Reasoned order requirement in refund rejection matters: non-speaking denial was quashed and sent back for fresh consideration.

A rejection under section 119(2)(b) of the Income-tax Act was unsustainable because no reasons were disclosed for declining the refund request. The Board was required to pass a speaking and reasoned order after giving the petitioner an opportunity of hearing, and to consider the earlier court decision and Circular No. 670 on reconsideration. The rejection order was quashed and the matter was remitted to the Central Board of Direct Taxes for fresh consideration with a personal hearing.

---

---

Issues: Whether the rejection of the petition under section 119(2)(b) of the Income-tax Act, 1961, without disclosure of reasons, could be sustained and whether the matter required fresh consideration by the Central Board of Direct Taxes.

Analysis: The rejection communication did not disclose the reasons for declining the request for refund. In matters of this nature, the Board was required to pass a speaking and reasoned order after affording the petitioner an opportunity of hearing. The earlier decision of the Court and Circular No. 670 were required to be taken into account while reconsidering the request.

Conclusion: The rejection order was quashed and the matter was remitted to the Central Board of Direct Taxes for fresh consideration after giving the petitioner a personal hearing.

---