Power to transfer cases.
243(1)
The specified income-tax authority may transfer any case from one or more Assessing Officers subordinate to him (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) subordinate to him.
243(2)
If the Assessing Officer or Assessing Officers, from whom the case is to be transferred and the Assessing Officer or Assessing Officers, to whom the case is to be transferred are not subordinate to the same specified income-tax authority, and the concerned specified income-tax authorities––
- (a) are in agreement, then the specified income-tax authority from whose jurisdiction the case is to be transferred may pass the order;
- (b) are not in agreement, the order transferring the case may be passed by the Board or any such specified income-tax authority as the Board may, by notification, specify.
243(3)
The order of transfer under sub-section (1) or (2) may be passed by the specified income-tax authority after giving the assessee a reasonable opportunity of being heard wherever it is possible to do so and after recording his reasons therefor.
243(4)
Nothing in sub-section (1) or (2) or (3) shall be considered to require any opportunity of being heard to be given, where the transfer is from any Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) and the offices of all such officers are situated in the same city, locality or place.
243(5)
The transfer of a case under sub-section (1) or (2) may be made at any stage of the proceedings, and it shall not be necessary to re-issue any notice already issued by the Assessing Officer or Assessing Officers from whom the case is transferred.
243(6)
For the purposes of section 241 and this section, “case”, in relation to any person whose name is specified in any order or direction issued thereunder, means all proceedings under this Act in respect of any year, which may—
- (a) be pending on the date of that order or direction; or
- (b) have been completed on or before such date; or
- (c) be commenced after the date of such order or direction in respect of any year.
243(7)
For the purposes of sections 241, 242 and this section, “specified income tax authority” means the Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner.
Section Summary:
Section 243 of the Income Tax Act grants the specified income-tax authority the power to transfer cases between Assessing Officers (AOs). This ensures efficient administration of tax cases, especially when reassigning cases can lead to better resource allocation or expertise utilization. The section also outlines the process for transferring cases, including scenarios where AOs are under different authorities and the conditions under which the assessee (taxpayer) must be given a hearing.
Key Changes:
- Clarification of Transfer Process: The section explicitly details the process for transferring cases, including scenarios where AOs are not under the same authority. This was less clearly defined in earlier versions of the law.
- Hearing Requirement: The section introduces a requirement to provide the assessee a reasonable opportunity to be heard before transferring a case, unless the transfer is within the same city, locality, or place.
- Definition of "Case": The section clarifies that a "case" includes all proceedings under the Act, whether pending, completed, or commenced after the transfer order.
Practical Implications:
- For Taxpayers: Taxpayers may experience changes in the handling of their cases if transferred to a different AO. However, they are entitled to a hearing before such a transfer, except in cases where the transfer is within the same city or locality.
- For Assessing Officers: AOs must be prepared to handle cases transferred to them at any stage of proceedings, without needing to re-issue notices already issued by the previous AO.
- For Tax Authorities: The section provides flexibility to reassign cases for better administrative efficiency, but it also imposes procedural requirements, such as recording reasons for transfers and ensuring hearings where applicable.
Critical Concepts:
- Specified Income-Tax Authority: Refers to high-ranking tax officials like Principal Director General, Director General, Principal Chief Commissioner, Chief Commissioner, Principal Commissioner, or Commissioner.
- Concurrent Jurisdiction: Refers to situations where multiple AOs have overlapping authority over a case.
- Reasonable Opportunity of Being Heard: The taxpayer must be informed and allowed to present their views before a transfer, unless the transfer is within the same city or locality.
Compliance Steps:
- For Tax Authorities:
- Record reasons for transferring a case.
- Notify the taxpayer and provide a hearing opportunity, unless the transfer is within the same city or locality.
- Ensure continuity of proceedings by not re-issuing notices already issued by the previous AO.
- For Taxpayers:
- Be aware of the possibility of case transfers and the right to a hearing.
- Monitor communications from the tax department regarding any transfer of their case.
Examples:
- Scenario 1: A taxpayer in Mumbai is under the jurisdiction of AO A. Due to workload redistribution, the case is transferred to AO B, who is also in Mumbai. Since both AOs are in the same city, the taxpayer is not entitled to a hearing.
- Scenario 2: A taxpayer in Delhi is under the jurisdiction of AO X. The case is transferred to AO Y in Chennai. Since the transfer involves different cities, the taxpayer must be given a reasonable opportunity to be heard before the transfer is finalized.
This section ensures that case transfers are handled transparently and efficiently, balancing administrative needs with taxpayer rights.