Recording of reasons required when refusing tax-procedure applications; absence mandates remand for reasoned disposal.

The principal issue concerns the requirement that a court must record reasons when refusing to entertain questions under the Income-tax Act procedure; the SC held that the High Court erred by rejecting the section 66(2) application without reasons, which is a procedural defect preventing effective appellate or supervisory review, and that remand is appropriate where material questions lack stated reasons so the matter can be considered and disposed of with proper reasoning. Outcome: the HC order was set aside and the matter remanded for disposal in accordance with law; appeal allowed for the assessee.

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Issues: Whether the High Court erred in rejecting the application under section 66(2) of the Income-tax Act, 1961 without recording reasons for refusing to entertain the questions raised, and whether the matter should be remanded for disposal in accordance with law.

Analysis: The High Court issued a rule and subsequently rejected the application under section 66(2) without delivering a reasoned judgment. The absence of recorded reasons for refusing to entertain the application as to the two questions placed before the Court is a procedural defect that prevents effective appellate or supervisory review. A remand is appropriate where a lower court or tribunal has failed to state reasons on material questions, so that the matter can be considered and disposed of with proper reasoning in accordance with law.

Conclusion: The High Court order is set aside and the case is remanded to the High Court for disposal in accordance with law; the appeal is allowed in favour of the appellant (assessee).

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