Nagendra Rai, J.
1. The petitioner, a political party duly registered with the Election Commission of India, having its head office at Bariatu Road, Ranchi, has filed the present writ application for quashing the order dated December 2, 1996, passed by the Commissioner of Income-tax, Ranchi, in exercise of the power under Section 127(2)(a) of the Income-tax Act, 1961 (hereinafter referred to as 'the Act'), by which he has transferred the case of the petitioner from the Assistant Commissioner of Income-tax, Circle-1, Ranchi, the Assessing Officer, to the Assistant Commissioner of Income-tax, Circle IV, under the Commissioner of Income-tax, Delhi. By the same order the case of four other persons, namely, Suraj Mandal, President, Sibu Soren, Vice-President, Sailendra Mahto, Secretary, and Simon Morandi, a member of the petitioner, have also been transferred, a copy of the said order has been annexed as annexure '7' to the writ application.
2. The petitioner is an assessee under the Act and was being assessed by the Deputy Commissioner of Income-tax, Special Range, Ranchi. The case of the petitioner was transferred to the Assistant Commissioner of Income-tax, Circle-I, Ranchi. Sibu Soren, Suraj Mandal, Sailendra Mahto and Simon Morandi M.P. and Ex. M.P., are alleged to have taken bribes in crores of rupees from a political party for supporting it during the no confidence motion in Parliament. The matter is being investigated by the C.B.I, and huge amounts deposited in the fixed deposit, savings bank account, Kisan Vikas Patra were found either in their names or in the names of their family members. Immovable properties were also found to have been purchased by them in Delhi. The investigation of the case by the C.B.I, is being monitored by the Delhi High Court. All the papers including the papers seized from the office of the petitioner were also taken into possession by the C.B.I., Delhi, in connection with the investigation and charge-sheet has been submitted against them.
3. The aforesaid office bearers and members of the petitioner were examined under Section 131 of the Act and they stated, inter alia, that Rs. 60 lakhs deposited in their names in fixed deposit had come out from party funds. They also stated that they have purchased flats in Delhi from the party funds.
4. The Income-tax Commissioner, Ranchi, taking into consideration the aforesaid fact, issued notice to the petitioner as well as the aforesaid four persons separately under Section 127 of the Act to show cause as to why their cases be not transferred from Ranchi to Delhi. It was mentioned, inter alia, in the notice that enquiries/investigations are being conducted with regard to the sources of income of the office bearers of the petitioner by the Income-tax Department, Ranchi, and the C.B.I., Delhi, the C.B.I, cases are being monitored by the Delhi High Court and all the connected papers collected and information gathered are with the C.B.I., New Delhi. The office bearers of the petitioner have acquired huge movable and immovable properties in Delhi in connection with which they are staying there. As no progress is being made in the cases in Ranchi, it has become necessary on account of administrative convenience and better coordinated investigation for proper assessment to transfer their cases from Ranchi to Delhi.
5. The petitioner filed a show cause and objected to the transfer of the proceeding primarily on the ground that the head office of the petitioner is at Ranchi and the facility of coordinated investigation cannot be a ground for transfer of the case. It was also asserted that the requirement of Section 127 of the Act regarding agreement between the Commissioner of Income-tax, Ranchi, and that of Delhi has not been complied with and the transfer will result in inconvenience and hardship to the petitioner.
6. The respondent-Commissioner, after having considered the show cause of the petitioner and after having heard counsel for the petitioner, passed the impugned order transferring the case along with other cases as stated above on the ground of convenience, effective completion of assessment, launching of prosecution case, collection of revenue, interest of administration of the Act and in public interest.
7. The petitioner has assailed the order on the grounds of non-compliance with the requirement of Section 127 of the Act, unsustainable grounds for transfer, and non-communication of the order.
8. The respondents have filed a counter-affidavit and a supplementary counter-affidavit and have justified the order on the grounds mentioned in the order itself. It has been asserted by them that the transfer has been made after complying with the requirement of Section 127(2)(a) of the Act inasmuch as that there was an agreement between the Commissioner of Ranchi and the Commissioner of Delhi before transfer of the case. It has also been asserted that the Board has also approved the transfer of the cases and the impugned order has been communicated to the petitioner.
9. Learned counsel for the petitioner has assailed the order on the following grounds :
(i) The transfer order has been passed without there being an agreement between the Commissioner of Income-tax, Ranchi, and the Commissioner of Income-tax, Delhi, as such the requirement of Section 127(2)(a) of the Act has not been complied with. Transfer by the Board in exercise of the power under Section 127(2)(b) of the Act is not valid as it can exercise the power only when the provision of Section 127(2)(a) is resorted to and there is disagreement between the concerned Commissioners.
(ii) The ground given for transfer of the case, i.e., co-ordinated investigation, is not a sufficient or relevant ground to transfer the case under Section 127 of the Act.
(iii) The impugned order has not been communicated to the petitioner, as such it cannot be given effect to.
(iv) The passing of a combined order with regard to the petitioner and four others is not permissible under Section 127 of the Act.
10. Counsel appearing for the respondents combated all the submissions and submitted that the transfer has been made from Ranchi to Delhi after an agreement between the concerned Commissioners. Apart from this, the Board has also agreed to the proposal of transfer, as such the requirement of Section 127(2) of the Act has been fully complied with. It was also submitted that the transfer has been made in public interest and on the ground of convenience, effective completion of assessment, launching of prosecution cases, collection of revenue, etc., and not only on the ground of co-ordinated investigation, as such the grounds are valid and relevant grounds for transfer. It was also alternatively submitted that the transfer for co-ordinated investigation of the case is a relevant ground for transfer. The order has been communicated to the petitioner. It was also submitted that the combined order can be passed under Section 127(2)(a) when the cases of the persons are same and similar and the petitioner has not been prejudiced due to the passing of a combined order.
11. Section 5(7A) of the Indian Income-tax Act, 1922, contains a provision for transfer. It authorised the Commissioner of Income-tax to transfer the case from one Income-tax Officer to another subordinate to him and the Central Board of Revenue was authorised to transfer any case from one Income-tax Officer to another. There was no provision under the said Act to provide an opportunity of hearing to the affected party. The said provision was considered by the Supreme Court in the case of Pannalal Binjraj v. Union of India : [1957]31ITR565(SC) and the apex court held that the principles of natural justice have to be followed while passing an order. The affected person has to be given an opportunity of hearing and the reason should be given in the order. The apex court observed at page 589 as follows :
' We may, however, before we leave this topic observe that it would be prudent if the principles of natural justice are followed, where circumstances permit, before any order of transfer under Section 5(7A) of the Act is made by the Commissioner of Income-tax or the Central Board of Revenue, as the case may be, and notice is given to the party affected and he is afforded a reasonable opportunity of representing his views on the question and the reasons of the order are reduced however briefly to writing. It is significant that when any question arises under Section 64 as to the place of assessment and is determined by the Commissioner or Commissioners or by the Central Board of Revenue, as the case may be, the assessee is given an opportunity under Section 64(3) of representing his views before any such question is determined. If an opportunity is given to the assessee in such case, it is all the more surprising to find that, when an order of transfer under Section 5(7A) is made transferring the case of the assessee from one Income-tax Officer to another irrespective of the area or locality where he resides or carries on business, he should not be given such an opportunity. There is no presumption against the bona fides or the honesty of an assessee and normally the income-tax authorities would not be justified in refusing to an assessee a reasonable opportunity of representing his views when any order to the prejudice of the normal procedure laid down in Section 64(1) and (2) of the Act is sought to be made against him, be it a transfer from one Income-tax Officer to another within the State or from an Income-tax Officer within the State to an Income-tax Officer without it, except of course where the very object of the transfer would be frustrated if notice was given to the party affected. If the reasons for making the order are reduced however briefly to writing it will also help the assessee in appreciating the circumstances which make it necessary or desirable for the Commissioner of Income-tax or the Central Board of Revenue, as the case may be, to transfer his case under Section 5(7A) of the Act and it will also help the court in determining the bona fides of the order as passed if and when the same is challenged in court as mala fide or discriminatory. It is to be hoped that the income-tax authorities will observe the above procedure wherever feasible.'
12. The corresponding section under the Income-tax Act, 1961, is Section 127. Under this section, the Legislature has introduced the concept of natural justice and the requirement of recording reasons for making an order of transfer. This section was amended from time to time and was substituted by the Direct Tax Laws (Amendment) Act, 1987, with effect from April 1, 1988. The provision prior to substitution was considered by the Supreme Court in the case of Ajantha Industries v. CBDT : [1976]102ITR281(SC) and the apex court held that recording of reasons and communication of the reasons to the assessee is a mandatory requirement. The reason for recording the reasons in the order and making them available to the assessee is to afford him an opportunity to approach the High Court in its writ jurisdiction under Article 226 of the Constitution and the Supreme Court under Article 136 of the Constitution, in an appropriate case for challenging such order, inter alia, either on the ground that it is mala fide or arbitrary or it is based on irrelevant or extraneous considerations.
13. Section 127 after substitution also requires an opportunity of hearing and recording of reasons for transfer of a case. Section 127(2) contains provision for transfer of a case from the jurisdiction of one Commissioner to other Commissioner. Sub-section (2)(a) of Section 127 provides that there should be an agreement between the concerned Commissioners for the transfer of the case. Thus, it is clear that for a transfer of a case from jurisdiction of one Commissioner to other, the requirement is that there should be an agreement between the two Commissioners. The assertion of the petitioner is that the transfer has been made without there being any agreement between the two Commissioners. The respondents have asserted that there was an agreement and have also filed a document which has been annexed as annexure 'H' to the supplementary counter affidavit. The said document is dated November 27, 1996, written by the Asst. Director of Income-tax (Investigation) Tech. IV, New Delhi, to the Commissioner of Income-tax (Central)-I, 5th floor, Mayur Bhavan, New Delhi. The relevant portion of the letter is as follows :
'It has been decided that the cases of the Jharkhand Mukti Morcha Party and its 4 MPs, namely, Shri Suraj Mandal, Shri Shibu Soren, Shri Simon Morandi and Shri Shailendra Mahto, will be centralised under your charge after being transferred from the charge of the CIT, Ranchi. Your concurrence for centralisation has also been obtained, and you were kind enough to inentify the Asst. CIT, Central Circle-4, under the Addl. CIT, Range-I, as the Assessing Officer with whom these cases will be centralised.'
14. Thus, from the aforesaid letter it appears that there was an agreement between the Commissioners of Ranchi and Delhi where the case of the petitioner is to be transferred. As such the submission advanced on behalf of the petitioner of non-compliance of provision of Section 127(2)(a) of the Act is devoid of any substance. This apart, it appears that by way of abundant precaution the Board has also approved the proposal for centralisation of the case of the petitioner and its office bearers to the Assessing Officer at Delhi. The same is evident from annexure-G to the supplementary counter affidavit which is a letter dated November 23, 1996, issued under the signature of the Income-tax Officer, Hqrs. (Admn.) for the Commissioner of Income-tax, Ranchi, to the Director General of Income-tax Inv. (North), New Delhi. Thus, even if it is accepted for the sake of argument that there is no agreement between the two Commissioners, the order of the Board approving the proposal of transfer is a complete answer to the submission advanced on behalf of the petitioner.
15. In support of his submission that a co-ordinated investigation cannot be a ground for transfer under Section 127 of the Act, counsel for the petitioner relied upon the following cases :
Shivajirao Angre v. CIT : [1986]158ITR162(MP) .
V.K. Steel Industries Pvt. Ltd. v. Asst CIT : [1991]187ITR403(AP) .
Y. Moideen Kunhi and Co. v. ITO : [1993]204ITR29(KAR) .
S.A. Ahluwalia v. State of Nagaland .
Shri Anil Mittal v. Chief CIT .
16. Learned counsel for the respondents, on the other hand, relied upon the following decisions in support of his submission :
Sameer Leasing Co. Ltd. v. Chairman, CBDT : [1990]185ITR129(Delhi) ,
Bhatia Minerals v. CIT : [1993]200ITR591(All) .
17. Section 127 does not contain the grounds on which a case is to be transferred. It has been left to the discretion of the authority which has to be exercised by it in public interest. It is neither possible nor desirable to enumerate the grounds which can be said to be valid grounds for transfer under Section 127 of the Act. It depends upon the facts of each case. However, the paramount consideration for transfer should be the public interest and the power is to be guided and controlled to serve the purpose of the Act. The power is not to be exercised on arbitrary or flimsy grounds nor the same should be exercised for extraneous or irrelevant considerations. If the transfer is being made for the purpose of co-ordinated investigation for the purpose of assessment and collection of tax in a more convenient or efficient way, then it will be a good ground for transfer.
18. The case of V.K. Steel Industries Pvt. Ltd. : [1991]187ITR403(AP) , is not an authority for the proposition as canvassed by counsel for the petitioner. From the facts of the aforesaid case, it appears that the order of transfer was interfered with by the Andhra Pradesh High Court on the ground that the reason for transfer was not communicated to the assessee. Similarly, in the case of Anil Mittal , no reason was assigned in the order of transfer. In the case of S.A. Ahluwalia , the order of transfer was interfered with on the ground that no case was pending against the assessee on the date of the order of transfer and the order of transfer was passed by an authority which was not competent to pass the order. In the case of Shivajirao Angre : [1986]158ITR162(MP) , it appears that a notice was issued to the assessee proposing to transfer the case for the purpose of detailed and co-ordinated investigation. A Division Bench of the Madhya Pradesh High Court, relying upon its earlier Division Bench judgment in Sagarmal Spinning and Weaving Mills Ltd. v. CBDT : [1972]83ITR130(MP) , held that facility of investigation would not be a sufficient reason for transfer of a case and the mention of that reason in the show-cause notice proposing to transfer the case would not be compliance with the requirements of Section 127 and accordingly quashed the order of transfer. In the case of Y. Moideen Kunhi : [1993]204ITR29(KAR) , the cases of 20 assessees were transferred from Mangalore to Bangalore. The ground for transfer as mentioned in the show-cause notice proposing to transfer was to facilitate proper investigation. Dealing with the said matter, the learned single judge of the Karnataka High Court, relying upon the judgment of the Madhya Pradesh High Court as mentioned above as well as on the judgments of the Andhra Pradesh High Court in V.K. Steel Industries Pvt. Ltd. v. Asst CIT : [1991]187ITR403(AP) and Vijayasanthi Investments Pvt. Ltd. v. Chief CIT : [1991]187ITR405(AP) , held that the 'ground to facilitate co-ordinated investigation is not a sufficient ground for transfer under Section 127 of the Act.' The two cases relied upon by the petitioner support the submission advanced on behalf of the petitioner that co-ordinated investigation cannot be a ground to transfer under Section 127 of the Act.
19. In the case of Sameer Leasing Co. Ltd. : [1990]185ITR129(Delhi) , a Division Bench of the Delhi High Court held that properly co-ordinated investigation is a good ground for transfer of a case. In the case of Bhatia Minerals : [1993]200ITR591(All) , a Division Bench of the Allahabad High Court held that a proper co-ordinated investigation is a good ground for transfer. It was held as follows at page 593 :
'We are not inclined to interfere with the impugned order of transfer. As held by this court in Peacock Chemicals (P.) Ltd. v. CIT : [1990]182ITR98(All) , proper and co-ordinated investigation is a good ground for transfer under Section 127. Since the Bhatia family has several businesses in various names and statuses, it is only proper that there should be coordination in investigation in the affairs of the groups which may have a bearing on the income tax proceedings. The word 'co-ordinate' indicates that there is a need for inter-linking various aspects of a group for proper income-tax assessment. Hence, this expression is not vague. In fact, in the income-tax cases of connected business groups or families, it is often convenient to centralise their cases because often these have a bearing on one another. There is, therefore, nothing unreasonable in the impugned order.'
20. Apart from the Delhi and Allahabad High Courts, the Gauhati High Court in the case of Assam Surgical Co. v. CBDT , the Rajasthan High Court in the case of Shri Rishikul Vidyapeeth v. Union of India and the Calcutta High Court in the case of Dwarka Prosad Agarwalla v. Director of Inspection : [1982]137ITR456(Cal) have held that facility of investigation or co-ordinated investigation is a substantial ground for transfer from one officer to another officer.
21. As noticed above the very object of transfer is to achieve the object of the Act. If co-ordinated investigation is necessary for the purpose of proper assessment, prevention of evasion of tax, collection of tax and other relevant matters, then the proper and co-ordinated investigation is a good ground for transfer of the case. It cannot be laid down as a proposition of law that the said ground cannot be a valid ground for transfer. In a given case the same may not be a good ground for transfer, on being noticed that the co-ordinated investigation in no way will help to achieve the object of the Act. No doubt, transfer of a case from the place where the assessee has its place of residence or business to another place causes inconvenience but if it is necessary in the public interest then the transfer on the ground of proper and co-ordinated investigation cannot be held to be impermissible in law. I find myself in disagreement with the view that co-ordinated or centralised investigation will not be a ground of transfer under Section 127 of the Act. I am in agreement with the view taken by the different High Courts as mentioned above holding that proper and co-ordinated investigation would be a relevant ground to exercise the power under Section 127 of the Act.
22. Coming to the facts of this case, it is clear that in this case transfer has not been made only on the ground of co-ordinated investigation but, on the other hand, the show-cause notice proposing to transfer as well as the order shows that the transfer has been made in public interest and to facilitate the assessment proceeding, launching of prosecution, collection of revenue and to achieve the object of the Act. It will be apt to quote the ground given by the authority while transferring the case :
'In this case all the original and relevant documents are in the custody of the CBI at New Delhi. Even those documents collected by the Income-tax Department at Ranchi have been requisitioned and obtained by the CBI. Documents like books of account and donation coupons which have an important bearing on the case are in the possession of the CBI. Most of the immovable assets and huge bank deposits and also investments in KVP are in Delhi. Further, sources of money deposited in the bank by the four MPs have also originated at Delhi. The warrant of search under Section 132(1) in respect of deposits in the bank have been executed in Delhi. The CBI has also filed charge-sheet against the four MPs of Jharkhand Mukti Morcha in Delhi. Thus in view of the above reasons and for more convenient and efficient completion of assessment, launching of prosecution cases, collection of revenue, public interest and in the interest of administration of the Act, I, Commissioner of Income-tax, Ranchi, in exercise of the powers conferred by Sub-section (2) of Section 127 of the Income-tax Act 1961, and all other powers enabling me in this behalf hereby transfer the case particulars of which are mentioned in columns (2), (3) and (4) of the following schedule from the Assessing Officer mentioned in column (5) to the Assessing Officer mentioned in column (6) thereof.'
23. The aforesaid grounds in my view, in the facts of this case, are good grounds for transfer of the case and the order cannot be held to be invalid as canvassed on behalf of the petitioner.
24. The petitioner has stated in paragraph 23 of the writ application that the respondent-Commissioner, Ranchi, has failed to communicate the impugned order to the petitioner. The said statement is not supported by an affidavit and it is only a submission. It has been stated in clear terms in the counter-affidavit that the order has been communicated to the petitioner and the impugned order contained in annexure-7 also shows that it has been sent to the concerned persons including the petitioner. In view of the aforesaid stand taken by the respondents, I am of the view that the order has been communicated to the petitioner.
25. The last ground urged on behalf of the petitioner that the passing of a combined order in the case of the petitioner as well as the other four assessees has vitiated the order is devoid of any substance. When the ground for transfer is the same or similar then there is no legal bar in passing a joint/combined order in all the cases. This apart, the petitioner has not shown any prejudice having been caused to it on account of the passing of a combined/common order in the case of the petitioner and its office bearers and members.
26. It is to be mentioned here that the same order was challenged in C. W. J. C. Nos. 4141 of 1996(R) by Sri Siboo Soren, in 4142 of 1996(R) by Simon Marandi and in 4143 of 1996(R) by Suraj Mandal in this court and the same has been dismissed on December 20, 1996 (See Shibu Soren v. CIT : [1997]225ITR298(Patna) ).
27. Thus, in my view, none of the submissions advanced on behalf of the petitioner has any substance and the order of transfer fulfils all the requirements of Section 127 of the Act, namely, giving opportunity of hearing to the petitioner, recording of relevant and valid reasons for transfer. The order has also been communicated to the petitioner.
28. In the result, there is no merit in this application and the same is dismissed.
S.K. Chattopadhyaya, J.
29. I agree.