KARACHI INDUSTRIAL CORPORATION AND 3 OTHERS vs THE COMMISSIONER OF INCOMETAX AND ANOTHER
The petitioners sought leave to appeal against the dismissal of their writ petition by the High Court, which had upheld the transfer of their income-tax assessment case from one Income-tax Officer to another by the Commissioner of Income-tax. The core legal question was whether the Commissioner was required under the principles of natural justice to issue a notice to the assessees before transferring their case under subsection (7-A) of section 5 of the Income-tax Act, when the statute itself prescribed no such notice. The Supreme Court held that the transfer order merely enabled the same officer to continue processing the assessment and resulted in no inherent prejudice to the assessees, thereby not attracting the rule of audi alteram partem. The Supreme Court laid down the principle that an administrative transfer of a tax case to allow ongoing processing by a specific officer does not cause per se prejudice and does not necessitate a prior notice or hearing under principles of natural justice.
- Whether the Commissioner of Income-tax is required to issue a notice to assessees before transferring an assessment case under subsection (7-A) of section 5 of the Income-tax Act?
- Does an administrative order transferring an income-tax case from one officer to another result in per se prejudice to the assessee requiring a prior hearing?
- Section 5(7-A), Income-tax Act
ORDER
1. ' MUHAMMAD )(Aqua Au, J.-The Income-tax Officer, Circle II, Karachi, was processing the return filed by the petitioners for the years 1969-70 and 1970-7 t when he was transferred to Circle "R", Karachi.
2. In order that the same officer may continue to deal with it, the Commissioner of Income-tax acting in pursuance to the powers conferred on him by subsection (7-A) of section 5 of the Income-tax Act transferred the case to the Income-tax Officer, Circle "R". The petitioners felt aggrieved by the order and moved for its quashment in the High Court on the ground that it was without lawful authority.
3. ' The learned Chief Justice who heard the writ petition found no merits in the contention that the order of transfer was without jurisdiction and dismissed the writ petition. The petitioners now seek leave to appeal.
4. ' Mr. Ghulam Hussain Abbasi appearing in support of the petition conceded that the Commissioner of Income-tax had the jurisdiction to transfer the petitioner's assessment case from Income-tax Officer, lInd Circle, to Income-tax Officer, "R" Circle, but maintained that the impugned order o as liable to be set aside as no notice was issued to the assessees before it was made.
5. There is no provision in subsection (7-A) of section 5 of the Income-tax Act for issuance of a notice before a case is transferred from one officer to another by the Central Board of Revenue or the Commissioner of Income-tax, but it was urged that the rule of natural justice required that before an order adverse to a party is passed he shall be heard. There is little force in the contention. The order passed by the Commissioner of Income-tax transferring the case from Income-tax Officer, had Circle to Income-tax Officer, "R" Circle, was merely calculated to enable the same officer to finalise the assessm ent who was already dealing with them. Per se such an order did not result in any prejudice to the assesses.
6. ' We further find that in view of the complaint made by the petitioners that the Income-tax Officer, Circle "R" was biased against them, the Commissioner of Income-tax has given directions that the Inspecting Assistant Income-tax Commissioner shall approve the assessment made by the Income-tax Officer before it is finalized and that if the petitioners have any specific grievance against the Inconel-tax Officer, they should bring it to the notice of the Inspecting Assistant Commissioner of Income-tax.
7. ' In the circumstances we see no reason to interfere with the order passed by the High Court by which the writ petition filed by the petitioners calling in question the order passed by the Income- tax Commissioner was rejected.
8. ' The petition for leave to appeal is dismissed.