2022 (10) TMI 1222 - AT - Benami Property

Benami transaction - Beneficial owner of property - Provisional attachment order - scope of Amendment Act of 2016 - Amendment to Prohibition of Benami Property Transactions Act, 1988 as amended by the Benami Transactions (Prohibition) Amendment Act, 2016 - HELD THAT - The issue raised in these petitions is squarely covered by the judgment of this Court in Union of India Anr. vs. Ganpati Dealcom Pvt. Ltd. 2022 (8) TMI 1047 - SUPREME COURT as held Section 2 (9) (A) and Section 2 (9) (C) are substantive provisions creating the offence of benami transaction. These two provisions are significantly and substantially wider than the definition of benami transaction under Section 2 (a) of the unamended 1988 Act. Therefore, Section 2 (9) (A) and Section 2 (9) (C) can only have effect prospectively. Central Government has notified the date of coming into force of the Amendment Act of 2016 as 01.11.2016. Therefore, these two provisions cannot be applied to a transaction which took place prior to 01.11.2016. As petitioners contends that review of the said judgment is pending. Since as of now the issue stands covered by the judgment in the case of Ganpati Dealcom Pvt. Ltd.(supra), we dismiss these special leave petitions for the same reasons and ground.

Summary

Issues:
1. Appeal filed under Section 46 of Prohibition of Benami Property Transactions Act against an order dated 13.08.2019.
2. Application seeking relief based on the judgment of the Hon'ble Supreme Court in a specific case.
3. Applicability of the 2016 Amendment Act to transactions prior to 25.10.2016.
4. Alleged benami transactions and ownership of properties.

Analysis:

1. The appeal was filed against an order passed by the Adjudicating Authority under the Prohibition of Benami Property Transactions Act, 1988. The appellant sought to quash the Impugned Order dated 13.08.2019 and the Provisional Attachment Order dated 23.07.2018. The appellant contended that the transactions in question occurred before the enforcement of the 2016 Amendment Act, and therefore, the Act cannot be applied retrospectively.

2. The respondent, in response, presented evidence from a search and seizure operation under the Income Tax Act, indicating benami property acquisitions by certain individuals. The respondent argued that the properties were purchased in the names of benamidars, with the beneficial ownership belonging to a specific group. The respondent also highlighted the lack of documentary evidence for the source of funds used in these transactions.

3. The key issue revolved around the retrospective application of the 2016 Amendment Act to transactions predating its enforcement. The appellant relied on a judgment of the Hon'ble Supreme Court, which declared certain provisions of the Act unconstitutional and emphasized that the Act cannot be applied retrospectively to transactions before 25.10.2016.

4. After considering the submissions from both parties and reviewing the facts of the case, the Appellate Tribunal concluded that the alleged benami transactions took place before the enforcement of the 2016 Amendment Act. Citing the relevant judgment, the Tribunal held that the Act cannot be applied retrospectively to these transactions. Consequently, the appeal was allowed, and the properties were released from attachment. The respondent was granted the liberty to pursue legal recourse in case of any change in the legal position.

This comprehensive analysis of the judgment highlights the legal arguments, evidence presented, and the ultimate decision of the Appellate Tribunal regarding the retrospective application of the Prohibition of Benami Property Transactions Act.