SC lays down principles for courts while examining matters of search, seizure under Income Tax law
New Delhi(PTI): In a significant verdict, the Supreme Court on Wednesday laid down principles for high courts in matters of search and seizure under Income Tax rules, and said formation of opinion and reasons to believe recorded by revenue department is not a judicial or quasi-judicial function, but administrative in character.
A bench of Justices Hemant Gupta and V Ramasubramanian set aside the Gujarat High Court order quashing the warrant of authorization of search and seizure dated August 7, 2018 issued by Principal Director of Income Tax (investigation).
"We find that the High Court was not justified in setting aside the authorization of search dated August 7, 2018. Consequently, the appeal is allowed and the order passed by the High Court is set aside. As a consequence thereof, the Revenue would be at liberty to proceed against the assessee in accordance with law," the apex court ruled.
The High Court had passed the order on a plea of an Ahmedabad-based businessman who invested money in a recreation company in Goa and on whose premises search and seizure were conducted by the revenue department.
The bench said in light of earlier judgments, the sufficiency or inadequacy of reasons to believe recorded cannot be gone into while considering the validity of an act of authorization to conduct search and seizure.
"The belief recorded alone is justiciable, but only while keeping in view the Wednesbury Principle of Reasonableness. Such reasonableness is not a power to act as an appellate authority over the reasons to believe recorded," it said.
The bench said it would like to elaborate the principles in exercising the writ jurisdiction in the matter of search and seizure under Section 132 of the Income Tax Act.
"The formation of opinion and the reasons to believe recorded is not a judicial or quasi-judicial function, but administrative in character," it said, adding that the information must be in possession of the authorised official on the basis of the material and that the formation of opinion must be honest and bona fide and cannot be merely pretence.
It said consideration of any extraneous or irrelevant material would vitiate the belief/satisfaction.
"The authority must have information in its possession on the basis of which a reasonable belief can be founded that the person concerned has omitted or failed to produce books of accounts or other documents for production of which summons or notice had been issued, or such person will not produce such books of accounts or other documents even if summons or notice is issued to him," the bench said.
It said there should be reasonable belief that such a person is in possession of any money, bullion, jewellery or other valuable article which represents either wholly or partly income or property, which has not been or would not be disclosed.
"Such reasons may have to be placed before the High Court in the event of a challenge to formation of the belief of the competent authority in which event the Court would be entitled to examine the reasons for the formation of the belief, though not the sufficiency or adequacy thereof. In other words, the Court will examine whether the reasons recorded are actuated by mala fides or on a mere pretence and that no extraneous or irrelevant material has been considered," it said.
The bench said such reasons forming part of the satisfaction note are to satisfy the judicial consciousness of the Court and any part of such satisfaction note is not to be made part of the order.
"The question as to whether such reasons are adequate or not are not a matter for the Court to review in a writ petition. The sufficiency of the grounds which induced the competent authority to act is not a justiciable issue," the bench said.
It added that the relevance of the reasons for the formation of the belief is to be tested by the judicial restraint as in administrative action as the Court does not sit as a Court of appeal, but merely reviews the manner in which the decision was made.
"The Court shall not examine the sufficiency or adequacy thereof," it said, adding that in terms of the explanation inserted by the Finance Act, 2017 with retrospective effect from April 1, 1962, such reasons to believe as recorded by income tax authorities are not required to be disclosed to any person or any authority or the appellate tribunal.
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Real Madrid fines Valverde and Tchouaméni half a million euros each for altercation
Barcelona (AP): Real Madrid slapped players Federico Valverde and Aurélien Tchouaméni with half-a-million-euro ($588,000) fines on Friday for their altercation during practice.
The massive fines came a day after the midfielders tussled when the team trained. Valverde said in a post on social media on Thursday that no punches were thrown. But Valverde knocked his head on a table and he suffered a small cut that required a brief hospital visit.
On social media, Valverde initially called it a “meaningless fight” with a teammate and said “everything has been blown out of proportion."
His employers, however, considered it a significant enough breach of team discipline to nail both Valverde and Tchouaméni with fines that bite even the bank account of a top soccer player. The half-a-million euro penalties reflect the reputational damage the club was enduring in a chaotic end to a disappointing season.
In a statement, the 15-time European champion said its disciplinary action was concluded after both players expressed to the club “their complete remorse for what happened and apologized to one another.”
Madrid added they also apologized to their teammates, the coaching staff and club supporters, as well as showing their willingness to accept whatever disciplinary action the club deemed “opportune.”
Tchouaméni was back training with Madrid on Friday, two days before they play at Barcelona in a clasico. Madrid has to win otherwise Barcelona will be crowned La Liga champion.
After being notified of the fine, he posted a public apology to the club and its fans on social media.
“What happened this week in training is unacceptable,” Tchouaméni wrote. "I say this while thinking about the example we are expected to set for young people, whether in football or at school.
“Above all, I am sorry for the image we projected of the club.”
Valverde was not at practice due to the head knock.
Both players are set to play in the World Cup next month, with Tchouaméni playing for France and Valverde for Uruguay.
Chaotic end to a poor season
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The run-in between the players, who for seasons have played side by side in Madrid's midfield, came after they argued this week in previous training sessions. But tempers boiled over on Thursday. Spanish media was rife with reports that the players previously disagreed over the club's decision to let coach Xabi Alonso go after just months on the job.
It was not the only altercation involving Madrid players during training this week. Álvaro Carreras confirmed he was in a “minor” incident with a teammate. Spanish media said he and fellow defender Antonio Rüdiger got into a scuffle.
Álvaro Arbeloa, the coach who was promoted from Madrid's reserve team when Alonso was fired in January, will face tough questions on what went wrong inside the changing room when he gives a press conference on Saturday ahead of the clasico at Camp Nou.
Madrid is facing a second consecutive campaign without a major trophy amid rumors in the Spanish media that club president Florentino Pérez is considering bringing back Jose Mourinho to straighten out his underperforming team.
