2023 (9) TMI 200 - HC - Benami Property

Benami transaction - Prosecuting the petitioner u/s 55 of the Prohibition of Benami Property Transaction Act, 1988 - petitioner was standing in front of a certain lodge with a black bag in his hand, he was intercepted by the Inspector of Police, and he searched the bag and found cash worth Rs. 34,60,000/- inside it - petitioner under Section 131(1A) of the Income Tax Act, the Deputy Commissioner of Income Tax, the second respondent in this case, referred the matter to Benami Prohibition Wing of the Income Tax Department - HELD THAT - Today the petitioner has made conflicting statement regarding the ownership of the property. First he made a statement that it belonged to Sultan Foumi, later he changes his statement and states that it is his own money. Now it is this inconsistency that has prompted the authority to grant sanction under Section 55 of the Act for prosecuting the petitioner. After weighing the rival submissions, this Court considers that it is too premature stage for this Court to interfere with the decision of the first respondent to accord sanction for prosecution under Section 55 of the Act. So far as certain contradictory statements alleged to have been made by the petitioner is concerned, its merits can be decided only post prosecution. The fact of the matter is that, here is the petitioner who is found to possess unexplained cash which he tries to explain through conflicting versions. Whether a person Sultan Foumi exists itself now comes under the scanner, since the response of the petitioner to the notice under Sec.24(1) of the Act seems to suggest something different. Could Sultan Foumi be a fictitious character? It is for the petitioner to explain. The stage is too pre-mature for this Court go by the version of the petitioner. Consequently, this Court does not consider there is merit in this writ petition, and hence dismissed

Summary

Issues: Challenge to sanction for prosecution under Section 55 of the Prohibition of Benami Property Transaction Act, 1988.

Facts Leading to Petition:
- Petitioner intercepted with cash, claimed bag belonged to employer Sultan Foumi.
- Petitioner native of Ramanathapuram, employed by Sultan Foumi in Chennai.
- Petitioner declared benamidar without evidence, claims no ownership of seized cash.
- First respondent granted sanction without proper consideration, petitioner filed writ of certiorari.

Petitioner's Argument:
- Recorded statement under Income Tax Act states money belonged to employer.
- Petitioner unable to bring employer, provided contact details, employer not found.
- First respondent failed to consider petitioner's statements, granted sanction hastily.

Respondents' Argument:
- Property deemed benami, show cause notice issued, property provisionally attached.
- Petitioner's conflicting statements about ownership of cash led to sanction for prosecution.
- Statutory definitions of benami transactions applied to petitioner's case.

Judgment:
- Court finds premature to interfere with sanction for prosecution.
- Contradictory statements by petitioner to be addressed during prosecution.
- Existence of employer Sultan Foumi questioned, petitioner's explanations deemed inconsistent.
- Petitioner required to explain inconsistencies during further proceedings.
- Writ petition dismissed, no costs awarded, miscellaneous petition closed.