Facts of the Case

The petitioner, Samson Healthcare Pvt. Ltd., filed a writ petition challenging an order dated 25.07.2023 passed under Section 127 of the Income Tax Act, 1961.

By the impugned order, the petitioner’s case was transferred from the Deputy Commissioner of Income Tax, Central Circle-22(2), to the Deputy Commissioner of Income Tax, Central Circle-2, Faridabad.

Prior to the passing of the transfer order, a notice dated 18.01.2023 was issued to the petitioner. The petitioner submitted its objections/reply on 23.01.2023.

However, it appeared from the record that while passing the impugned order, the objections filed by the petitioner were not taken into consideration.

Issues Involved

  1. Whether an order passed under Section 127 of the Income Tax Act is valid if the objections submitted by the assessee are not considered.
  2. Whether failure to consider the reply of the assessee violates principles of natural justice 

Petitioner’s Arguments

  • The petitioner contended that the impugned transfer order was legally unsustainable.
  • It was argued that although objections were duly filed in response to the notice, the same were not considered before passing the order.
  • Such non-consideration amounts to violation of principles of natural justice and renders the order arbitrary. 

Respondent’s Arguments

  • The respondents/revenue accepted notice and chose not to file a counter-affidavit.
  • The matter was argued based on the existing record.

Court’s Findings / Order

  • The Court observed that the record clearly indicated that objections were filed by the petitioner.
  • However, these objections were not taken into account while passing the impugned order.
  • The Court held that the appropriate course of action would be to set aside the impugned order.

Final Directions:

  • The order dated 25.07.2023 passed under Section 127 was set aside.
  • Liberty was granted to the Assessing Officer to pass a fresh order in accordance with law.
  • The Assessing Officer was directed to:
    • Provide a personal hearing to the petitioner’s authorized representative
    • Issue proper notice specifying date and time of hearing

Important Clarification by the Court

  • The Court emphasized the necessity of considering objections submitted by the assessee before passing any order under Section 127.
  • It reaffirmed that principles of natural justice must be adhered to, especially when administrative orders affect rights of parties.

Link to download the order -https://delhihighcourt.nic.in/app/showFileJudgment/RAS31082023CW115152023_215445.pdf

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