TaxTMI 
TaxTMI 
2023 (12) TMI 621
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....ed under the provisions of Companies Act, 1956, whereas the petitioner No.2 is the Director of the petitioner No.1-company. 3. Notices under Section 19 of the Prohibition of Benami Property Transaction Act, 1988 (hereinafter referred to as 'the PBPT Act') was issued to the petitioners by the Initiating Officer and responses to the same were filed. Thereafter show cause notice under Section 24(1) and (2) of the PBPT Act was issued to the petitioners by the respondents on 28.04.2023. On 01.05.2023, order for provisional attachment of the property was issued under Section 24(3) of the PBPT Act. On 28.07.2023, the respondents issued order for provisional attachment of the property under Section 24(4)(a)(i) of the PBPT Act till the passing of the order passed by the Adjudicating Authority under Section 26(3) of the PBPT Act. Vide order dated 07.08.2023 (Annexure- 14), the Initiating Authority made a reference to the Adjudicating Authority. 4. Under the above referred circumstances, the petitioners filed this writ petition seeking following reliefs: "It is, therefore, most humbly prayed that this Hon'ble Court may kindly be pleased to:- a. Issue writ in the nature....
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....contain computer generated Document Identification Number (DIN), however, in the present case, the two impugned orders passed by the Initiating Officer on 28.07.2023 under Section 24(4) of PBPT Act do not contain different DIN. 8. Learned counsel for the petitioners have further submitted that as per Section 24(4) of the PBPT Act, the Initiating Officer is required to issue the confirmation of provisional attachment order within a period of 90 days from the last date of the month in which the show cause notice is issued. As per the same, the Initiating Officer was supposed to pass the order under Section 24(4) of the PBPT Act till 29.07.2023, however, the Initiating Officer issued and uploaded two pages incomplete order dated 28.07.2023 on the portal of the petitioner No.1 and thereafter on 29.07.2023 issued the complete order under Section 24(4) of the PBPT Act, which was received by the petitioners only on 31.07.2023. It is further submitted that from the above, it is clear that the order under Section 24(4) of the PBPT Act is barred by limitation. 9. Learned counsel for the petitioners have further submitted that despite repeated requests by the petitioners, no material ha....
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....n Building Pvt. Ltd. through its Director and Ors. vs. The Initiating Officer and Anr. It is also argued that no proper opportunity of hearing was provided by the respondents and the reply filed on behalf of the petitioners to various show cause notices has not been taken into consideration in entirety. 13. It is also submitted that the written submissions filed by the petitioners in respect of the judgment passed by this Court in M/s Shri Kalyan Building Pvt. Ltd. (supra) were not even taken into consideration. Learned counsel for the petitioners have, therefore, argued that the provisional attachment order as well as the order passed by the respondents under Section 24(4) of the PBPT Act and reference made by the respondents under Section 24(5) of the PBPT Act may kindly be quashed and set aside. 14. Reply to the writ petition is filed on behalf of the respondents and relying on the same, learned counsel for the respondents has argued that there is no illegality in passing the impugned orders as the same are passed after following due procedure laid down under the law, hence, no interference is called for. 15. Heard learned counsel for the parties. 16. For the conveni....
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....formance of a contract referred to in section 53A of the Transfer of Property Act, 1882 (4 of 1882), if, under any law for the time being in force,- (i) consideration for such property has been provided by the person to whom possession of property has been allowed but the person who has granted possession thereof continues to hold ownership of such property; (ii) stamp duty on such transaction or arrangement has been paid; and (iii) the contract has been registered. 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. (3) Where the Initiating Officer ....
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....tended 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 subclause (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. 26. Adjudication of benami property.-(1) On receipt of a reference under sub-section (5) of section 24, the Adjudicating Authority shall issue notice, to furnish such documents, particulars or evidence as is considered necessary on a date to be specified therein, on the following persons, namely:- (a) the person specified as a benamidar therein; (b) any person referred to as the beneficial owner therein or identified as such; (c) any interested party, including a banking company; (d) any person who has made a claim in respect of the property: Provided that the Adjudicating Authority shall issue notice within a period of thirty days from the date on which a reference has been received: Prov....
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....-section (3) shall be passed after the expiry of one year from the end of the month in which the reference under sub-section (5) of section 24 was received. [Explanation.-For the purposes of this subsection, in computing the period of limitation, the period during which the proceeding is stayed by an order or injunction of any court shall be excluded: Provided that where immediately after the exclusion of the aforesaid period, the period of limitation available to the Adjudicating Authority for passing order is less than sixty days, such remaining period shall be deemed to be extended to sixty days.] [Provided that where the time limit for passing order under this sub-section expires during the period beginning from the 1st day of July, 2021 and ending on the 29th day of September, 2021, the time limit for passing such order shall be extended to the 30th day of September, 2021.] (8) The benamidar or any other person who claims to be the owner of the property may either appear in person or take the assistance of an authorised representative of his choice to present his case. Explanation.-For the purposes of sub-section (8), authorised rep....
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....ng paras, the undersigned as Initiating Officer has reasons to believe that :- 1. The transactions carried out by Sh. Mahaveer Lunia in the form of making payments to the seller(s) which was routed through Sh. Anil Sanklecha, CA as discussed above for making purchase of the said lands/immovable properties in your name as mentioned in the Annexure-A are "Benami Transactions" within the meaning of Section 2(9)(A) of the PBPT Act; 2. The said lands/immovable properties are "Benami Property" within the meaning of Section 2(8) of the PBPT Act; 3. In terms of the provisions Section 2(10) of the PBPT Act, you are the "Benamidar" of these benami properties; and 4. In terms of the provisions Section 2(12) of the PBPT Act, Sh. Mahaveer Lunia is the "Beneficial Owner" of these benami properties mentioned in the Annexure-A." . In such circumstances, we do not find any merit in the above argument of the learned counsel for the petitioners. 19. The other contention of the petitioner that the order under Section 24(4) of the PBPT Act has been passed by the Initiating Officer beyond the period of limitation is also without any merit because from the bare l....
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....operties are purchased in its name not from company's funds or its capital but from the funds made available by the petitioner No.2 from the income earned through other businesses. 25. The Initiating Officer, after taking into consideration the material available with it and the response filed on behalf of the petitioners, recorded its prima facie opinion in the order dated 28.07.2023 passed under Section 24(3) of PBPT Act. The relevant portion of the order dated 28.07.2023 is reproduced as under: "16. From the discussion made in the aforementioned paragraphs, it is clearly established that:- i. The Benamidar company was previously controlled and owned by entry operators of Kolkata and Mumbai. The company is a shell company/paper company which has been used for providing accommodation/bogus entries in lieu of cash payment. ii. The company was not having real worth as well as creditworthiness to purchase the said lands/immovable properties by way of of making such investment on its own. iii. There is no significant changes in financial position/status of the company before and after acquisition of the company by the Lunia family. iv. S....
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.... in providing bogus entries. Thus, the company was not having capacity/creditworthiness to purchase the said lands/ immovable properties for making payment of such a huge amount. 3. The property is held for the immediate or future benefit, direct or indirect, of the person who has provided the consideration From the discussions made by the foregoing paras it is clear that M/s Alishan Complex Pvt. Ltd. is/was holding the said lands/immovable properties for immediate/future benefit of Sh. Mahaveer Lunia. 19. Further, the Hon'ble Supreme Court has concluded after considering its earlier judgment in the case of Valliammal vs. Subramaniam (2004) 7 SSC 233 that while considering whether a particular transaction is benami in nature, the six circumstances can be taken as a guide. These six circumstances are discussed below to show that how these are fulfilled in the instant case:- S.No. Circumstances Applicability in the instant case 1. The sources from which the purchase money came. As discussed in aforesaid paras and material available on records, it is evident that the entire consideration for purchase of the said lands/immovable properties in the....
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.... parties concerned in dealing with the property after the sale. As discussed in aforesaid paras and material available on records, it is evident that after purchasing the said lands/immovable properties in the name of M/s Alishan Alishan Complex Pvt. Ltd., Shri Mahaveer Lunia is having full possession over the said lands/immovable properties for his immediate/future benefits. CONCLUSION : 20. In view of the above facts, evidences on record and above reasons to believe, as discussed in detail in the foregoing paras, I am of the considered view that the said lands/ immovable properties mentioned in Annexure-A purchased in the name of M/s Alishan Complex Pvt. Ltd., are "Benami Property" within the meaning of Section 2(8) of the PBPT Act, 1988 ; 20.1 The transactions carried out by Sh. Mahaveer Lunia S/o Sh. Jawari Lal Lunia (PAN : AAWPL0148A) in the form of providing consideration which was routed by Sh. Anil Sankhlecha, CA to the sellers for making purchases of the said lands/immovable properties in the name of M/s Alishan Complex Pvt. Ltd. are "Benami Transaction" within the meaning of Section 2(9)(A) of the PBPT Act, 1988. 20.2 M/s Alishan Com....
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....e said provisional attachment needs to be confirmed by the "adjudicating authority" u/S. 26 of the said Act. In WP No. 10280/2017 (Kailash Asudani Vs. Commissioner of Income Tax) the petitioner assailed the provisional attachment order on the ground that the property in question was not a benami property and without proper application of mind and in absence of adequate material, the order of provisional attachment was passed. This Court declined interference by holding that:- "The order impugned is provisional/tentative in nature. It is subject to judicial review by adjudicating authority. If order of adjudicating authority goes against the petitioner, the further forums of judicial review of said order is available to the petitioner before the appellate tribunal and then before this Court. Hence, against the tentative/provisional order, no interference is warranted by this court at this stage. As per the scheme of the Act, the petitioner can raise all possible grounds before the adjudicating authority. The adjudicating authority is best suited and statutorily obliged to consider all relevant aspects. Thus, at this stage no case is made out for interference." (Emphasis sup....