AI Drafter 
TaxTMI 
TaxTMI 
2005 (1) TMI 34
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.... imposed under sections 271D and 271E of the Income-tax Act, 1961, amounting to Rs. 1,45,000 and Rs. 95,000 respectively, by holding that the assessee has made transactions of cash bona fide and under ignorance of the provisions of the Income-tax law, ignoring the fact that ignorantia legis non-excusat (ignorance of law is no excuse)?" The respondent (hereinafter described as "the assessee") filed a return for the assessment year 1991-92 on July 23, 1992, declaring an income of Rs. 23,880. The Assessing Officer finalised the assessment under section 143(3) of the Act at a total income of Rs. 73,590. During the course of the assessment proceedings, it was noticed that the assessee had received cash deposits amounting to Rs. 1,45,000 from ....
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....read with sections 271D, 271E of the Income-tax Act, 1961. Accordingly, we direct the Assessing Officer to delete the penalties." We have heard Shri Rajesh Bindal, learned counsel for the Revenue, and Shri Rakesh Kumar Jain, learned counsel for the assessee, and perused the record. In our opinion, in addition to the question of law of which determination has been sought by the Revenue, the following substantial question of law calls for determination by this court: "Whether the order dated January 2, 1998, passed by the Tribunal in I. T. A. Nos. 3294 and 3295/Delhi of 1995 is vitiated due to violation of the rules of natural justice inasmuch as the same is totally bereft of reasons?" The principles of natural justice are multi-dime....
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.... to issue writ of certiorari to quash the orders passed by a quasi-judicial authority/Tribunal. Likewise, in appeal the apex court can nullify such order/decision. These powers can be effectively exercised by the superior courts only if the order under challenge contains reasons. If such order is cryptic and devoid of reasons, the courts cannot effectively exercise the power of judicial review and we cannot countenance a situation in which the administrative authorities vested with the power to decide the rights of the parties may stultify the powers of the court simply by not recording reasons in support of their decisions and/or by refraining from communicating such reasons to the affected person. This is the reason why the courts have in....
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....irement to record reasons the approach of this court is more in line with that of the American Courts. An important consideration which has weighed with the court for holding that an administrative authority exercising quasi-judicial functions must record the reasons for its decision, is that such a decision is subject to the appellate jurisdiction of this court under article 136 of the Constitution as well as the supervisory jurisdiction of the High Courts under article 227 of the Constitution and that the reasons, if recorded, would enable this court or the High Courts to effectively exercise the appellate or supervisory power. But this is not the sole consideration. The other considerations which have also weighed with the court in takin....
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....istrative authority exercising quasi-judicial functions irrespective of the fact whether the decision is subject to appeal, revision or judicial review. It may, however, be added that it is not required that the reasons should be as elaborate as in the decision of a court of law. The extent and nature of the reasons would depend on particular facts and circumstances. What is necessary is that the reasons are clear and explicit so as to indicate that the authority has given due consideration to the points in controversy. The need for recording of reasons is greater in a case where the order is passed at the original stage. The appellate or revisional authority, if it affirms such an order, need not give separate reasons if the appellate or r....
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....made by an administrative officer and this power of review can be effectively exercised only if the order is a speaking order. In the absence of any reasons in support of the order, 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." If the order passed by the Tribunal is scrutinised in the ....