P. Venkatarama Reddi, J.:— Questioning the order passed by the Commissioner of Income-tax, Guntur, under section 127(2) of the Income-tax Act, 1961, the present writ petition has been filed.

2. The petitioner-firm is an assessee within the jurisdiction of the Income-tax Officer, Ward-I, Chittoor. By the impugned order dated October 5, 1990, the Commissioner of Income-tax, Guntur, transferred the case of the petitioner to the Assistant Commissioner of Income-tax, Central Circle-11(8), Madras. It is stated in the order that “this transfer is effected to facilitate detailed and co-ordinated investigation.” The order was preceded by the issuance of a show-cause notice on September 4, 1990. In the notice, it is indicated that “the transfer of the case is to facilitate co-ordinated investigation and enquire/restore the case to territorial ITO/A.C”. Obviously, the inapplicable portion— “restore the case to territorial ITO/A.C”has not been deleted. It is not the case of the Department either in the counter or otherwise that any question of restoration of the case to the territorial ITO/A.C arises. The petitioner sent a reply dated September 10, 1990. The petitioner contended that it will be convenient if the file is retained at Chittoor where the firm is having its establishment. It was also stated that the petitioner was prepared to answer any question or furnish any information which the Assistant Commissioner (Income-tax), Madras, may require at any time. After considering this reply, the impugned order came to be passed on October 5, 1990.

3. Learned counsel for the petitioner has urged before us that the petitioner does not have any business or establishment at Madras, that except using a stock phraseology, no specific reason has been mentioned in the show-cause notice or in the final order. Counsel argues that this amounts to denial of reasonable opportunity to the petitioner. Learned counsel relies upon the decision of this court in Vijayasanthi Investments (P.) Ltd. v. Chief CIT [1991] 187 ITR 405 to which one of us (P. Venkatarama Reddi J.) was a party.

4. In the counter-affidavit filed by the Commissioner of Income-tax, it is stated that the writ petitioner is closely connected with the Odayar Group whose assessments are being dealt with by the Assistant Commissioner of income-tax, Central Circle-II(8), Madras, and that there are certain transactions of the petitioner linked with the said group of assessees. Inasmuch as the Odayar Group of cases are being handled at Madras, it is essential to transfer the petitioner's file also to the concerned circle at Madras for the purpose of facilitating detailed and co-ordinated investigation. It is submitted that the notice and order of transfer cannot be said to be vitiated merely because “they do not disclose all the reasons that weighed with the first respondent in effecting the transfer”. It is also contended that disclosure of the relevant reasons in the order of transfer would militate against the interests of the Revenue as there is every possibility of such a course stifling the enquiry that has to be made.

5. It is agreed by both counsel that the judgment of this court in Vijayasanthi Investments P. Ltd. v. Chief CIT [1991] 187 ITR 405 squarely applies to the case on hand. After referring to the decided cases on the subject, it was observed therein at page 411:

“From the aforesaid decisions, it is clear that, in the matter of the transfer of a case under section 127 of the Act, it is necessary that the authority which proposes to transfer the case must, wherever it is possible to do so, give the assessee a reasonable opportunity of being heard with a view to enable him to effectively show cause against the proposed transfer. The notice must also propose to give a personal hearing. It is also necessary to mention in the notice the reasons for the proposed transfer so that the assessee could make an effective representation with reference to the reasons set out. It is not sufficient merely to say in the notice that the transfer is proposed ‘to facilitate detailed and co-ordinated investigation’. The reasons cannot be vague and too general in nature but must be specific and based on material facts. It is again not merely sufficient to record the reasons in the file but it is also necessary to communicate the same to the affected party.”

6. In the present case also, the very same reason—bald and vague in its tenor —has been spelt out in the show-cause notice and the final order of transfer. On the principle laid down in the above decision, without any further discussion, we would have disposed of the writ petition quashing the impugned order. However, learned standing counsel for the Income-tax Department has tried to make out a case for reconsideration of the decision while reiterating the stand taken in the counter. As already noticed, the stand taken in the counter is that the reasons that weighed with the Commissioner for effecting the transfer need not be disclosed in the show-cause notice and the final order and in case such reasons are disclosed, there is every possibility of interfering with the enquiry that has to be taken up after transfer. We are not inclined to agree with the submission of learned standing counsel.

7. Realising the fact that the order of transfer of an assessee's case from one place to another would entail certain amount of prejudice to the assessee, the Legislature has advisedly made a provision for giving to the assessee a reasonable opportunity of being heard in the matter. It is also enjoined that the reasons for the transfer shall be recorded by the concerned authority. These are the procedural safeguards that are provided to the assessee. The Supreme Court in Ajantha Industries v. Central Board of Direct Taxes [1976] 102 ITR 281 held that, apart from giving a reasonable opportunity of being heard whenever it is possible to do so, recording of reasons for transfer and communication of the reasons is necessary for supporting an order of transfer. The Supreme Court observed: “recording of reasons and disclosure thereof are not mere idle formality”. The Supreme Court further observed (headnote): “When law requires reasons to be recorded in a particular order affecting prejudicially the interests of any person, who can challenge the order in court, it ceases to be a mere administrative order and the vice of violation of the principles of natural justice on account of omission to communicate the reasons is not expiated.” What the Division Bench has stated in Vijayasanthi Investments' case [1991] 187 ITR 405 (AP) is only an elucidation of the principles enunciated by the Supreme Court while interpreting section 127(2). Furnishing specific and intelligible reasons for the proposed transfer of the case is only a concomitant of the concept of reasonable opportunity enshrined in section 127(1) and (2). Unless the assessee knows the precise reasons for the transfer, he would be handicapped in putting forth his objections effectively. If a vague and omnibus ground such as the one mentioned in the show-cause notice and repeated in the final order is given, the assessee cannot be reasonably expected to project his view-point. The requirement of a reasonable opportunity will then be reduced to an idle formality. It is, therefore, incumbent upon the authorities to spell out the basic reason for transfer, at least briefly and broadly, so that the assessee may have the opportunity of making an effective representation and an opportunity to question the final order in writ proceedings or otherwise. The phraseology “co-ordinated investigation”, without anything more, does not convey any intelligible reason from the assessee's point of view.

8. Learned standing counsel contends that the disclosure of reasons may at times defeat the very purpose of the transfer and may come in the way of proper and effective enquiry in a case relating to the assessee or some other case connected with the assessee. It is not possible to predicate that, in each and every case where transfer is contemplated, the recording of reasons will thwart or defeat the purpose of transfer. There may be certain exceptional cases where affording reasonable opportunity to the assessee including the disclosure of specific reasons might come in the way of effective exercise of the statutory functions by the concerned income-tax authorities. The likely damage that may be caused to the interests of the Revenue might be irretrievable. In order to provide for such a contingency, an exception is carved out by using the words “wherever it is possible to do so”. If it is not possible to afford a reasonable opportunity to the assessee having regard to relevant factors bearing a nexus with the object sought to be achieved, the recording of reasons or for that matter the requirement of hearing can be dispensed with. The expression “wherever it is possible to do so” need not be confined to cases of physical impossibility of contacting the assessee. Of course, that should be an exception but not a rule and it should not be resorted to in each and every case in a mechanical manner. In the instant case, a perusal of the file does not indicate that the non-communication of the specific reasons was by reason of any satisfaction having been reached by the Commissioner that it was not possible to communicate the specific reasons. We need not, therefore, dilate on this aspect any further.

9. In the light of the above discussion, we affirm the principle laid down in Vijayasanthi Investments' case [1991] 187 ITR 405 (AP) subject to the clarification given above. We, therefore, quash the impugned order of the first respondent dated October 5, 1990, with liberty to proceed with the transfer of the petitioner's case afresh according to law keeping in view the legal position declared by us.

10. Before parting with the case, we have to advert to one more contention of learned standing counsel, viz., that this is not a case where any prejudice could be said to have been caused to the petitioner by reason of noncommunication of the reasons for transfer and the petitioner has not pointed out any ground worth mentioning against the transfer and we need not, therefore, interfere under article 226 of the Constitution. We are unable to agree with learned standing counsel. It is not for us to assume at this stage whether there will be prejudice to the assessee nor can we say anything about the factual existence of the material justifying the transfer. In the absence of communication of special reasons for transfer, the prejudice to the assessee must be deemed to be inherent and it is not possible for us to visualise what objection the petitioner could have put forward if he had been apprised of the reasons which are now set out in the counter.

11. For the reasons aforesaid, the writ petition is allowed and the order of the Commissioner of Income-tax, Guntur, dated October 5, 1990, passed in S. & P.P.C.R No. 2 of 1990-91 is quashed. We make it clear that nothing in this judgment would preclude the Commissioner from proceeding further under section 127(2) of the Income-tax Act in accordance with law.