TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 774
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.... office of the Officer-in-charge, Guwahati, GRPS, Assam Railway Station Guwahati, the Inspector of Police, Officer-in-charge, Guwahati, GRPS, Assam, handed over cash amounting to Rs. 70,00,000/-, which was seized from the possession of Shri Uttam Kumar Saha (herein appellant no.1) on the same day, for the purpose of taking further action as per the provisions of the Income Tax Act, 1961. Statement of Shri Uttam Kumar Saha under section 131 of the Income Tax Act, 1961 was also recorded on 02.01.2018 by the office of the Officer-in-charge, GRPS, Guwahati Railway Station, Guwahati. He has stated that he is a SATSANG devotee and worker, who is authorized to carry cash, and cash amounting to Rs. 70 Lakhs found with him, belongs to SATSANG, which was generated out of donations given by different persons/devotees during Utsav/mela/festival and same was carried by him to headquarter of SATSANG at Deoghar, Jharkhand. However, he was not having authorization letter from SATSANG or any books of accounts, or any other document. It was further noted that seized amount consist of only Rs. 500 and Rs. 2000/- denomination donation, while offering from devotees normally are in very small denomin....
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....d Shri Nishith Ranjan Bhattacharjee on 21.02.2018 by DCIT (Inv.), Unit-2(2), Guwahati, wherein both of them still held that cash belong to SATSANG. In view of above facts, and evidences, the Initiating Officer concluded that it was clear that as per the version given by Shri Uttam Kumar Saha, Shri Narayan Das, & Shri Nishith Ranjan Bhattacharjee, the amount of seized cash of Rs. 70,00,000/- belonged to Satsang, while as per statement of Shri Shekhar Sarkar, accountant of SATSANG, the seized cash of Rs. 70 lakhs did not belong to SATSANG. It is further important to reiterate here that statement of Shri Shekhar Sarkar is also confirmed by SATSANG on their letter head, duly signed by Shri Kartik Chand Sarkar secretary, SATSANG. Thus, it was evident that the entire cash amount of Rs. 70,00,000/- falls under 'benami properties' within the meaning of section 2(9)(C) of the PBPT Act as a benami transaction, if SATSANG is considered owner of property as claimed by Shri Uttam Kumar Saha, Shri Narayan Das, & Shri Nishith Ranjan Bhattacharjee and SATSANG (Trust) had denied the ownership. The transaction also fell within meaning of section 2(9)(D) of the PBPT Act. As the claim of Sh....
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....h stated that they were not aware of the owner of such cash and were not aware whether the amount belonged to Shri Uttam Kumar Saha, SATSANG or any other person. From the replies received, it is seen that only SATSANG has maintained a uniform stand that the cash amount did not belong to the society. Shri Uttam Kumar Saha, Shri Narayan Das and Shri Nishith Ranjan Bhattacharjee have deviated completely from their earlier stand. Shri Uttam Kumar Saha is now stating that the said amount belonged to him, while Shri Narayan Das and Shri Nishith Ranjan Bhattacharjee are now stating that they are not aware of the owner of the said amount. The replies given by Shri Uttam Kumar Saha, Shri Narayan Das and Shri Nishith Ranjan Bhattacharjee are not tenable in view of the facts as detailed below: i) The statements of all three individuals were recorded after showing them the text of Sections 181 & 177 of the Indian Penal Code, 1860 and they all confirmed having seen and understood the above provisions and reiterated that their statements were truthful. ii) The statements of Shri Uttam Kumar Saha & Shri Nishith Ranjan Bhattacharjee were recorded again on 21-02-2018 by the ....
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.... b) whether he was intending to do business or religious activity with the said cash. This is quite absurd. v) It is also mysterious how Shri Nishith Ranjan Bhattacharjee and Shri Narayan Das could be so readily "steered" by Shri Uttam Kumar Saha as had been stated by Shri Uttam Kumar Saha in his reply dated 29.04.18 at the time of cash seizure when the matter involved was a serious one and their own reputation and the reputation of SATSANG could be at stake. They had nothing to gain by corroborating the statement of Shri Uttam Kumar Saha. From the facts stated above and the various documents submitted by Shri Uttam Kumar Saha and Shri Nishith Ranjan Bhattacharjee on 21.02.2018 before the Deputy Director of Income Tax (Inv.), Unit 2(2), Guwahati, it is clear that they had tried their best to establish that the amount in fact belonged to SATSANG. There was a sufficient time gap between the first and second statements of Shri Uttam Kumar Saha and Shri Nishith Ranjan Bhattacharjee. Both individuals had enough time to think about the statement given earlier and to consider correcting any erroneous fact stated earlier, in their next statement. They were certai....
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....e above facts, it is clear that no credence can be given to the altered stand of Shri Uttam Kumar Saha, who is now claiming ownership of the said amount of Rs. 70 Lakhs merely to avoid any proceedings under the Prohibition of Benami Property Transactions Act, 1988. Thus, it is evident that the entire cash amount of Rs. 70,00,000/- falls under 'benami properties' within the meaning of section 2(9)(C) of the Prohibition of Benami Property Transaction Act, 1988, which defines "a transaction or an arrangement in respect of a property where the owner of property is not aware of, or, denies knowledge of, such ownership" as a benami transaction, if SATSANG is considered owner of property, as had been claimed earlier by Shri Uttam Kumar Saha, Shri Narayan Das and Shri Nishith Ranjan Bhattacharjee and SATSANG (Trust) had denied the ownership. The transaction also falls within meaning of section 2(9)(D) of the Prohibition of Benami property Transaction Act, 1988 which defines "a transaction or an arrangement in respect of a property where the person providing the consideration is not traceable or is fictitious", as benami transaction. The earlier claim of Uttam Kumar Saha, Shri Naray....
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.... and even otherwise, Ld. Counsel for the deceased appellant no.2 pointed out that property of the appellant no.2 is not attached by the Department and share in Rs. 70 Lacs is not claimed by the LRs. Accordingly, proceedings qua appellant no. 2 stand abated vide order dated 11.08.2025. 3. During the arguments, Ld. Counsel for the appellants submitted that there is nothing on record to show that the seized and attached cash of Rs. 70,00,000/- is benami property, as appellant has specifically claimed the ownership of the said amount. He stressed that Section 29 Clause (C) or Clause (D) are not attracted in any manner. In fact, the entire proceedings are illegal because these two sections are simultaneously invoked, thereby making the SCN u/s 24 vague, as it does not specify the specific charge under which the impugned property is alleged to be benami and alleged to be held by four benamidars. He stated that initiating officer has initiated the proceedings under Section 24 of PBPT Act, 1988 without mandatory statutory approval in terms of Section 23 of the PBPT Act, 1988 and therefore, the entire proceedings initiated under Section 24 of the PBPT Act, 1988 are illegal and without....
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....as the owner of the seized cash? iv) Whether the provisions of PBPT Act are not attracted, seeing the fact that no independent investigation was carried out by the authority under PBPT Act? v) Whether the mandatory statutory approval of the authority u/s 23 of the PBPT Act is compulsory to initiate proceedings u/s 24 of the PBPT Act? vi) Whether it is mandatory on the part of the IO to supply the reasons to believe before issuing the Show Cause Notice u/s 24 (1) of the Act? If yes, whether failure to do so vitiates the entire proceedings? Issue No. 1: Whether cash is not property? 6. Coming to issue no i), we are of the view that property means any movable or immovable asset. The properties can also be divided as corporeal and incorporeal/ tangible or intangible. Cash (physical currency) is often considered as tangible movable property due to its physical nature. Bank deposits, electronic funds, investments or crypto-currencies are covered in the category of intangible property, because they represent value without physical form. In financial accounting, an asset is any resource owned or controlled by a business, or an economic entity. It is anythin....
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....and the said cash was not recovered and seized from them by the authorities, but from the appellant no.1 and they were merely accompanying him. Hence, they cannot be proceeded against as the benamidars, or as the beneficial owner, per the provisions of the PBPT. This issue is thereby decided in favour of the Appellants 2& 3 and against the Respondent. Issue No. 3: Whether Section 2(9)(C) and 2(9)(D) cannot be invoked in the present case, since the appellant no.1 has declared himself as the owner of the seized cash? 8. Initially, at the time of seizure, all the three appellants have taken the plea that the seized amount belongs to donation of SATSANG. To prove the stance, they even presented many documents to substantiate that the money belonged to SATSANG. However, there was no authorization letter or books of any account or any other document with the appellant no.1, issued from SATSANG, to prove his stance that the cash amounting to Rs. 70 Lakhs found with him belonged to SATSANG. In fact, as per the statement of Shri Shekhar Sarkar, the accountant of the SATSANG, it is evident that the seized cash did not belong to SATSANG and he did not even know the appellants, instead h....
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....aha, Shri Narayan Das and Shri Nishith Ranjan Bhattacharjee are vague, without any logic and given with the only objective of avoiding proceedings under the Prohibition of Benami Property Transactions Act, 1988. Thus, the entire cash amount of Rs. 70 lakhs fall within the definition of 'benami property', which defines "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" as a benami transaction, if SATSANG is considered the owner of property as had been claimed earlier by Shri Uttam Kumar Saha, Shri Naryan Das and Shri Nishith Ranjan Bhattacharjee and SATSANG had denied the ownership of the same. Thus, we are of the view that appellant no.1 is rightly proceeded against as a benamidar under section 2(9)(C) and 2(9)(D) of the PBPT and there is no illegality by attracting both the provisions, being equally applicable. Hence, this issue is decided against the appellant no.1 and in favour of the respondent. Issue No. 5: Whether the mandatory statutory approval of the authority u/s 23 of the PBPT Act is compulsory to initiate proceedings u/s 24 of the PBPT Act? 9. Coming to the issue....