Sec. 5(7A) is ultra vires Art.14 of Consti. & so is Sec. 64(5)(b) held SC.

1.  The petitioner-firm was carrying on business as manufacturer and seller of bidi. 

2.  The firm was assessed to income-tax in Calcutta due to reason of head office being. 

3.  The petitioner was informed by the ITO, that in pursuance of an order under section 5(7A) of the 1922 Act, his assessment records were transferred from Calcutta Office to Ranchi. 

4.  Thereafter, the ITO, Ranchi, called upon the petitioner to submit his return for the relevant assessment year.

 On writ HC held as under: 

5.  Under section 64(3) of the 1922 Act, if any question arises as to the place of assessment such question shall be decided, after giving the assessee an opportunity to represent his views by the Commissioner or Commissioners concerned or in case of disagreement between them by the Board of Revenue.

6.  It was quite clear from the aforesaid provisions of section 64 that the Legislature considered the question of the place of assessment to be of some importance to the assessee.

7.  The power of transfer can only be conferred if it is hedged round with reasonable restrictions, the absence or existence of which can in the last instance be determined by the Courts; and the exercise of the power must be in conformity with the rules of natural justice, that is to say, the parties affected must be heard when that is reasonably possible, and the reasons for the order must be reduced, however briefly, to writing so that men may know that the powers conferred on these quasi judicial bodies are being justly and properly exercised.

8.  In a democracy functioning under the rule of law it is not enough to do justice or to do the right thing; justice must be seen to be done and a satisfaction and sense of security engendered in the minds of the people at large in place of a vague uneasiness that Star Chambers are arising in this land.

9.  For these reasons, it was held that section 5(7A) of the 1922 Act is ultra vires article 14 of the Constitution and so is section 64(5)(b ) of the 1922 Act in so far as it makes an order under section 5(7A) of the 1922 Act inviolate.