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2018 (12) TMI 273
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....vant facts are taken from appeal no. 40/2018 filed by K. Renuga. The same are referred as under:- (i) The Appellant is employed as an Assistant Professor in St. Joseph's Institute of Science and Technology since 2013 and is drawing salary of Rs. 55,084 p.m. The said college is run by St. Joseph Educational Trust (in short "Trust"), whose Chairman is Shri B. Babu Manoharan. The Appellant is filing her Income tax returns regularly. She has a bank account No. 445443811 with Indian Bank, Chennai in which there was a credit balance of Rs. 737/- on the date of attachment. (ii) The Appellant on 15/11/2016 had received an amount of Rs. 1,00,000/- as salary advance from the Trust, through Dr. T. Kalyani, Head of her Department, out of which she used Rs. 95,000/- in repaying her debts. (iii) On 17/11/2016, a search action u/s 132 of the Income tax Act, 1961 was conducted in the case of the Trust. (iv) On 24/11/2016, out of the advance of Rs. 1 Lakh received, only Rs. 5,000/- were left with her, which amount upon the insistence of Income tax Authorities, the Appellant returned back to the Trust. 4. During the course of search, sworn statement of the ....
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....) Amendment Act, 2016. The savings bank account held by the Benamidhar in your branch is SB A/c No. 445443811. You are hereby required u/s 24(3) of the Benami Transactions (Prohibitions) Amendment Act, 2016 to pay to provisionally attach any amount due from you to or held by you or.............." 8. The Appellant placed on record before the Adjudicating Authority the statement of her Indian Bank account from November, 2016 to March, 2017. It was stated that merely on the basis of assumption of the I.O that Rs. 1 Lakh of cash was deposited in the said account and is lying there. 9. The appellant in her reply dated 09/02/2017 to the Provisional Attachment order reiterated the factual position as aforesaid and requested the I.O to withdraw the Provisional Attachment order. The I.O ignoring the replies given from time to time by the Appellant, passed the Attachment order dated 13.03.2017 under section 24(4)(a)(i) of the Act continuing the provisional attachment of the property already made under sub-section (3) of Section 24 of the Act which is packed with factual in accuracies. 10. In the I.O's order, it was stated, as under:- a. Para 6 of I.O's order reprodu....
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....T Act dated 13.03.2017 is hereby confirmed. The properties are declared are to be benami properties. The reference no. 3 of 2017 is allowed." 13. It is not disputed by the learned counsel for the respondent that these three appellants who had allegedly received the said amount, have returned back the remaining salary amount to the management before 31.3.2017. The detailed chart is also provided by the learned counsel of the appellant during the course of hearing of the appeal. The factual position in the chart is not denied by the counsel for the respondent. The same is reproduced here below: S. N (1) Tribunal's Reference & Appellant's Name (2) Salary Advance taken (3) Part Salary Advance returned within 10 days (4) Remaining Salary advance returned back (5) Date of Receipt Amount Rs. Date of Return Amount Rs. Date of Return Amount Rs. Mode of Return B.1 PB 40/2018 K. Renuga 15.11.16 1,00,000 24.11.16 5,000 30.03.17 95,000 Cash B.2 PB 51/2018 S. Tamilmani 14.11.16 2,00,000 22.11.16 1,50,000 31.03.17 50,000 Bank transfer B.3 PB 28/2018 K.Vijaya-kumar 14.11.16 2,00,0....
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....ges as benamidars thereafter attaching the salary bank accounts of these employees up to the value of the alleged "benami" property. 17. A search action by the Income Tax Department commenced on 17.11.2016. During the course of this search, from the office computer of the accountant, details of disbursement of amounts to various Department Heads for further disbursements were found. 18. The statement of the Chairman was recorded during the course of search wherein he stated that salary advance was given to employees of two colleges as salary advance for their personal purposes. This was given only to interested employees, who gave their consent for the same. The employees in their statements also agreed to having received such money. He also said that he would pay tax on the entire amount mentioned in the list of disbursement, as income of the trusts. The trust accordingly honored the Chairman's commitment and paid taxes on income of Rs. 8.18 Crores, availing the scheme of PMGKY. In the present lot or total 49 appeals, no appeal is with regard to Chairman. 19. The grounds 3 to 7 of the appeal are reproduced hereunder in order to understand the case of the appellants in....
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....an. Mr. Babu Manoharan is neither the beneficial nor the source of the amounts disbursed. Ground 4: Property was not held for the benefit of alleged beneficial owner and hence the order passed by the Authority is liable to be set aside. The facts of the present case clearly show that the cash of Rs. 1 lakh received by the Appellant as salary advance partly consumed and partly returned to the Trust. Such genuine transactions are outside the purview of the Benami Act. Ground 5: Disbursed amount belongs to the Trusts and not the alleged beneficial owner and hence the order passed by the Authority is liable to be set aside. The Adjudicating Authority while passing the order has completely ignored the fact that the amount of Rs. 8.18 crores disbursed by the two Trusts (namely St. Joseph Educational Trust and St. Joseph Institute of Science & Technology Trust) has been fully declared by the Respective Trusts under the Pradhan Mantri Garib Kalyan Yojana (PMGKY) scheme and even appropriate taxes were paid in full, the evidence of which was submitted before the Adjudicating Authority on 15-05-2017. Ground 6: The Adjudicating Authority has passed the order by completely ignori....
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.... stands in such capacity and includes a trustee, executor, partner, director of a company, a depository or a participant as an agent of a depository under the Depositories Act, 1996 (22 of 1996) and any other person as may be notified by the Central Government for this purpose; (iii) any person being an individual in the name of his spouse or in the name of any child of such individual and the consideration for such property has been provided or paid out of the known sources of the individual; (iv) any person in the name of his brother or sister or lineal ascendant or descendant, where the names of brother or sister or lineal ascendant or descendant and the individual appear as joint-owners in any document, and the consideration for such property has been provided or paid out of the known sources of the individual; or (B) a transaction or an arrangement in respect of a property carried out or made in a fictitious name; or (C) a transaction or an arrangement in respect of a property where the owner of the property is not aware of, or, denies knowledge of, such ownership; (D) a transaction or an arrangement in respect of a property where the person providin....
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....interested. The benamidar has the ostensible title to the property standing in his name; but the beneficial ownership of the property does not vest in him but in the real owner. 23. The Act was amended in the year 2016 with the following objects: STATEMENT OF OBJECTS AND REASONS "The Benami Transactions (Prohibition) Act, 1988 was enacted to prohibit benami transactions and the right to recover property held benami. The said Act, inter alia, provides that-(a) all the properties held benami shall be subject to acquisition by such authority in such manner and after following such procedure as may be prescribed; (b) no amount shall be payable for the acquisition of any property held benami; (c) the purchase of property by any person in the name of his wife or unmarried daughter for their benefit would not be benami transaction; (d) the securities held by a depository as registered owner under the provisions of the Depositories Act, 1996 or participant as an agent of a depository would not be benami transactions. 2. During the administration of the Benami Transactions (Prohibition) Act, 1988, it was found that the provisions of the aforesaid Act are inadeq....
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....t the offence, does an act towards its commission; such an act need not be the penultimate act towards the commission of that offence but must be an act during the course of committing that offence." Thus, an "attempt to indulge" would necessarily require not only a positive "intention" to commit the offence, but also preparation for the same coupled with doing of an act towards commission of such offence with such intention to commit the offence. Respondent failed to produce any material or circumstantial evidence whatsoever, oral or documentary, to show any such 'intention' and 'attempt' on the part of any of the petitioners. (ii) RE: KNOWINGLY ASSISTS OR KNOWINGLY IS A PARTY: In Joti Parshad v. State of Haryana 1993 Supp (2) SCC 497 the Hon'ble Supreme Court has held as follows- "5. Under the Indian penal law, guilt in respect of almost all the offences is fastened either on the ground of "intention" or "knowledge" or "reason to believe". We are now concerned with the expressions "knowledge" and "reason to believe". "Knowledge" is an awareness on the part of the person concerned indicating his state of mind. "Reason to beli....
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....of it in his bank account did not arise. Therefore, there was no benami property lying in the Bank account of the Appellant which has been attached. 33. (a) In the case of Ohlson v. Hylton [1975] 1 WLR 724, the Queens Bench Division held: "This is a case in which the mischief at which the statute is aimed appears to me to be very clear. Immediately prior to the passing of the Act of 1953 the criminal law was adequate to deal with the actual use of weapons in the course of a criminal assault. Where it was lacking, however, was that the mere carrying of offensive weapons was not an offence. The long title of the Act reads as follows: "An Act to prohibit the carrying of offensive weapons in public places without lawful authority or reasonable excuse." Parliament is there recognising the need for preventive justice where, by preventing the carriage of offensive weapons in a public place, it reduced the opportunity for the use of such weapons. I have no doubt that this was a worthy objective, and that the Act is an extremely important one. If, however, the prosecutor is right, the scope of section 1 goes far beyond the mischief aimed at, and in every case where an assault is....
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....certaining the intention of the legislature, such as the history of the legislation and the purposes thereof, the mischief which it intended to suppress and the other provisions of the statute, and construe the language of Section 2(d) in the light of the indications furnished by them. (c) Turning first to the history of the legislation, its genesis is to be found in the Bombay Lotteries and Prize Competitions Control and Tax Act (Bom 54 of 1948). That Act was passed with the object of controlling and taxing lotteries and prize competitions within the Province of Bombay, and as originally enacted, it applied only to competitions conducted within the Province of Bombay. Section 7 of the Act provided that "a prize competition shall be deemed to be an unlawful prize competition unless a licence in respect of such competition has been obtained by the promoter thereof". Section 12 imposed a tax on the amounts received in respect of competitions which had been licensed under the Act. With a view to avoid the operation of the taxing provisions of this enactment, persons who had thereto before been conducting prize competitions within the Province of Bombay shifted the venue of th....
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....d by Parliament by law." Having regard to the circumstances under which the resolutions came to be passed, there cannot be any reasonable doubt that the law which the State legislatures moved Parliament to enact under Article 252(1) was one to control and regulate prize competitions of a gambling character. Competitions in which success depended substantially on skill could not have been in the minds of the legislatures which passed those resolutions. Those competitions had not been the subject of any controversy in court. They had done no harm to the public and had presented no problems to the States, and at no time had there been any legislation directed to regulating them. And if the State legislatures felt that there was any need to regulate even those competitions, they could have themselves effectively done so without resort to the special jurisdiction under Article 252(1). It should further be observed that the language of the resolutions is that it is desirable to control competitions. If it was intended that Parliament should legislate also on competitions involving skill, the word "control" would seem to be not appropriate. While control and regulation would be requisi....
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....is also contrary to record with respect to the findings th1t the sworn statements, which were recorded, were withdrawn and that the advance was beyond the paying capacity of the lecturers and staff. 39. It is imperative that the investigating officer must form a reason to believe based on application of mind and appreciation of the material on record (Asstt. CIT v. Dhariya Construction Co. [2010] 328 ITR 515/ & CIT v. Kelvinator India Ltd.[2010] 320 ITR 561 (SC). 40. The notice shows that it is mechanical in nature and only talks about receipt of cash. In fact all notices are identical except for the amount mentioned. It shows a lack of application of mind, thus making the jurisdiction assumed under section 24 is invalid. 41. The facts of the present case are clear that the property was never held by the appellants. The amount received by them have returned/adjusted towards salaries. Even the question of any arrangement in the present case does not arise as the appellants have received only advance salary from the employer under oral contract at the asking of the respondent, the same was immediately returned. The said factual position has not been denied by the respondent.....