2025 (6) TMI 82 - HC - Income Tax

Property Dispute Halts Benami Transactions Act Proceedings, Challenges Tax Assessment and Transaction Definition

Arpit Jagga Versus Deputy Commissioner of Income Tax (Benami Prohibition Unit), Kanpur

HC stayed proceedings under Benami Transactions Act notice, directing respondent to file counter-affidavit. Court recognized jurisdictional challenge ... Prohibition of Benami Property Transactions - Submissions have been made that as the property in question is cash, the same does not fall within the definition of 'benami transaction' u/s 2(9) of the Act. HELD THAT:- Besides the above, apparently, the case of the respondent is that the cash in question belongs to the petitioner and in those circumstances, the petitioner does not fall within the definition of 'benamidar' u/s 2(10) of the Act. Matter requires consideration. Counter affidavit may be filed by the next date. List the petition on 04.08.2025. The Allahabad High Court, through Hon'ble Chief Justice Arun Bhansali and Hon'ble Justice Kshitij Shailendra, addressed a petition challenging the issuance of a notice under Section 24 of the Prohibition of Benami Property Transactions Act, 1988 ('the Act'). The petitioner contended that the notice is 'ex facie without jurisdiction' since the same amount has already been assessed under Section 69 of the Income Tax Act, 1961. Further, it was argued that the property in question being cash does not fall within the definition of 'benami transaction' under Section 2(9) of the Act. Additionally, the respondent's position that the cash belongs to the petitioner was noted, implying the petitioner does not qualify as a 'benamidar' under Section 2(10). The Court observed that the matter 'requires consideration,' directed filing of a counter affidavit, and stayed all further proceedings pursuant to the impugned notice dated 25.02.2025 until further orders, listing the matter for hearing on 04.08.2025.