TaxTMI 
TaxTMI 
2022 (7) TMI 529
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....d in the business of money lending, chit fund and trading of old boxes and waste paper, besides made investments in Petrol Bunk, automobile trading company. While so, during the month of November, 2017, a search was conducted in his premises consequent to the search in the case of Mrs.V.K.Sasikala. During the course of the same, various documents were impounded and sworn statements were recorded. Subsequently, the appellant received notices under section 153C of the Act, for the assessment years 2012-13 to 2017-18, based on the material seized from the office of M/s.Ganga Foundations Pvt. Ltd, alleging that the appellant had received a sum of Rs.18 crores towards his share in the Spectrum Mall located at Perambur, Chennai. 5.The appellant further averred that while so, he received a show cause notice under section 24(1) of the Act on 01.11.2019 from the office of the first respondent as if he is a binamidar for the identified beneficial owner viz., Mrs.V.K.Sasikala with respect to his share in the Spectrum Mall and he was called upon to reply on or before 20.11.2019 as to why the same should not be held to be a benami property. Upon receipt of the same, the appellant was not abl....
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.... evidence. Further, the appellant was not provided with the entire documents that have been relied on by the first respondent for initiating the proceedings and he was not given an opportunity of cross examination of the witnesses before passing the order under section 24(4) of the Act. Thus, the first respondent has acted totally against the provisions of law and the principles of natural justice. However, the learned Judge erred in holding that the process and procedure as envisaged for provisional attachment under section 24 is of a narrower compass, when compared with the process of adjudication to follow thereafter. 6.3. The learned counsel for the appellant also submitted that as per section 24(4)(a)(ii), the first respondent is also empowered to revoke the entire proceedings initiated under section 24 of the Act, if the appellant is able to satisfy that the transaction is not benami in nature. However, the first respondent has conducted the proceedings in an arbitrary manner, without following due process of law. The learned Judge also failed to take note of the same and erred in dismissing the writ petition filed by the appellant. Therefore, the learned counsel sought to....
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....enami transactions and the right to recover property held benami. The said Act makes it clear that 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; and no amount shall be payable for the acquisition of any property held benami. It also provides a mechanism and procedure for confiscation of property held benami. Section 24 deals with notice and attachment of property involved in benami transaction, which reads as follows: "24.Notice and attachment of property involved in benami transaction.- (1)Where the Initiating Officer, on the basis of material in his possession, has reason to believe that any person is a benamidar in respect of a property, he may, after recording reasons in writing, issue a notice to the person to show cause within such time as may be specified in the notice why the property should not be treated as benami property. (2)Where a notice under sub-section(1) specifies any property as being held by a benamidar referred to in that sub-section, a copy of the notice shall also be issued to the beneficial owner if his identity is known. ....
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.... shall be deemed to be extended to seven days.] (5)Where the Initiating Officer passes an order continuing the provisional attachment of the property under sub-clause (i) of clause (a) of sub-section (4) or passes an order provisionally attaching the property under sub-clause (i) of clause (b) of that sub-section, he shall, within fifteen days from the date of the attachment, draw up a statement of the case and refer it to the Adjudicating Authority. A reading of the aforesaid provision would show that as per section 24(1), when the Initiating Officer based on the materials in his possession, has reason to believe that any person is a benamidar in respect of a property, he may after recording reasons in writing, issue a notice to the person to show cause as to why the property should not be treated as benami property. Sub section (3) to section 24 states that the Initiating Officer, who is of the opinion that the person in possession of the property held behami, may alienate the property during the period specified in the notice, may, with the previous approval of the Approving Authority, by order in writing, attach the property provisionally, for a period of 90 days fr....
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....nued till the Final Order under section 26(3) of the Prohibition of Benami Property Transactions Act, 1988 is passed by the Adjudicating Authority. This order is issued with the prior approval of the Approving Authority as per the provisions of section 24(4) of the Prohibition of Benami Property Transactions Act, 1988." 10.Upon considering the rival submissions and the decisions relied on by the parties, the learned Judge has dismissed the writ petition filed by the appellant, along with other connected cases, by the common order dated 25.10.2021 with the following observations: "65.The nature of the transactions in question have to be established by the petitioner before the authorities upon the respondents discharging the initial burden cast upon them to furnish the primary evidences available with them to the effect that the property is benami in nature. This is a rebuttable presumption and the effectiveness of the rebuttal will depend on the evidences furnished by the noticees to the authorities. 66.In my considered view, therefore, the enquiry contemplated at the stage of initial investigation is only preliminary, based upon prima facie reasons an....
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....ver, the mode of payment employed as between the parties and the actual amount transacted are pure questions of fact that are best left for verification and determination by the authorities concerned. This question is also left open for decision in the course of adjudication by the authorities. 76.The challenge to the impugned orders under section 24(4) fails and the respondents are directed to proceed in line with sections 25 and 26 forthwith. All writ petitions are dismissed. ... 77.The respondents will continue with adjudication under section 25 and complete proceedings in light with the mandate of that section. Notices under section 26 of the PBPT Act will be issued within a period of 30 days from date of issue of these orders accompanied with all material that the respondents rely on and proceedings under section 26 shall be conducted scrupulously in line with the mandate thereof. 78.The petitioners shall be affored full opportunity to put forth all contentions before the adjudicating authority who shall take note of the same and pass speaking orders in accordance with law. ..." 11.As already stated, the grievance of the appellant is that the firs....
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....culars or evidence and provide an opportunity of being heard to the appellant only at the stage of adjudication proceedings; and there is no provision under the Act to provide an opportunity to the appellant to cross examine the witnesses at the preliminary stage. In this connection, a reliance was placed on the findings of the first respondent in the order impugned in the writ petition and the same are quoted below for ready reference: "It is to be noted that the Initiating Officer under the Prohibition of Benami Property Transactions Act, 1988, was not conferred upon any such authority to grant an opportunity for cross-examination of any person. Further, the Beneficial Owner seeks cross examiation without mentioning the points on which the cross-examination was to be held, which is beating around the bush. It is placed on record that the entire proceedings have been initiated based on the evidences collected and sufficient opportunities have been given to the Beneficial Owner and Benamidar to offer their objections on those evidences. In addition to the above, the current proceedings under the PBPT Act is time bound one. The peculiar situation is that the Benefi....
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....ILLJ 633 SC where this Court reiterated that "the doctrine of natural justice cannot be imprisoned within the strait-jacket of a rigid formula and its application depends upon the nature of the jurisdiction conferred on the administrative authority, upon the character of the rights of the persons affected, the scheme and policy of the statute and Ors. relevant circumstances disclosed in a particular case". See also in this connection the observations of Hidayatullah, C.J., in the case of Channabasappa Basappa Happali v. State of Mysore. MANU/SC/0476/1970 : [1971] 2 SCR 645 In our opinion, in the background of facts and circumstances of this case, the nature of investigation conducted in which the appellant was associated, there has been no infraction of that principle. In the premises, for the reasons aforesaid, there has been in the facts and circumstances of the case, no infraction of any principle of natural justice by the absence of a formal opportunity of cross-examination Neither cross-examination nor the opportunity to lead evidence by the delinquent is an integral part of all quasi judicial adjudications." (ii) In an order dated 29.11.2010 passed in Special Appeal No.741....
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.... documents, then the principles of natural justice would require in the absence of any statutory provision, that the person whose statement was recorded is made available for cross-examination to test the veracity of the statement. 16.We, therefore, have no hesitation in holding, that there is no requirement in the Act or Rules, nor do the principles of natural justice and fair play require that the witnesses whose statements were recorded and relied upon to issue the show cause notice, are liable to be examined at that stage. If the Revenue choose not to examine any witnesses in adjudication, their statements cannot be considered as evidence. However, if the Revenue choose to rely on the statements, then in that event, the persons whose statements are relied upon have to be made available for cross-examination for the evidence or statement to be considered. 17.We are, therefore, clearly of the opinion that there is no right, procedurally or substantively or in compliance with natural justice and fair play, to make available the witnesses whose statements were recorded for cross examination before the reply to the show cause notice is filed and before adjudication....
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....It was further held that a writ lies only when some right is infringed and a mere show cause notice does not infringe the right of any one and it is only when a final order adversely affecting the party is passed, that the said party can be said to be having any grievance. The Supreme Court held that the writ jurisdiction being discretionary, should not ordinarily be exercised by quashing a show cause notice. (Emphasis supplied) (v) An order dated 03.08.2017 passed by the learned Single Judge of the Madhya Pradesh High Court in WP.No.10280 of 2017 in the case of Kailash Assudani v. CIT, wherein, the challange was to the order passed by the Initiating Officer under section 24(4) of the Prohibition of Benami Property Transaction Act, 1988 and the same was rejected. The relevant portion of the order, reads as follows: "6....In my view, the principles of natural justice are codified in terms of sub section (6) of section 26 of the Act. The impugned order is subject to judicial review before the adjudicating authority. The order passed by the adjudicating authority can be assailed before the appellate tribunal constituted under section 31 of the Act. The order of the appe....