Benami Property Act: Transactions Before 2016 Amendment Exempt from Orders, Says HC; Writ Petitions Granted.

The HC quashed the orders dated 26.04.2022 and 27.04.2022 issued under Section 26(3) of the Prohibition of Benami Property Transactions Act, 1988, ruling that transactions before the 2016 Amendment Act are not covered. The writ petitions were allowed, miscellaneous applications closed, and no costs were ordered.

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Issues:
Challenge to orders dated 26.04.2022 & 27.04.2022 under Section 26(3) of the Prohibition of Benami Property Transactions Act, 1988.

Analysis:
The High Court, comprising Hon'ble The Chief Justice Ujjal Bhuyan and Hon'ble Sri Justice C.V.Bhaskar Reddy, heard the arguments presented by the learned counsels for the petitioners, the Income Tax Department, and the Union of India. The challenge in the writ petitions was against the orders issued by the adjudicating authority under Section 26(3) of the Benami Property Transactions Act, 1988, dated 26.04.2022 & 27.04.2022. The main contention was that the transaction in question occurred on 20.12.2014, before the enactment of the Benami Transactions (Prohibition) (Amendment) Act, 2016.

The Court referred to a previous judgment in the case of Nexus Feeds Limited Vs. Assistant Commissioner of Income Tax, where it was determined that transactions predating the Amendment Act of 2016 were not covered under the Benami Property Transactions Act. This interpretation was subsequently upheld by the Supreme Court in the case of Union of India Vs. Ganpati Dealcom Pvt. Ltd. Consequently, the High Court set aside and quashed the impugned orders dated 26.04.2022 and 27.04.2022 issued by the adjudicating authority.

As a result of the above analysis, the writ petitions were allowed, and any pending miscellaneous applications were closed. The Court also specified that there would be no order as to costs in this matter.

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