure on the alleged tax dodgers cannot be a legal ground to prohibit transfer. Expenses likely to be incurred cannot be a ground not to transfer a case if reasonable grounds exist. This ground, in our opinion, is irrelevant in the context of alleged concealment worth Rs. 50 lakhs. We reject the contention as untenable.

15. Similarly, the ground that it would require the petitioners to take 'tons of documents' does not appear a reasonable ground to forestall a vigorous investigation to detect 'undisclosed income' for the public good and common good. It has been rightly contended by Mr. Talukdar, learned standing counsel for the Revenue, that the investigating agency in Delhi is better equipped than the investigating agency at this end. However, we do not express any final opinion but state this much and no further that the contention has strong force.

16. The next contention is that the petitioners were deprived of their statutory right to show cause against the proposed transfer as the ground of transfer in the final order is different. The petitioners could have obtained all the necessary and so-called obscured facts or materials if they were up and about. The transfers have been effected to facilitate coordinated investigation of all the connected cases. The search conducted in 'the group' revealed extensive business connection of the petitioners in Delhi. The petitioners could have asked for the documents or information which revealed their extensive business connection in Delhi, which they did not. We do not find that the show cause notice is in any meaningful way different from the final order or that the petitioners were deprived of the opportunity to show cause. The reason for the proposed transfer was that the searches had been conducted in the petitioners' group which revealed their activities in Delhi and to facilitate investigation of all the cases it was desired that these cases should be investigated and assessed in Delhi. Substantially the grounds are same with certain phraseological changes here and there, which did not affect the petitioners prejudicially. In the show cause, it was clearly stated that the Board proposed to transfer the cases to Delhi for the reasons that the searches conducted in the group revealed the activities of the firm atDelhi and to facilitate investigation of the cases connected with the Delhi group, required transfer of the cases for co-ordinated investigation and assessment. The petitioners understood it and, therefore, in their written objection they took up a specific ground that their activities were confined within the North Eastern region. It shows that they were fully aware that the case of the Revenue was that the petitioners had business connection in Delhi. On the facts and in the circumstances of the case when the petitioners were given an opportunity to appear in person before the order of transfer had been made and when the petitioners engaged their representatives to enquire into the matter and to support their show causes, the petitioners cannot come round and say that there was any shortfall in the show-cause notices for which the impugned orders of transfers are liable to be set aside. The petitioners had known the allegations of their Delhi connection, submitted their replies to it. If not, they could have obtained the particulars of the parties with whom their connections were sought to be established, but when the petitioners did neither, it cannot be said that they were prejudiced. The Board granted them a hearing, allowed them to file written objections and also considered the written objections, so it is nothing but futile exercise of the petitioners to claim that they were deprived of a reasonable opportunity to show cause. The contention fails.

17. Counsel for the petitioners contended that the grounds of transfer did not justify the Board to exercise the jurisdiction under Section 127 of 'the Act'. In short, counsel submits that it is 'a purported exercise of jurisdiction' and no person instructed in law could have pissed the transfer orders on the grounds set forth in the orders. What are the grounds In a nutshell, search was conducted in Gauhati, and concealed income recovered. Similar searches and recoveries in Delhi revealed that the petitioners' firm had connection with the Delhi firms and they were 'one group'. Therefore, there should be co-ordinated investigation at one place and Delhi was chosen the place for investigation and assessment. These reasons have been assailed as 'no ground'. Counsel for the petitioners has relied on Sagarmal Spinning and Weaving Mills Ltd. v. CBDT : [1972]83ITR130(MP) , where the Board issued show-cause notice under Section 127 of the Act as to why cases pending at Indore should not be transferred to Bombay and the reason set forth read 'facility for investigation'. The order of transfer did not ascribe any reason at all. The Board also could not produce any record that there existed any reason for the transfer independently of the reason contained in the show-cause notice. The High Court held that 'facility of investigation' could not be 'a sufficient reason for transfer' of a case under Section 127. However, in the instant case the order is not a bald one. The reasons for transfer are substantial, strongand potent--the Delhi connection of the petitioners--and in Delhi similar cases of the group were being investigated ; so, co-ordinated investigation was necessary. In Sagarmal's case : [1972]83ITR130(MP) , the High Court held the ground to be vague; so the transfer was not in compliance with the requirements of Section 127. However, we extract a pertinent observation of the High Court (p. 135) :

'In the present case the reason is made clear in the return filed in this court, wherein it has been stated that it is suspected that the petitioner-firm has been carrying on business under different names and those firms are all inter-connected. Therefore, it was thought proper by the departmental authorities that the cases should be tried at Bombay where other cases are being tried. That will facilitate the task of investigation into the matter whether the petitioner has been guilty of evasion of taxes. If that, had been given as the reason in the order of transfer, probably there would have been no occasion for interfering with the said order.'

18. Therefore, the facts of Sagarmal are different and the obiter observation extracted accords with our firm view expressed. The reason for transfer in the instant case is to have co-ordinated investigation of all the cases in Delhi to entrap the tax-dodgers. In this view of the matter we are of the opinion that the decision supports the case of the respondents rather than the case of the petitioners.

19. The petitioners admit that the result of the search revealed undisclosed income of the petitioners. The Department states that the searches conducted in Delhi also revealed similar facts plus the connection of the petitioners with the Delhi group. There is no allegation of malice or bias of the Board and/or its members. If for expeditious and efficient investigation co-ordinated actions are called for and the connection is established between the firms, the exercise of power of transfer must be held to be valid and in accordance with the provisions of Section 127 of the Act.

20. The next contention is that the Board exercised its power 'mechanically'. We had the advantage of perusing the past record which the counsel for the petitioners also had. We have perused that the Board has exercised its power under Section 127 on perusal of the materials made available to it. The written objections were considered, the grounds on which the cases were sought to be transferred were examined and the Board approved the proposed order of transfer of the cases to Delhi. Notwithstanding the clear facts revealed from the records, learned counsel for the petitioners has reliedon Chhugamal Rajpal v. S.P. Chaliha : [1971]79ITR603(SC) . The assessment was completed after due enquiry, thereafter the ITO issued a notice under Section 148 of the Act initiating reassessment proceedings for that year. The assessee filed a writ petition and claimed that the requirements of Section 151(2) of the Act were not complied with but it was dismissed by the High Court. The Supreme Court directed the Department to produce the records to show that the ITO had complied with the provisions of Sections 148 and 151(2) of the Act. Only the report submitted by the officer to the Commissioner and the latter's order thereon were produced. In his report the officer referred to certain communication received by him from which it appeared that 'the creditors were name-lenders' and the transactions were bogus, therefore, proper investigation regarding the loans taken by the assessee was necessary. It may be noted here that their Lordships observed that in the report the ITO did not mention about the existence of any material he had before him or that it was a fit case for issuing notice under Section 148. Therefore, even the report of the ITO did not contain any material or reason that it was a fit case for issuing notice under Section 148. On this vague report, on which no reasonable person instructed in law could have reached the conclusion that it was a fit case for issuance of notice under Section 148, the Commissioner merely wrote 'yes'. Therefore, the question arose whether the Commissioner was 'satisfied' that it was a fit case for issuance of notice under Section 148. The Department produced the report which was the foundation on which the Commissioner was satisfied but it did not contain any material which could bring the case within the purview of Section 148 nor did the ITO set forth any reason for coming to the conclusion that it was a fit case for issuance of notice under Section 148. On this vague report the Commissioner merely wrote three letters, i.e., 'yes'. Could it be a compliance with the provisions of Sections 148 and 151(2) of the Act Did the Commissioner accord permission mechanically Whether the permission accorded by the Commissioner was valid permission Their Lordships held that when the ITO had not even come to 'a prima facie' conclusion that the loan transactions to which he referred were not 'genuine transactions', he had only a vague feeling that they may be bogus, and the conclusion reached did not fulfil the requirements of Section 151(2). He was required to set forth some prima facie grounds for taking action under Section 148 of the Act. His conclusion was that it was a case for reinvestigating about the truth or otherwise of the alleged transactions. It was not his case that 'there were reasons for re-issue of notice'. On such report the Commissioner merely wrote 'yes' and their Lordships held that it was a mechanical exercise of power. In the instant case we have perused the records. We have also perused the note of the Deputy Secretary to the Board who is a responsible officer and this report is full, adequate, sufficient and contains the case of the Department, the contention raised by the petitioners and that the procedural and legal rights were duly safeguarded in the proceedings. On a perusal of this report, which was full, complete and all-comprehensive, the Board was satisfied and accorded approval for transferring the case. However, the matter did not end there. It got an order of transfer drafted which was placed before it and approved by the Board. Therefore, the impugned order of transfer by the Board cannot be said to be 'a mechanical exercise of the power', as held by their Lordship in Sagarmal's case : [1972]83ITR130(MP) . In the result, this contention also fails.

21. Let us now consider the last point urged by the learned counsel for the petitioners. The attack is based on the principles of law laid down in Ajantka Industries v. CBDT : [1976]102ITR281(SC) . Therein, the Supreme Court held that the requirements of Section 127 of the Act are: (1) giving the assessee a reasonable opportunity of being heard, wherever it is possible to do so; (2) the recording of reasons for the order of transfer ; and (3) the communication thereof to the assessee. We have already held that, in the instant case, the Board granted enough opportunity to the petitioners. It was the petitioners who did not avail of the opportunities. We have also held that the order or decision was made or taken by the Board and was duly authenticated by the Under-Secretary of the Board as required under Rule 5 of the Central Board of Direct Taxes (Regulation of Transaction of Business) Rules, 1964. We have held that the grounds set forth in the order of transfer are just and sufficient grounds. The learned counsel for the petitioners relied on Ajantka : [1976]102ITR281(SC) , and claimed that in the instant cases as well, the principles of natural justice were violated. To appreciate the contention let us scan the decision relied by the learned counsel. The Board therein had issued a notice to the appellants under Section 127 of the Act proposing to transfer their cases 'for facility of investigation'. The appellants were asked to submit their objections and they made representation but the Board passed the order of transfer which did not contain any reason at all. At the hearing the counsel for the Revenue argued before the Supreme Court that the order of transfer was no doubt a bald and barren order bereft of any reason but obviously the reason for transfer was as reflected in the show-cause notice, namely, 'facility of investigation, and, it should be read as part of the impugned order although there is no mention of any reason therein as such'. Their Lordships refused to accept the contention and held that the final order of transfer must contain reasons and the said reasoned order must be communicated to the assessee to enable him to approach the High Court under Article 226 of the Constitution or to theSupreme Court under Article 136 of the Constitution to challenge the order, inter alia, either on the ground that it was mala fide or arbitrary or that it was based on irrelevant and extraneous consideration.

22. It will be seen that their Lordships did not hold that the show-cause notice which contained only the expressions 'facility of investigation' as invalid. In the instant cases the parties were furnished with sufficient reasons for transfer and if they were in doubt they could have obtained the same. In our opinion, in the instant cases, sufficient reasons were forthcoming, and the petitioners could obtain further or other materials if they were up and about. Our view, expressed earlier, find indirect support in Ajantha : [1976]102ITR281(SC) . In Ajantha no reason at all was communicated for the transfer and the Revenue relied on the grounds set forth in the show-cause notice. It has been held in Ajantha that Section 127(1) requires recording of reasons and communication thereof to the assessee. In the instant cases, detailed reasons have been communicated to the petitioners. The grounds are recorded in the file and were duly approved by the Board and communicated by the Under-Secretary, who was the competent authority to communicate the order under his signature, vide Rule 5 of 'the Rules'. The respondents have stated that the reasons communicated to the assessees, duly authenticated by the Undersecretary were the grounds for transfer duly approved and sanctioned by the Board. Therefore, we find that in the cases with which we are concerned, the reasons in writing have been communicated to the assessees and they could have challenged the grounds as mala fide or arbitrary or urged that they were based on irrelevant or extraneous considerations. In the instant cases, the reasons contained in the order are full, fair, adequate and are just and appropriate grounds for transfer. As such, the act of communication of the reasons in the order passed under Section 127 was duly and faithfully complied with by the Board. In Ajantha : [1976]102ITR281(SC) , the final order of transfer did not contain any reasons and the appellant was communicated only the fact that the case had been transferred. However, in the instant cases, the final orders contain reasons. The orders of transfer containing the reasons were duly communicated to the petitioners. Therefore, we hold that the infirmities found in Ajantha are conspicuously absent in these cases.

23. In the present cases, the orders passed under Section 127(1) are in writing, they were duly communicated and received by the petitioners. We are fully satisfied that this was the precise order which was rendered and approved by 'the Board'. Therefore, this contention also fails.

24. Non-return of money and jewellery and the difficulties of the petitioners to obtain the documents seized are no grounds, as Section 132 itself guarantees the return of the seized documents or the books of accountwithin a reasonable time. In so far as the money, jewellery, etc., seized, the section states clearly that the ITO has to make a summary enquiry to determine how much of the seized amounts should be retained by him to recover the estimated tax liabilities. The object of enquiry under Section 132(5) is to reduce inconvenience to the assessee as much as possible, so that the remaining assets are returned within a reasonable time. The person from whose custody the documents, etc., are seized is entitled to make copies and take extracts. Therefore, these are also no grounds for holding back the transfer of the cases.

25. For the foregoing reasons, all the contentions fail and the petitions are dismissed. Though the dismissal is technically 'in limine' yet the petitioners were given full and adequate hearing. They were even permitted to file additional affidavits apart from scrutinising the records which were produced by the Revenue.

26. In the result, the petitions are dismissed. There will be no order as to costs. The stay orders passed in these cases stand vacated.


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