TMI Blog2006 (5) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... DARSH KUAMR GOEL and RAJESH BINDAL JJ. Sanjay Bansal for the petitioner. Yogesh Putney for the respondents. JUDGMENT 1. This order will dispose of four writ petitions bearing C. W. P. Nos. 69, 1080 and 1724 of 1990 and 8499 of 1993. For the sake of convenience, the facts are being taken from C. W. P. No. 69 of 1990. 2. The petitioner challenged an order dated June 27, 1989, copy annexure P-10 ; passed by the Commissioner of Income-tax, Patiala, whereby revision, petitions filed by the petitioner under section 264 of the Income-tax Act, 1961 (for short "the Act"), for the assessment years 1978-79, 1979-80, 1980-81, were dismissed by a common order. 3 . The claim of the petitioner was that the interest entitlement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upreme Court of India. 5. In Harinagar Sugar Mills Ltd. v. Shyam Sunder Jhunjhunwala [1961] 31 Comp Cas 387 ; AIR 1961 SC 1669, while dealing with an order passed by the Central Government in exercise of its appellate powers under section 111(3) of the Companies Act, 1956, in the matter of refusal of a company to register the transfer of shares, the hon'ble Supreme Court observed (page 401) : "If the Central Government acts as a Tribunal exercising judicial powers and the exercise of that power is subject to the jurisdiction of this court under article 136 of the Constitution, we fail to see how the power of this court can be effectively exercised, if reasons are not given by the Central Government in support of its order." 6. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded the authority to reject his case were erroneous : the other, that the obligation to record reasons operates as a deterrent against possible arbitrary action by the executive authority invested with the judicial power." 8. In Mahabir Prasad Santosh Kumar v. State of U. P., AIR 1970 SC 1302, the hon'ble Supreme Court while quashing the cancellation of the petitioner's licence by the District Magistrate, observed (page 1304) : "Recording of reasons in support of a decision on a disputed claim by a quasi-judicial authority ensures that the decision is reached according to law and is not the result of caprice, whim or fancy or reached on grounds of policy or expediency. A party to the dispute is ordinarily entitled to know the gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red that an appeal generally lies from the decision of judicial and quasi-judicial authorities to this court by special leave granted under article 136. A judgment which does not disclose the reasons will be of little assistance to the court." 10. The same view was reiterated in Ajantha Industries v. Central Board of Direct Taxes [1976] 102 ITR 281 (SC) ; AIR 1976 SC 437 and Siemens Engineering and Manufacturing Co. of India Ltd. v. Union of India , AIR 1976 SC 1785. 11. In S. N. Mukherjee v. Union of India [1990] 4 SCC 594 ; AIR 1990 SC 1984, a Constitution Bench reviewed various judicial precedents on the subject and observed (page 1995) : "The decisions of this court deferred to above indicate that with regard to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f its jurisdiction by the appellate or supervisory authority. But the other considerations, referred to above, which have also weighed with this court in holding that an administrative authority must record reasons for its decision are of no less significance. These considerations show that the recording of reasons by an administrative authority serves a salutary purpose, namely, it excludes chances of arbitrariness and ensures a degree of fairness in the process of decision-making. The said purpose would apply equally to all decisions and its application cannot be confined to decisions which are subject to appeal, revision or judicial review. In our opinion, therefore, the requirement that reasons be recorded should govern the decisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterial before them and apart from any extraneous considerations by applying pre-existing legal norms to factual situations. Now, the necessity of giving reasons is an important safeguard to ensure observance of the duty to act judicially. It introduces clarity, checks the introduction of extraneous or irrelevant considerations and excludes or, at any rate minimises arbitrariness in the decision-making process. Another reason which compels making of such an order is based on the power of judicial review which is possessed by the High Court under article 226 and the Supreme Court under article 32 of the Constitution. These courts have the power under the said provisions to quash by certiorari a quasi-judicial order made by an administra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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