2024 (11) TMI 623 - AT - Benami Property

Prohibition of Benami Properties Transaction - attachment order - applicability of the amended provisions of the Act of 1988 by the Amending Act of 2016 - as argued property purchased by the appellant was not out of the benami transaction and otherwise the purchase of the property was much prior to the amendment in the Act of 1988 by the Amending Act of 2016 with effect from 01.11.2016. HELD THAT - The facts on record shows attachment of one agricultural land having area of 0.610 hectare of khasra number 526/3 in village Girdava of Saharanpur, UP. said to have been effected by the benami transaction. It is not in dispute that the I.O. could not identify the beneficial owner and therefore the order has been passed against the benamidar. Adjudicating Authority has taken note of the fact that the transaction in question is prior to the amendment by the Amending Act, 2016 but finding has been recorded adverse to the appellant by treating amending provision to have retrospective application. Though, now the position is clear in the light of the judgement of Union of India Anr. Versus M/s. Ganpati Dealcom Pvt. Ltd. 2022 (8) TMI 1047 - SUPREME COURT that it has prospective application. Therefore, we need not to refer detailed facts of the case regarding the purchase of the property and source disclosed by the appellant being a transaction prior to 01.11.2016 and is not falling u/s 2 (9A) of the amended provision. We find that the impugned order has been passed while considering the facts of the case but treating it to be a case u/s 2 (9) (A) of the Amending Act though the person alleged to have provided the consideration for purchase of the property is not known. Adjudicating Authority in the discussion part recorded that transaction fall under section 2 (9) (A) in ignorance of the fact that beneficial owner has not been identified. In fact, it was through out considered to be a case falling u/s 2 (9B) of the Act of 1988 as amended by the Amending Act of 2016. The conclusions have not been specifically drawn in reference to section 2 (9 )(A) but it has been referred in discussion part. Amended provisions would not apply retrospectively rather it would have prospective application and thereby the transfer prior to 01.11.2016 not falling in the definition of the benami transaction under the section 2 (9) (A) of the Amending Act, 2016 would be squarely covered by the judgement of Union of India Anr. Versus M/s. Ganpati Dealcom Pvt. Ltd. . The exception may be if a case is falling under section 2 (9) (A) of the amended definition of benami transaction for which a detailed judgement has been given by the Tribunal in the case of M/s. Prism Scan Express Pvt. Ltd. 2024 (1) TMI 203 - APPELLATE TRIBUNAL FOR SAFEMA AT NEW DELHI .

Summary

Issues Involved:

1. Whether the attachment of the property under the Prohibition of Benami Properties Transaction Act, 1988 was justified.
2. The applicability of the amended provisions of the Act of 1988 by the Amending Act of 2016.
3. Identification of the beneficial owner of the property.
4. The retrospective application of the amended provisions.

Detailed Analysis:

1. Justification of Property Attachment:

The appellant challenged the order confirming the attachment of an agricultural land, arguing that the property was not acquired through a benami transaction. The appellant emphasized that the purchase was made prior to the amendment of the Act in 2016, and the sale consideration was duly paid and registered. The respondent's inability to identify the beneficial owner was highlighted, suggesting that the attachment was based on erroneous presumptions of facts and law.

2. Applicability of Amended Provisions:

The appellant contended that the transaction occurred before the amendment of the Act effective from 01.11.2016, which was protected by the Supreme Court's judgment in "Union of India & Anr. Versus M/s. Ganpati Dealcom Pvt. Ltd." The Tribunal noted that the Adjudicating Authority erroneously applied the amended provisions retrospectively, despite the Supreme Court's clarification that the 2016 amendments have prospective application only.

3. Identification of the Beneficial Owner:

The Tribunal observed that the Investigating Officer (I.O.) failed to identify the beneficial owner of the property, a fact acknowledged in the impugned order. The appellant provided a breakdown of the funds used for the purchase, asserting that sufficient resources were available from legitimate sources, thus challenging the classification of the transaction as benami.

4. Retrospective Application of Amended Provisions:

The Tribunal referred to the Supreme Court's judgment, which declared that the amended provisions of the Act could not be applied retroactively. The judgment emphasized that transactions prior to the amendment date are not subject to the new definitions of benami transactions under section 2 (9) (A) of the amended Act. Consequently, the impugned order was found unsustainable as it applied the amendments retrospectively.

Conclusion:

The Tribunal set aside the impugned order, allowing the appeal. It reiterated that the amended provisions of the Act of 1988, post-2016, have prospective application, and transactions prior to the amendment are not covered under the new definitions. The Tribunal granted liberty to the respondent to seek a review of the order if the pending Review Application before the Supreme Court results in a modification of the judgment.