Tribunal sets aside orders, releases properties, finds transactions genuine. Procedural lapses render attachments invalid.

The Tribunal set aside the impugned orders in all three appeals, releasing the attached properties. It found the appellants did not hold any benami property, determining the transactions were genuine salary advances. Procedural lapses by the Initiating Officer and Adjudicating Authority rendered the attachment orders invalid. The appeals were disposed of with no costs.

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Issues Involved:
1. Legality of the Provisional Attachment Order under Section 24(3) of the Prohibition of Benami Property Transactions Act, 1988.
2. Validity of the Adjudicating Authority's order under Section 26(3) of the Act.
3. Determination of whether the transactions in question were "benami" transactions.
4. Compliance with procedural requirements under the Benami Act.
5. Application of the Benami Act in the context of demonetization.

Detailed Analysis:

Issue 1: Legality of the Provisional Attachment Order under Section 24(3)
The Provisional Attachment Order dated 25.01.2017 was issued by the Initiating Officer (I.O.) under Section 24(3) of the Act to attach the appellant’s bank account. The appellant argued that the amount of Rs. 1,00,000 received as salary advance was used to repay debts and the remaining Rs. 5,000 was returned to the Trust. The I.O. ignored the appellant's sworn statement and replies, continuing the attachment under Section 24(4)(a)(i).

Issue 2: Validity of the Adjudicating Authority's Order under Section 26(3)
The Adjudicating Authority upheld the I.O.'s order, concluding that the properties involved were benami properties. The appellant contended that the Authority's order was perverse, illegal, and based on non-existent facts. The Authority failed to consider the appellant's submissions and relied on assumptions without evidence.

Issue 3: Determination of Whether the Transactions Were "Benami"
The appellant argued that the salary advance was a genuine transaction and not a benami transaction. Section 2(9) of the Act defines a benami transaction as one where the property is held by a person who has not provided the consideration and is held for the benefit of the person who provided the consideration. The appellant received the advance for personal purposes and returned it upon the insistence of the Income Tax authorities. The Tribunal found no evidence of conspiracy or criminal activity linking the appellants with the employer.

Issue 4: Compliance with Procedural Requirements
The appellant claimed that the I.O. did not provide relied-upon documents with the show cause notice and the Adjudicating Authority did not consider the appellant's written submissions. The Tribunal noted that the I.O. failed to form a "reason to believe" based on cogent evidence, and the notices issued were mechanical, lacking application of mind.

Issue 5: Application of the Benami Act in the Context of Demonetization
The Tribunal observed that the impugned order assumed the disbursement aimed to bring undisclosed amounts into circulation, which was beyond the purview of the Act. The Tribunal emphasized that the Act should punish only transactions involving mere lending of name without any intention to benefit the name lender.

Conclusion:
The Tribunal set aside the impugned orders dated 27.03.2018 in all three appeals, releasing the attached properties forthwith. The Tribunal found that the appellants did not hold any benami property and were not benamidars. The transactions were genuine salary advances, and the procedural lapses by the I.O. and Adjudicating Authority rendered the attachment orders invalid. The appeals and pending applications were disposed of with no costs.

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