2025 (11) TMI 1045 - AT - Benami Property

Order set aside and matter remanded for fresh merits adjudication of 55 properties after recalled Ganpati Dealcom decision

DCIT (BPU), Kanpur Versus M/s ACE Infracity Developers Pvt. Ltd. And Smt. Tara Mishra, through LRs & Anr.

AT set aside the impugned order and remanded the matter to the Adjudicating Authority for fresh adjudication on merits. The AT found the earlier refusal ... Benami transaction - appeal not decided on merits - Validity of impugned order denying the confirmation of the Provisional Attachment Order finding all the transactions of 55 properties prior to 25.10.2016 i.e. before coming into effect of the Amendment Act of 2016 - applicability of Apex Court decision in the case of Ganpati Dealcom [2022 (8) TMI 1047 - SUPREME COURT] - HELD THAT:- The facts are required to be re-appreciated and reconsidered by the Adjudicating Authority on remand of the case. The Provisional Attachment Order was not confirmed in the light of the judgment in the case of Ganpati Dealcom (supra). Once we would remand the case finding that the judgment in the case of Ganpati Dealcom (supra) no more exists presently, the Adjudicating Authority would obviously decide the case on merits after hearing both the parties. The respondents would be having opportunity to contest the case on merit and, therefore, we are unable to accept the argument raised by the respondents. It clear that initial Show Cause Notice followed by the second Show Cause Notice was pertaining to more than 100 properties while now the Provisional Attachment Order is only for 55 properties. In any case, the issue which should have been taken by the respondents at the initial stage before the Adjudicating Authority to summon the order dated 13.10.2021, they can now make such application on remand of the case to the Adjudicating Authority where all the issues raised by either of the parties would be considered. The direction aforesaid is for the reason that the impugned order has been passed solely based on the judgment of the Apex Court in the case of Ganpati Dealcom (supra) which has already been recalled by the Supreme Court vide its order dated 18.10.2024. It would not be out of place to mention that the impugned order otherwise makes a discussion in regard to the transactions in the hands of the respondents said to be benami but now on the remand of the case, the entire matter would be adjudicated afresh. Not inclined to accept the interlocutory application filed by the respondents, rather liberty is given to make similar application before the Adjudicating Authority which would consider all the aspects of the matter afresh which includes the issue raised by the appellant in the interlocutory application and otherwise on merit. Thus, we cause interference in the impugned order and is set aside. ISSUES PRESENTED AND CONSIDERED 1. Whether the Adjudicating Authority was correct in refusing to confirm provisional attachment of properties because the transactions predated the Benami Transactions (Prohibition) Amendment Act, 2016, in reliance on a now-recalled higher court judgment. 2. Whether the Tribunal should remand the matter for fresh adjudication when the impugned order was founded solely on a precedent subsequently recalled by the Apex Court. 3. Whether respondents' contention that the underlying transactions do not constitute benami holdings defeats the need for remand and fresh consideration on merits. 4. Whether an earlier order of the Initiating Officer dated 13.10.2021 (purported revocation of provisional attachment) ought to be summoned and acted upon by the Tribunal, and if not, whether respondents may seek that relief on remand. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Effect of recalled precedent on confirmation of provisional attachment Legal framework: The Prohibition of Benami Property Transactions Act, 1988 (as amended by the 2016 Amendment) governs validity of benami proceedings and confirms/prohibits attachments depending on applicability of substantive amendments. Administrative action (show cause, provisional attachment) must be adjudicated in accordance with extant law and binding judicial precedents. Precedent treatment: The Adjudicating Authority denied confirmation because it applied an Apex Court judgment that excluded pre-25.10.2016 transactions from the Amending Act's effect. That judgment has since been recalled by the Apex Court. Interpretation and reasoning: Where an impugned order rests solely on a higher court ruling which is subsequently recalled, the legal basis for that order ceases to exist. The Tribunal reasoned that recall of the precedent removes the ground on which denial of confirmation stood and mandates fresh adjudication under the present state of law. Ratio vs. Obiter: Ratio - an order founded exclusively on a precedent subsequently recalled must be re-examined on merits; consequence is remand for fresh consideration. Obiter - ancillary comments in the impugned order on factual aspects are not taken as binding since the dispositive conclusion flowed from the recalled precedent. Conclusion: The Tribunal set aside the Adjudicating Authority's refusal to confirm attachment and remanded the matter for fresh decision because the controlling precedent no longer exists. Issue 2 - Remand for fresh adjudication vs deciding on existing record Legal framework: Administrative adjudication requires appreciation of material and evidence and application of current law; where legal basis changes, factfinding may need reappraisal by the adjudicator who heard the evidence. Precedent treatment: The Tribunal referenced its earlier order that had remitted proceedings because of lack of territorial jurisdiction, allowing the Initiating Officer to proceed afresh in accordance with law. That liberty principle supports fresh adjudication when procedural or legal infirmity infects earlier orders. Interpretation and reasoning: The Tribunal held that because the impugned order was grounded on recalled authority, the Adjudicating Authority must re-appreciate evidence and legal questions afresh, giving parties an opportunity to be heard. The Tribunal rejected the respondents' submission that remand is futile where the respondent asserts lack of benami evidence, because that assertion pertains to merits and should be tested before the Adjudicating Authority. Ratio vs. Obiter: Ratio - remand is appropriate where the dispositive legal premise of an adjudicatory order is invalidated; courts should remit for reconsideration rather than decide afresh on incomplete briefing of merits. Conclusion: The matter is remanded to the Adjudicating Authority to decide on merits afresh within statutory time, commencing from the parties' first appearance on the specified date. Issue 3 - Respondents' contention of lack of benami transaction and the Tribunal's approach to merits Legal framework: Determination of benami transactions is a fact- and evidence-driven enquiry for the Adjudicating Authority, subject to appellate scrutiny. Precedent treatment: The Tribunal noted that earlier appellate intervention was limited to territorial jurisdiction, with liberty to reinitiate merits consideration by a properly empowered Initiating Officer. Interpretation and reasoning: The Tribunal found respondents' insistence that no benami case exists insufficient to deny remand because the impugned order did not reach a merits conclusion independent of the recalled precedent. The Tribunal emphasized that on remand the Adjudicating Authority must examine the evidence and determine benami status, affording parties full opportunity to contest merits. Ratio vs. Obiter: Ratio - assertions on merits do not preclude remand where prior order's disposition rested on law now reversed or recalled; merits must be decided by the primary factfinder. Conclusion: Respondents' merit-based objections do not negate remand; the Adjudicating Authority must reconsider merits on remand. Issue 4 - Request to summon Initiating Officer's order dated 13.10.2021 and procedural availability on remand Legal framework: Appellate or revisional tribunals may summon relevant documents, but procedural fairness and proper locus for raising issues lie with the primary adjudicator unless exceptional grounds require immediate consideration. Precedent treatment: The Tribunal observed that respondents did not pursue the order dated 13.10.2021 before the Adjudicating Authority when given opportunity; thus the matter remained open to be raised on remand. Interpretation and reasoning: The Tribunal declined to grant the interlocutory relief of summoning and acting on the 13.10.2021 order at the appellate stage, reasoning that the Adjudicating Authority on remand is the appropriate forum to consider such a document and related contentions. The Tribunal granted respondents liberty to raise applications before the Adjudicating Authority and made clear that the remand would encompass all issues, including the 13.10.2021 order and any differences in the scope of properties between earlier and current proceedings. Ratio vs. Obiter: Ratio - where an alleged prior administrative order may be material, the correct course is to permit the parties to press for its consideration before the Adjudicating Authority on remand rather than for the appellate tribunal to summarily decide or enforce it absent exceptional circumstances. Conclusion: The interlocutory application to summon the 13.10.2021 order was declined; respondents may renew the application before the Adjudicating Authority on remand, where all issues will be examined afresh. Overall disposition and procedural direction The Tribunal set aside the Adjudicating Authority's impugned order (which denied confirmation of provisional attachment solely on the basis of a recalled precedent) and remanded the matter for fresh adjudication on merits within the statutory period, starting from the parties' first appearance on the date specified by the Tribunal; liberty granted to parties to raise all issues, including reliance on earlier Initiating Officer orders, before the Adjudicating Authority.