Section 10(15A) approval requires a speaking order; rejection quashed and reconsideration directed.

Approval under section 10(15A) of the Income-tax Act was essential for the claimed tax benefit, and without such approval the tax consequence of the lease agreements could not be finally determined. The rejection of the application was found to lack cogent reasons because it had been disposed of without a speaking order. The matter therefore required fresh examination by the Central Government as the competent authority. The impugned orders were quashed and the application was directed to be reconsidered by passing a speaking order, while the refund request was declined.

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Issues: Whether the rejection of the application seeking approval of the lease agreements under section 10(15A) of the Income-tax Act, 1961 was sustainable and whether the matter required reconsideration by the Central Government.

Analysis: The benefit of section 10(15A) was contingent upon approval of the agreement by the Central Government. In the absence of such approval, the tax consequence claimed by the petitioners could not be finally determined on the merits of the lease transactions. The impugned rejection was not supported by cogent reasons and the application had been disposed of without a speaking order. In these circumstances, the matter required fresh consideration by the Central Government, which was the proper authority to examine the relevant aspects.

Conclusion: The impugned orders were quashed and the Central Government was directed to reconsider the petitioners' application by passing a speaking order. The relief seeking refund was not granted.

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