Income Tax | Rajasthan High Court Quashes Repeated Orders To Transfer Case, Calls Revenue's Approach 'Rigid' & 'Adamant'

The Rajasthan High Court has come down heavily on the Revenue Department for being “rigid and adamant” to transfer the case of the petitioner from Udaipur to Delhi under Section 127 of the Income Tax Act, 1961, despite the coordinate bench's earlier decision that quashed the same order.

Section 127 of the Act empowers the income tax authorities to transfer a case from one Assessing officer to another to ensure better coordination, effective investigation or administrative convenience.

The division bench of Justice K.R. Shriram and Justice Ravi Chirania stated that when the proceedings initiated against the petitioner were pending for more than 6 years, the department must be more concerned with examining and deciding the issue as per law, instead of making the assessee a “shuttlecock”.

“When the faceless system has been put in place by the Revenue itself which has provided more transparency in the taxation matters then act of Revenue of transferring the case by impugned order dated 19.10.2022 is neither reasonable nor justifiable but rather arbitrary.”

The petitioner had approached the Court earlier too, challenging a notice under Section 127 issued by the respondent. In an earlier decision, the coordinate bench of the Court had quashed the order of transfer, treating it as invalid. This order was not challenged by the respondent.

However, again the same order was passed by the department, without any change in circumstances. Hence, the petition was filed before the Court.

After perusing the records and highlighting that the factual position had not changed since last time, the Court expressed its disapproval towards the rigid and adamant conduct of the Revenue Department despite the previous order of the Court.

While making the above-mentioned observations, it opined that, “The proceedings initiated by respondent against petitioner are pending for more than 6 years because of respondent's unreasonable and unjustified act of ordering transfer the case of the petitioner from Udaipur to Delhi”.

Further it was highlighted that it appeared that the order of transfer was made for uniformity of assessment of persons involved following the search that department had undertaken on the Brindavan Group. However, it was stated that the assessment of the Brindavan Group got completed in December 2019 itself.

Hence, the Court held that there was no reason for transferring the case of the petitioner to Delhi.

Accordingly, the petition was allowed, and the transfer order was quashed.

Title: Murliwala Agrotech Pvt. Ltd. v Union of India & Ors.

Citation: 2025 LiveLaw (Raj) 337

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