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Issues involved: Whether the Income-tax Appellate Tribunal was required to record reasons while admitting additional grounds of appeal.
Summary: The High Court of Delhi addressed the issue of whether the Income-tax Appellate Tribunal (Tribunal) was obligated to provide reasons for admitting additional grounds of appeal in a writ petition. The Tribunal had allowed the Revenue to admit additional grounds in appeals related to assessment years 1991-92 to 1995-96 under section 143(3) of the Income-tax Act, 1961. The petitioner contended that the Tribunal's approach lacked legal sanction as it did not record reasons for admitting the additional grounds. The Tribunal's decision was challenged based on Rule 11 of the Income-tax (Appellate Tribunal) Rules, 1963, which governs the Tribunal's power to permit additional grounds to be raised. The Court emphasized the importance of recording reasons, stating that it is inherent in the provision itself due to the proviso that the Tribunal shall not base its decision on any other ground without giving the affected party a sufficient opportunity to be heard. The Court highlighted that the Tribunal's discretion to allow new grounds must be exercised judiciously and not arbitrarily, with reasons being a fundamental aspect of judicial review. The Court stressed that reasons are essential for transparency, preventing arbitrariness, and ensuring justice. The Court noted that the Tribunal acknowledged the need to provide reasons for admitting additional grounds but failed to do so in the correct order. The Court clarified that reasons should have been indicated before final disposal of the appeal. Referring to a decision by the apex court, the Court affirmed that while additional grounds can be raised, the methodology for granting permission must be followed diligently. The Court directed the Tribunal to record reasons and allowed parties to present further material on the matter. In conclusion, the writ petition was disposed of with the Court underscoring the necessity of providing reasons in quasi-judicial processes and ensuring compliance with the principles of natural justice.
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