KASHIRAM AGARWALA versus UNION OF INDIA AND OTHERS

Citation: [1965] 1 S.C.R. 671 · Decided: 06-10-1964 · Supreme Court of India · Bench: P.B. GAJENDRAGADKAR · Disposal: Dismissed

Judgment (excerpt)

A 
B 
c 
D 
E 
F 
G 
H 
KASHIRAM AGARWALA 
v. 
UNION OF INDIA AND OTHERS 
October 6, 1964 
(P. B. GAJENDRAGADKAR, C.J., K. N. WANCHOO, 
M. HIDAYATULLAH, RAGHUBAR DAYAL 
AND J. R. MUDHOLKAR JJ.) 
Income Tax Act, 1961 (43 of 1961), s. 121(1)-'lncome-tax Proceed-
ings transferred from one Income-tax Officer to another in the same locality 
-Recording of reasons, 
whether mandatory-Proviso to 
s. 
127(1) 
effect of. 
Income-tax proceedings against the appellant before two officers in 
Calcutta were transferred by an. order of the Central Board of Revenue 
under s. 127(1) of the Indian Income-tax Act, 1961 to another Income-
lal< Officer in the same place. The transfer was challenged by the appellant 
in writ proceedings before the Circuit Bench of the Punjab High Court at 
Delhi as being invalid on the ground, that in not recording the reasons for 
the transfer, the order making the transfer did not comply with a manda-
tory provision of s. 127(2). The High Court having !urned down the 
plea, the appellant came to the Supreme Court by special leave. 
It was contended by the appellant that although the proviso to s. 127(1) 
made the giving of a hearing to the assessee unnecessary in cases where 
the transfer was from one officer to another in the same city, place, or 
locality, the provision for recording reasons which was mandatory under 
the main clause of s. 127(1) bad not been similarly dispensed with. There· 
fore even in those cases which were covered by the proviso reasons had 
to be recorded. 
HE.LO : The recording of reasons was a corollary to, and bound up 
with the provision for a hearing. [674 C-D]. 
Where the transfer was from an officer in on.e locality to an officer: in 
another locality it was provided that a hearing should, if possible, be given 
to the assessee. 
Reasons for the transfer had to be recorded to show that 
the objections of the assessee had been taken into account Even when a 
hearing was not actually given on the ground that it was not possible, 
recording of reasons remained desirable for the satisfaction of the assessce. 
[674 E-F]. 
However when the transfer was from one office.r to another in the 
same locality, no question of giving a hearing to the assessee arose as there 
was no .prejudice to him. 
Under s. 124(3) of the Act all the officers in 
the same locality had concurrent jurisdiction. An order of transfer within 
the Jocafity was a purely administrative order, based entirely on the con-
venience of the department. 
On principle in such cas.es neither can notice 
be said to be necessary, nor would it be necessary to record any reasons 
for the transfer. [675 A-DJ. 
The provision for hearing· and for recording of reasons was made in 
s. 127(1) obviously in compliance with the observations of this Court in 
Pannalal Binjraj v. Union of India. 
In that case where the order of 
transfer from one locality to another had been challenged as violative of 
Art. 14, the court while holding that it was unconstitutional, remarked, 
that it was desirable before transferring a case to give the assessee a hearing 
and to record reasons. [676 E-G). 
672 
SUPREME 
COURT 
REPORTS 
(l 965) l S.C.R. 
Considered in this baekground and in the light of the object sought to be 
A 
achieved, the proviso to s. 127(1) only meant that in "ases covered by 
it no opportunity need be given to the asscssee, and the consequential need 
for recording rCasolls waa also unnecessary. The impugned orders there-
fore remained valid. (677 A-CJ. 
Pannalal Blnjraj v. Union of India, [1957] S.C.R. 233, referred to. 
CIVIL APPELLATE JURISDICT!ON : Civil Appeal No. 22 
of 
B 
1964 and Civil Appeal No. 261 of 1964. 
Appeals by special leave from the judgment and order dated 
April 10, 1963 of the Punjab High Court (Circuit Bench) at Delhi 
in Civil Writ Nos. 258-D and 257-D of 1963. 
B. N. Kirpal, S. Murty and K. K. Jain, for the appellant (in 
C 
both the appeals) _ 
S. V. Gupte, Solicitor-General, N. D. Karkhanis and R. N. 
Sachthey, for the respondents (in both the appeals). 
The Judgment of the Court was dcliv•red by 
D 
Gajendragadkar C. J. 
These two appeals arise .out of t\\ • · 
writ petitions filed by the appellant Kashiram Agarwala in the 
Punjab High Court, Circuit Bench, at Delhi challenging the vali-
dity of two orders passed by the Central Board of Revenue (here-
inafter called 'the Board') under s. 127(1) of the Income-Tax Act, 
E 
1961 (No. 43 of 196l)(hereinafter called 'the Act'). These two 
orders have 

Excerpt shown. Read the full judgment & AI analysis in Lexace.