TaxTMI 
TaxTMI 
2018 (2) TMI 578
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....nt"s Locker No. 004262/003/005/0096 were seized on 02.01.2017 and subsequently retained by Respondent no.-1 for further investigation on the plea that the same may be attached under section 5(1) of PMLA in due course. 4. The allegations against her husband are that during investigation under PMLA that Ashish Kumar along with others have indulged in criminal act of money laundering to sabotage the demonetization policy announced by Govt. of India and he has been arraigned as an accused of scheduled offences 409/420/188/201/120B/34 IPC & 11/12/13 Prevention of Corruption Act, 1988. Section 201 IPC was also added in the case for destruction of Demand Drafts by him. The appeal filed by the husband for retaining the property was withdrawn by him after the hearing in the present appeal. 5. The respondent no. 2 passed an order dated 05.06.2017 allowing the OA filed by the Respondent No. 1. On the application u/s 20(4) of the Act. Section 20(4) read as under:- Retention of property:- The Adjudicating Authority, before authorising the retention or continuation of freezing of such property beyond the period specified in sub-section (1), shall satisfy himself that the property is prima fa....
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....he likes - she may spend the whole of it or give it away at her own pleasure by gift or will without any reference to her husband. Ordinarily, the husband has no right or interest in it with the sole exception that in times of extreme distress, as in famine, illness or the like, the husband can utilize it but he is morally bound to restore it or its value when he is able to do so. This right is purely personal to the husband and the property so received by him in marriage cannot be proceeded against even in execution of a decree for debt." (ii) In Ashok Chaddha Vs. Income Tax Officer [ITA 274/2011] decided on 05/07/2011 [Paras 3, 4 & 5], a Division Bench of Delhi High Court observed as under: "Para 3...After considering the aforesaid submissions we are of the view that addition made is totally arbitrary and is not founded on any cogent basis or evidence. We have to keep in mind that the assessee was married for more than 25-30 years. The jewellery in question is not very substantial. The learned counsel for the appellant/assessee is correct in her submission that it is a normal custom for woman to receive jewellery in the form of "stree dhan" or on other occas....
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....ent that the jewellery and ornaments were purchased by the appellant. 11. Law on reasons to believe In the recent case decided by the Division Bench of Delhi High Court in batch of matters in the W.P. (c) 5320/2017 J. Sekar Vs. Union of India and ors. as well as in the other writ-petitions, decided on 11.01.2018 the Hon'ble Division Bench in celebrated judgment has dealt with the issue of reason to believe and held that there must reasons of beliees in writing and simple assumption and presumption of the language of Section mentioning does not serve any purpose. Para 70-73 of the Judgment reads as under:- 70. The expression reasons to believe under Section 26 IPC is understood in the sense of sufficient cause to believe that thing but not otherwise'. In Phool Chand Bajrang Lal v. ITO [1993] 203 ITR 456 (SC), the Supreme Court in the context of the Income Tax Act, 1961 explained the expression as under: Since, the belief is that of the Income-tax Officer, the sufficiency of reasons for forming the belief, is not for the Court to judge but it is open to an assessee to establish that there in fact existed no belief or that the belief was not at all a bona fide one or was based o....
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....s to satisfy the requirements of sub-section (1) of Section 68H of the Act. 72. Reasons to believe cannot be a rubber stamping of the opinion already formed by someone else. The officer who is supposed to write down his reasons to believe has to independently apply his mind. Further, and more importantly, it cannot be a mechanical reproduction of the words in the statute. When an authority judicially reviewing such a decision peruses such reasons to believe, it must be apparent to the reviewing authority that the officer penning the reasons has applied his mind to the materials available on record and has, on that basis, arrived at his reasons to believe. The process of thinking of the officer must be discernible. The reasons have to be made explicit. It is only the reasons that can enable the reviewing authority to discern how the officer formed his reasons to believe. As explained in Oriental Insurance Company v. Commissioner of Income Tax [2015] 378 ITR 421 (Delhi), ―the prima facie formation of belief should be rational, coherent and not ex facie incorrect and contrary to what is on record‖. A rubberstamp reason can never take the cha....
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....ision making process then it is impossible to know whether the person deciding is faithful to the doctrine of precedent or to principles of incrementalism. l. Reasons in support of decisions must be cogent, clear and succinct. A pretence of reasons or Rs. rubber-stamp reasons' is not to be equated with a valid decision making process. m. It cannot be doubted that transparency is the sine qua non of restraint on abuse of judicial powers. Transparency in decision making not only makes the judges and decision makers less prone to errors but also makes them subject to broader scrutiny. (See David Shapiro in Defence of Judicial Candor (1987) 100 Harvard Law Review 731-737). n. Since the requirement to record reasons emanates from the broad doctrine of fairness in decision making, the said requirement is now virtually a component of human rights and was considered part of Strasbourg Jurisprudence. See (1994) 19 EHRR 553, at 562 para 29 and Anya vs. University of Oxford, 2001 EWCA Civ 405, wherein the Court referred to Article 6 of European Convention of Human Rights which requires, "adequate and intelligent reasons must be given for judicial decisions". o. In all common law j....
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....ommissioner for such retention is obtained. In other words two conditions must be fulfilled before such extended retention becomes permissible in law:' (a) reasons in writing must be recorded by the authorised officer or the concerned Income-fax Officer seeking the Commissioner's approval and (b) obtaining of the Commissioner's approval for such extended retention and if either of these conditions is not fulfilled such extended retention will become unlawful and the concerned person (i.e. the person from whose custody such books or documents have been seized or the person to whom these belong) acquires a right to the return of the same forthwith. It is true that Sub-section (8) does not in terms provide that the Commissioner's approval or the recorded reasons on which it might be based should be communicated to the concerned person but in our view since the person concerned is bound to be materially prejudiced in the enforcement of his right to have such books and documents returned to him by being kept ignorant about the factum of fulfillment of either of the conditions it is obligatory upon the Revenue to communicate the Commissioner's ....
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....ealing with similar requirements under Section 68H of the Narcotics Drugs and Psychotropic Substances Act, has held that both the statutory elements, namely, "reason to believe" and "recording of reasons" must be premised on the materials produced before him and that such materials must have been gathered during the investigation carried out in terms of Section 68-E or otherwise. It was further held that indisputably, therefore, he must have some materials before him and that if no such material had been placed before him, he cannot initiate a proceeding. 15. The Hon'ble High Court of Andhra Pradesh, in the case of K. Munivelu v. The Government of India and Ors. [AIR1972AP318], while dealing with the terms "Reason to Believe" and "suspects", with respect to Section 3 (2) of Essential Commodities Act, 1955, which deals with the power of the authorized officer to enter and search the premises and the seizure thereof, and the Andhra Pradesh Coarse Grains (Export) Control Order, 1965, has held that the term "Reason to believe" is a much stronger expression than the word "suspect" and further observed from the meanings attributed to the words "suspect" and "reason to believe", that....