INCOME TAX

Passing of speaking orders by Comm. u/s 273A of IT and 18B of WT Act

INSTRUCTION NO. 5152/1993

 Dated : February 5, 1993

Section(s) Referred: 273A , 18B of Wealth Tax Act

Statute: Income - Tax Act, 1961

Reference is invited to Instruction No. 1377 dated 27th January 1981 and Instruction No. 1417 dated 29th September, 1981 in which the Board had advised the Commissioners to pass speaking orders u/s. 273A of Income Tax Act and u/s. 18B of Wealth Tax Act. However instances continue to come to the notice of the Board where the Commissioners have passed orders under the aforesaid provisions in an arbitrary manner without supporting the same by reason. In one of the cases which recently came to the notice of the Board, the petition u/s. 273A has been disposed of by the CIT by simply informing the assessee that on careful consideration, the petition is rejected. In another case the petition has been rejected only on the ground that the original return of income was accepted u/s.143(1).

2. Needless to say that such orders not only adversely affect the image of the Department in the eyes of the tax payer, but they also invite adverse remarks from judiciary if the petitioner chooses to file a writ of certiorari. The powers of CCIT/CIT u/s. 273A of I.T. Act/18B of W.T. Act are quasi judicial powers. It is now well settled that where an authority makes an order in the exercise of a quasi judicial function, it must record its reasons in support of its orders.

3. It is therefore once again reiterated that orders under the aforesaid provisions should be speaking one. The CCIT/CIT are also requested to exercise their descretion in a judicious manner.

4. The contents of this letter may please be brought to the notice of all Commissioners working in your region.

F.No. 281/11/92-IT(INV.III)