Duty to give reasons: orders rejecting post-rule reference applications must be set aside and remitted for fresh reasoned disposal.

Decisions rejecting applications made after a rule has been issued in reference proceedings under the Income-tax Act require a reasoned order; absence of stated reasons renders the decision without the necessary reasoned foundation and invalid. The operative effect is that such orders must be set aside and remitted for fresh disposal with reasons, ensuring the applicant receives adjudication based on articulated grounds rather than an unexplained rejection.

---

---

Issues: Whether a High Court order rejecting an application under Section 66(2) of the Income-tax Act, 1961, given after a rule has been issued, is valid when the High Court does not state reasons for its decision.

Analysis: Once a rule is issued in proceedings under Section 66(2) of the Income-tax Act, 1961, the deciding court must provide reasons when resolving the reference against the applicant. Absence of stated reasons means the decision lacks the required reasoned foundation and cannot stand. The appropriate remedy where reasons have not been given is to set aside the order and remit the matter for fresh consideration in accordance with law.

Conclusion: The High Court's order is set aside and the matter is remanded for disposal with reasons. Decision in favour of the assessee.

---