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TMI Blog2005 (1) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... itizen, there would be insidious encouragement to arbitrariness and caprice. If this requirement is insisted upon, then, they will be subject to judicial scrutiny and correction - we hold that the orders passed by the Commissioner of Income-tax (Appeals) and the Tribunal are legally unsustainable and are liable to be set aside because the same do not satisfy the requirement of a speaking order - - - - - Dated:- 13-1-2005 - Judge(s) : G. S. SINGHVI., JASBIR SINGH. JUDGMENT The judgment of the court was delivered by: G.S. Singhvi J.-In this appeal, the appellant has prayed for determination of the following questions of law: "1. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal filed by the appellant was dismissed by the Income-tax Appellate Tribunal, Delhi Bench, New Delhi (for short, "the Tribunal"). We have heard Shri D.S. Patwalia, counsel for the appellant and Shri Ramesh Chahal, counsel for the respondent and perused the record. In our opinion, in addition to the two questions framed at the time of admission of the appeal, the following substantial question of law would require consideration by this court: "Whether the orders passed by the Commissioner of Income-tax (Appeals) and the Tribunal fulfil the requirement of a speaking order?" A perusal of the order dated July 29, 1994, shows that after making a cursory reference to the order passed by the Assessing Officer on the issue of the appellant' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt of the concept of fair procedure. The necessity of giving reasons flows from the concept of rule of law which constitutes one of the cornerstones of our constitutional set up. The administrative authorities chartered with the duty to act judicially cannot decide matters on considerations of policy or expediency. The requirement of recording of reasons by such authorities is an important safeguard to ensure observance of the rule of law. It introduces clarity, checks the introduction of extraneous or irrelevant considerations and minimizes arbitrariness in the decision making process. Another reason which makes it imperative for the quasi-judicial authorities to give reasons is that their orders are not only subject to the right of the ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f India, AIR 1971 SC 862; (4) Mahabir Prasad Santosh Kumar v. State of U.P., AIR 1970 SC 1302; (5) Woolcombers of India Ltd. v. Woolcombers Workers Union, AIR 1973 SC 2758; (6) Ajantha Industries v. Central Board of Direct Taxes [1976] 102 ITR 281 (SC); AIR 1976 SC 437; (7) Siemens Engineering and Manufacturing Co. of India Ltd. v. Union of India, AIR 1976 SC 1785; (8) S.N. Mukherjee v. Union of India, AIR 1990 SC 1984; (9) Shanti Prasad Agarwalla v. Union of India, AIR 1991 SC 814; (10) Krishna Swami v. Union of India, AIR 1993 SC 1407; and (11) M.L. Jaggi v. Mahanagar Telephones Nigam Ltd., AIR 1996 SC 2476. In Testeels Ltd. v. N.M. Desai, Conciliation Officer, [1970] 37 FJR 7; AIR 1970 Guj 1, a Full Bench of the Gujarat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, the said courts cannot examine the correctness of the order under review. The High Court and the Supreme Court would be powerless to interfere so as to keep the Administrative Officer within the limits of the law. The result would be that the power of judicial review would be stultified and no redress being available to the citizen, there would be insidious encouragement to arbitrariness and caprice. If this requirement is insisted upon, then, they will be subject to judicial scrutiny and correction." By applying the law laid down in the aforementioned decisions to the facts of this case, we hold that the orders dated July 29, 1994 and June 26, 2002 passed by the Commissioner of Income-tax (Appeals) and the Tribunal are legally unsust ..... X X X X Extracts X X X X X X X X Extracts X X X X
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