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Challenge to rejection of application for condonation of delay in claiming income tax refund under section 119(2)(b) of the Income-tax Act, 1961 based on lack of reasons provided in the impugned order. Analysis: The petitioner, a contractor, sought refund of income tax amounts for the years 1991-92, 1992-93, and 1993-94. The application for condonation of delay in claiming the refund was rejected by the Chief Commissioner of Income-tax without providing reasons, leading to the challenge under article 226 of the Constitution of India. The petitioner contended that the lack of reasons in the impugned order deprived them of the opportunity to challenge it effectively and engage in judicial review, thus violating the principles of natural justice. The High Court emphasized the importance of providing reasons in quasi-judicial decisions, citing various legal precedents. It was highlighted that the requirement to record reasons serves as a safeguard against arbitrariness, ensures clarity, and facilitates effective judicial review. The court referred to cases such as Maneka Gandhi v. Union of India and Siemens Engineering and Manufacturing Company of India Ltd. v. Union of India to underscore the significance of articulating reasons in decisions affecting individuals' rights, whether quasi-judicial or administrative. In the absence of reasons for rejecting the petitioner's application, the High Court held that the impugned orders lacked the necessary justification and clarity. The court quashed the orders and directed the respondents to reconsider the petitioner's application on its merits, emphasizing the need for a speaking order that articulates the rationale behind the decision. The judgment emphasized that providing reasons is essential not only for rejecting applications but also for granting relief where justified, in line with the criteria established by the Department. In conclusion, the High Court's judgment underscored the fundamental principle of natural justice requiring quasi-judicial authorities to provide reasons for their decisions. By setting aside the impugned orders and mandating a fresh consideration with a speaking order, the court sought to uphold the petitioner's right to a fair and transparent review process, ensuring that decisions impacting individuals' rights are made with clarity, justification, and adherence to established criteria.
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