2024 (5) TMI 84

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....(1) of The Prohibition of Benami Property Transactions Act, 1988 (hereafter referred to as 'Benami Transactions Act 1988') and provisional attachment order dated 05.01.2023 issued under Section 24(3) of the Benami Transactions Act, 1988. Petitioner has sought for further reliefs, but, at the very initial stage, learned counsel for the petitioner states that the main challenge is to the aforesaid show cause notice dated 05.01.2023 and the provisional attachment order dated 05.01.2023. In case the relief is granted to the said extent rest of the consequential orders and further actions would by themselves stand non-est and void. 3. By the impugned notice under challenge, the respondents-authorities have proposed to treat the constructions being raised by the petitioner on her Plot No.35 Srijan Vihar Colony, Gomti Nagar, Lucknow, to be a benami transaction, being carried out by the petitioner on behalf of respondent no.5, her son-in-law. The plot in question was purchased by the petitioner by a sale deed dated 23.04.2016. The Benami Transactions Act, 1988 was amended w.e.f. 25.10.2016. The sale deed of the petitioner is admittedly prior to the said amendment. 4. The Supr....

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....ptions, surmises and conjectures and thus is without jurisdiction. On the other hand the department submits that the show cause notice is based upon the sound evidence and concrete findings and the same is a show cause notice to which the petitioner can submit her reply to the department which shall be considered by the department. 6. This writ petition was filed in the year 2023 and on 3.5.2023, the following interim order was granted by this Court. "Order on Memo of Petition Heard. Let the Counsel for the petitioner bring on record the reply filed by her to the impugned show cause notice issued during pendency of the present writ petition. Learned Counsel for the Income Tax Department bring on record statement of then Assessee/witness in response to the summons issued to him on 02.12.2022 under Section 131(1A) of the Income Tax Act, 1961, as referred in the impugned order. As we are seiged with the validity of jurisdictional notice issued under Section 24(1) of The Prohibition of Benami Property Transactions Act, 1988 and the arguments which are on the verge of conclusion, list/put up this matter on 05.05.2023 to be taken up immedia....

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.... 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 providing the consideration is not traceable or is fictitious; Explanation.-For the removal of doubts, it is hereby declared that benami transaction shall not include any transaction involving the allowing of possession of any property to be taken or retained in part performance of a contract referred to in section 53A of the Transfer of Property Act, 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; a....

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....with the prior approval of the Approving Authority, till the passing of the order by the Adjudicating Authority under sub-section (3) of section 26; or (ii) decide not to attach the property as specified in the notice, with the prior approval of the Approving Authority. (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. [Explanation.- For the purposes of this section, 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 referred to in sub-section (4) available to the Initiating Officer for passing order of attachment is less than thirty days, such remaining period shall be deemed to be extended to thirty....

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....5 and even the department has not put a single question to Sri Krishna Kumar Dubey with regard to the basis of his knowledge. In support of his statement Sri Krishna Kumar Dubey has not provided any documentary or other evidence. Similarly, the department has also not referred to any other evidence in the show cause notice to support the said statement. 14. Section 24 (1) of the Benami Transactions Act states that "where the Initiating Officer, on the basis of material in his possession, has reason to believe". Thus, there are two pre-conditions to the issuance of the notice under Section 24(1) of the Benami Transactions Act; (i) The Initiating Officer should have material in his possession and; (ii) the material should be sufficient to cause a reason to believe. It goes without saying that while interpreting a taxing statute, the principle of strict interpretation is to be applied. 15. As per record, in the present case a mere statement of the contractor without any substantial supportive evidence is made the basis of the entire proceedings. Such a mere statement without any supportive evidence cannot under law be held to be a sufficient material in possession of an Initiati....

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....hile defending the impugned notice dated 5.1.2023, as all the said evidences are collected by the department after the notice is issued and cannot be included in the material in possession of the Initiating Officer for forming the reason to believe for issuance of the impugned notice. It is also not disputed by the department that an amount of Rs. 95.00 lakhs is transferred from the Bank account of the petitioner to the account of the construction firm while the construction is underway and thus nearly the entire amount is already spent by the petitioner on constructions from her own account. 20. While interpreting the term "reason to believe" Courts in Calcutta Discount Co. Ltd. Vs. Income Tax Officer & others; (1961) 41 ITR 0191, CST Vs. Bhagwan Industries (Pvt.) Ltd. 1973 (31) STC 293 (Para9,10, &11), Madhya Pradesh Industries Ltd Vs. ITO (1965) 57 ITR 0637 (Paras 3,6), has time and again held that the words "reason to believe" are stronger than the words "is satisfied" or "reason to suspect" and the Constitutional Courts have consistently held that the Officer cannot record his satisfaction for "reason to believe" on an arbitrary or irrational basis. The same has to be recor....

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....r is further required by Section 34 to record his reasons for taking action under Section 34(1)(a) and obtain the sanction of the Central Board of Revenue or the Commissioner, as the case may be." (emphasis added) 23. Thus, in the aforesaid facts & circumstances, this Court has no hesitation in holding that there was no material in possession of the Initiating Officer which could be held to be sufficient for holding a reason to believe that the petitioner is a Benamidar of respondent no.5, her son-in-law, with regard to the constructions in question for initiating proceedings under Section 24(1) of the Benami Transactions Act. 24. As regards, the order of provisional attachment under Section 24(3) of the Benami Transactions Act is concerned, Section 24(3) requires that Initiating Officer is of the opinion that the person in possession of the property held Benami may alienate the property during the period specified in the notice. Without such a satisfaction the property can not be attached by the Initiating Officer. 25. In the present case, no such material has been referred to by the Initiating Officer in the impugned attachment order or placed before this Court which ....

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....€ हैं। इस construction का लगभग 90% से ज्यादा कार्य पूरा हो चुका है। प्रश्न 11 : श्रीमती मीरा पाण्डेय को आप कैसे जानते हैं तथा उनसे आप कितनी बार मिल चुके हैं? उत्तरः मैं श्रीमती मीरा पाण्डेय को प्रत्यक्ष रूप से नहीं जानता हूं तथा मैं उनसे एक बार भी ....

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....ा था। इसके अलावा मेरा एक दूसरा प्रोजेक्ट भी दिलवाया जो की है- Plot No. 98, Srijan Vihar Colony, Gomti Nagar, Lucknow जिसका स्वामित्व Dr. Sambhavi Singh का है। प्रश्न 14: क्या आप श्री इन्द्रमणि त्रिपाठी को जानते हैं? उत्तरः श्रीमान, मेरी जानकारी में श्री इन्द्रमणि त्रिपाठी जी अभी LDA के VC हैं।....

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....¤ यह बातचीत कभी फोन द्वारा या कभी उनके आफिस में खुद जा कर करता था। मेरी उनकी मुलाकात उनके दोनों घरों पर होती थी जिनके पते हैं-3/299, Vishal Khand, Gomti Nagar, Lucknow तथा H.No.57, Srijan Vihar Colony, Gomti Nagar, Lucknow / प्रश्न 16: कृपया बताएं की Plot No. 35, Srijan Vihar Colony, Gomti Nagar, Lucknow पर बनाए जा रहे भवन के निर्माण से सम्बंधित खर्चोà¤....