AJANTHA INDUSTRIES AND ORS. vs CENTRAL BOARD OF DIRECT TAXES,NEW DELHI & OTHERS

The Supreme Court held that the non-communication of reasons for transferring a case file under Section 127(1) of the Income Tax Act, 1961, is a serious infirmity rendering the order invalid. The Court emphasized that the requirement to record and communicate reasons is mandatory, allowing the assessee to challenge the order under Article 226 or Article 136 of the Constitution. The judgment overruled Sunanda Rani Jain v. Union of India, [1975] 99 I.T.R. 391, affirming the necessity of adhering to principles of natural justice in administrative actions.