Alishan Complex Private Limited and Mr. Mukesh Kumar Lunia and Mahaveer Lunia V. Assistant Commissioner Of Income Tax, (Benami Prohibition)

CW/16732/2023

AI Insights

The case involves multiple writ petitions filed by Alishan Complex Private Limited and its directors against the Assistant Commissioner of Income Tax, challenging the provisional attachment of properties under the Prohibition of Benami Property Transactions Act, 1988. The petitioners argued that the attachment orders were issued without proper adherence to the principles of natural justice, lacked sufficient reasoning, and were barred by limitation. The court examined the procedural compliance and substantive merits of the attachment orders, ultimately finding them valid and dismissing the petitions.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 796217 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 12-12-2023
• Assessment Year: misc
• Other Referred Cases: M/s Shri Kalyan Building Pvt. Ltd. through its Director and Ors. vs. The Initiating Officer and Anr., Dinesh Chand Surana Vs. Deputy Commissioner of Income Tax (Benami Prohibition) Chennai & Ors., Abhay Nigam & Ors. vs. Union of India & Ors., Simmant Kohli Vs. Union of India & Ors.
• Laws Referred To: Prohibition of Benami Property Transaction Act, 1988
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: K K BISSA; HARGOVIND CHANDA
• Assessee Lawyers: SANJAY JHANWAR; SANJAY NAHAR; RAJAT SHARMA; ARYAN CHOUHAN; PUSHKAR TAIMINI
• Keywords: Adjudicating authority; Benami transaction; Natural Justice; Provisional attachment; Show cause notice; Initiating Officer
• Section: 19; 24(1); 24(2); 24(3); 26(3); 24(4)(a)(i)

Judgement Text

"[2023:RJ-JD:41294-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Civil Writ Petition No. 16732/2023 1. Alishan Complex Private Limited, Through Its Director Mr. Mukesh Kumar Lunia S/o Jawari Lal Lunia Aged About 46 Years Residing At Moksh Main Mandor Road Opposite Hotel Mapple Abhay Paota, Jodhpur. 2. Mahaveer Lunia S/o Jawari Lal Lunia, Aged About 51 Years, R/o At Moksh Main Mandor Road Opposite Hotel Mapple Abhay Paota, Jodhpur. ----Petitioners Versus Assistant Commissioner Of Income Tax, (Benami Prohibition) And Initating Officer Under The Pbpt Act For The State Of Rajasthan, Jaipur Room No. Na 103, New Central Revenue Building, Bhagwan Das Road, Jaipur Rajasthan, 302005. ----Respondent Connected With D.B. Civil Writ Petition No. 14527/2023 1. Swagatama Enclave Private Limited, Through Its Director Mr. Jawari Lal Lunia S/o Mr. Ghewar Lal Lunia Aged About 75 Years, Residing At Moksh Main Mandor Road Opposite Hotel Mapple Abhay Paota, Jodhpur 2. Mahaveer Lunia S/o Jawari Lal Lunia, Aged About 51 Years, Residing At Moksh Main Mandor Road Opposite Hotel Mapple Abhay Paota, Jodhpur ----Petitioners Versus Assistant Commissioner Of Income Tax, (Benami Prohibition), And Initiating Officer Under The Pbpt Act For The State Of Rajasthan, Jaipur, Room No. Na 103, New Central Revenue Building, Bhagwan Dass Road, Jaipur Rajasthan, 302005. ----Respondent D.B. Civil Writ Petition No. 15074/2023 1. Principle Dealer Pvt. Ltd. through its Director Mr Jawari Lal Lunia S/o Mr Ghewar Lunia aged about 75 years, residing at Moksh Main Mandor Road Opp. Hotel, Mapple [2023:RJ-JD:41294-DB] (2 of 23) [CW-16732/2023] Abhay Paota, Jaodhpur 2. Mahaveer Lunia S/o Jawari Lal Lunia, Aged About 51 Years, Residing At Moksh Main Mandor Road Opposite Hotel Mapple Abhay Paota, Jodhpur ----Petitioners Versus Assistant Commissioner Of Income Tax, (Benami Prohibition), And Initiating Officer Under The Pbpt Act For The State Of Rajasthan, Jaipur, Room No. Na 103, New Central Revenue Building, Bhagwan Dass Road, Jaipur Rajasthan, 302005. ----Respondent For Petitioner(s) : Mr Sanjay Jhanwar, Sr. Advocate assisted by Mr Sanjay Nahar Mr Rajat Sharma (through VC) Mr Aryan Singh Chouhan Mr Pushkar Taimini For Respondent(s) : Mr K.K.Bissa Mr Har Govind Chanda HON'BLE MR. JUSTICE VIJAY BISHNOI HON'BLE MR. JUSTICE YOGENDRA KUMAR PUROHIT Judgment 12/12/2023 (PER HON’BLE VIJAY BISHNOI,J.) 1. Facts of all these cases are identical and common question of law is involved in these writ petitions, therefore, they are decided together. For the sake of convenience, the facts of D.B.Civil Writ Petition No.16732/2023 are taken into consideration for adjudication of these writ petitions. 2. The petitioner No.1 is a private limited company incorporated under the provisions of Companies Act, 1956, whereas the petitioner No.2 is the Director of the petitioner No.1-company. 3. Notices under Section 19 of the Prohibition of Benami Property Transaction Act, 1988 (hereinafter referred to as ‘the [2023:RJ-JD:41294-DB] (3 of 23) [CW-16732/2023] PBPT Act’) was issued to the petitioners by the Initiating Officer and responses to the same were filed. Thereafter show cause notice under Section 24(1) and (2) of the PBPT Act was issued to the petitioners by the respondents on 28.04.2023. On 01.05.2023, order for provisional attachment of the property was issued under Section 24(3) of the PBPT Act. On 28.07.2023, the respondents issued order for provisional attachment of the property under Section 24(4)(a)(i) of the PBPT Act till the passing of the order passed by the Adjudicating Authority under Section 26(3) of the PBPT Act. Vide order dated 07.08.2023 (Annexure- 14), the Initiating Authority made a reference to the Adjudicating Authority. 4. Under the above referred circumstances, the petitioners filed this writ petition seeking following reliefs: “It is, therefore, most humbly prayed that this Hon’ble Court may kindly be pleased to:- a. Issue writ in the nature of certiorari or any other appropriate writ/order/direction quashing/nullifying the Respondent’s Impugned Provisional Attachment Order dated 01.05.2023 and all consequential orders/references thereto; b. Issue writ in the nature of certiorari or any other appropriate writ/order/direction quashing/nullifying the Respondent’s Impugned Attachment Order dated 28.07.2023 and reference letter dated 07.08.2023 and all consequential orders/notices issued by the Respondent; c. Issue writ in the nature of certiorari or any other appropriate writ/order/direction quashing/nullifying the proceedings initiated [2023:RJ-JD:41294-DB] (4 of 23) [CW-16732/2023] against the Petitioner No.1 including the Impugned Attachment Order and consequent proceedings thereto; d. Grant any other relief as deemed to be fit and proper under the facts and circumstances of the case.” 5. Assailing the validity of the impugned orders, learned counsel for the petitioners have argued that the show cause notice under Section 24(1) and (2) of the PBPT Act was issued to the petitioners on 28.04.2023 asking them to submit their response to the show cause notice up to 15.05.2023, however, without waiting for the reply of the petitioners, the provisional attachment order under Section 24(3) of the PBPT Act was issued on 01.05.2023. It is submitted that the said action of the respondents is violative of principles of natural justice and, therefore, the provisional attachment order is liable to be quashed and set aside. 6. Learned counsel for the petitioners have further submitted that as per Section 24(1) and (2) of the PBPT Act, if the Initiating Officer, on the basis of material in his possession, has reason to believe that a person is a Benamidar and other person is beneficial owner in respect of the property, then only he may, after recording reasons in writing, issue a show cause notice to such persons. In the present case, the Initiating Officer has failed to record any reasons for initiating the impugned proceedings against the petitioners and the said action of the Initiating Officer is, therefore, violative of the provisions of the PBPT Act as well as the violative of principles of natural justice. [2023:RJ-JD:41294-DB] (5 of 23) [CW-16732/2023] 7. Learned counsel for the petitioners have further submitted that as per the circular dated 14.08.2019 issued by the Central Board of Direct Taxes, every communication issued by any Income Tax Authority should contain computer generated Document Identification Number (DIN), however, in the present case, the two impugned orders passed by the Initiating Officer on 28.07.2023 under Section 24(4) of PBPT Act do not contain different DIN. 8. Learned counsel for the petitioners have further submitted that as per Section 24(4) of the PBPT Act, the Initiating Officer is required to issue the confirmation of provisional attachment order within a period of 90 days from the last date of the month in which the show cause notice is issued. As per the same, the Initiating Officer was supposed to pass the order under Section 24(4) of the PBPT Act till 29.07.2023, however, the Initiating Officer issued and uploaded two pages incomplete order dated 28.07.2023 on the portal of the petitioner No.1 and thereafter on 29.07.2023 issued the complete order under Section 24(4) of the PBPT Act, which was received by the petitioners only on 31.07.2023. It is further submitted that from the above, it is clear that the order under Section 24(4) of the PBPT Act is barred by limitation. 9. Learned counsel for the petitioners have further submitted that despite repeated requests by the petitioners, no material has been supplied to them and no opportunity of personal hearing was provided before passing of the order under Section 24(4) of the PBPT Act. [2023:RJ-JD:41294-DB] (6 of 23) [CW-16732/2023] 10. Learned counsel referring to the provisions of Section 2(9) (ii) of the PBPT Act, have argued that merely for the reason that the shareholders provide funds to the company for purchasing any property, it cannot be treated as Benami. It is further argued that the company owns such properties, which has been purchased through funds provided by its shareholders but the said property cannot be termed as a property of the shareholders and directors of the company, though the shareholders or directors received benefits of owing the shares are the ultimate beneficiaries of the income from such property. It is submitted that if undisclosed income of a person has been brought to tax, the provisions of the income tax law are invoked. However, when the property of one person is held in another person to conceal the ownership of such property, PBPT Act is attracted. 11. Learned counsel have submitted that the entire premise of show cause notice, provisional attachment order and final attachment order is that the petitioner-company is the Benamidar of its own shareholders, however, such assumption of the respondents is contrary to the specific provision of law and beyond the scope of definition of Benami transaction. It is submitted that the petitioner No.2 cannot be called beneficial owner of the immovable property purchased by the petitioner No.1 within the meaning of PBPT Act. 12. It is argued that as per the exception provided under Section 2(9) of the PBPT Act, the transaction or arrangement cannot be called as a Benami transaction when the property is held by a person standing in a fiduciary capacity for the benefit [2023:RJ-JD:41294-DB] (7 of 23) [CW-16732/2023] of another person towards whom he stands in such capacity. It is submitted that the petitioner No.2 being the Director and shareholder of the petitioner No.1-company, even if provided funds for purchase of the property in the name of petitioner No.1, it cannot be held that the property purchased in the name of petitioner No.1 is the property of petitioner No.2. In support of the above contention, learned counsel for the petitioners have placed reliance on a decision dated 06.10.2021 rendered by a learned Single Judge of this Court at Jaipur Bench in S.B.Civil Writ Petition No.11176/2020, M/s Shri Kalyan Building Pvt. Ltd. through its Director and Ors. vs. The Initiating Officer and Anr. It is also argued that no proper opportunity of hearing was provided by the respondents and the reply filed on behalf of the petitioners to various show cause notices has not been taken into consideration in entirety. 13. It is also submitted that the written submissions filed by the petitioners in respect of the judgment passed by this Court in M/s Shri Kalyan Building Pvt. Ltd. (supra) were not even taken into consideration. Learned counsel for the petitioners have, therefore, argued that the provisional attachment order as well as the order passed by the respondents under Section 24(4) of the PBPT Act and reference made by the respondents under Section 24(5) of the PBPT Act may kindly be quashed and set aside. 14. Reply to the writ petition is filed on behalf of the respondents and relying on the same, learned counsel for the respondents has argued that there is no illegality in passing the [2023:RJ-JD:41294-DB] (8 of 23) [CW-16732/2023] impugned orders as the same are passed after following due procedure laid down under the law, hence, no interference is called for. 15. Heard learned counsel for the parties. 16. For the convenience, the relevant provisions of the PBPT Act as amended are referred herein below: “2(9) “benami transaction” means,— (A) a transaction or an arrangement— (a) where a property is transferred to, or is held by, a person, and the consideration for such property has been provided, or paid by, another person; and (b) the property is held for the immediate or future benefit, direct or indirect, of the person who has provided the consideration, except when the property is held by— (i) a Karta, or a member of a Hindu undivided family, as the case may be, and the property is held for his benefit or benefit of other members in the family and the consideration for such property has been provided or paid out of the known sources of the Hindu undivided family; (ii) a person standing in a fiduciary capacity for the benefit of another person towards whom he stands in such capacity and includes a trustee, executor, partner, director of a company, a depository or a participant as an agent of a depository under the Depositories Act, 1996 (22 of 1996) and any other person as may be notified by the Central Government for this purpose; (iii) any person being an individual in the name of his spouse or in the name of any child of such individual and the consideration for such property has been provided or paid out of the known sources of the individual; (iv) any person in the name of his brother or sister or lineal ascendant or descendant, where the names of brother or sister or lineal ascendant or descendant and the individual appear as joint-owners in any document, and the consideration for such property has been [2023:RJ-JD:41294-DB] (9 of 23) [CW-16732/2023] 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 (4 of 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; and (iii) the contract has been registered. 24. Notice and attachment of property involved in benami transaction.—(1) Where the Initiating Officer, on the basis of material in his possession, has reason to believe that any person is a benamidar in respect of a property, he may, after recording reasons in writing, issue a notice to the person to show cause within such time as may be specified in the notice why the property should not be treated as benami property. (2) Where a notice under sub-section (1) specifies any property as being held by a benamidar referred to in that sub-section, a copy of the notice shall also be issued to the beneficial owner if his identity is known. (3) Where the 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, he may, with the previous approval of the Approving Authority, by order in writing, [2023:RJ-JD:41294-DB] (10 of 23) [CW-16732/2023] attach provisionally the property in the manner as may be prescribed, for a period not exceeding ninety days [from the last day of the month in which the notice under sub- section (1) is issued.] (4) The Initiating Officer, after making such inquires and calling for such reports or evidence as he deems fit and taking into account all relevant materials, shall, within a period of ninety days [from the last day of the month in which the notice under sub-section (1) is issued],— (a) where the provisional attachment has been made under sub-section (3),— (i) pass an order continuing the provisional attachment of the property with the prior approval of the Approving Authority, till the passing of the order by the Adjudicating Authority under subsection (3) of section 26; or (ii) revoke the provisional attachment of the property with the prior approval of the Approving Authority; (b) where provisional attachment has not been made under sub-section (3),— (i) pass an order provisionally attaching the property 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. [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 days: Provided further that where immediately after the exclusion of the aforesaid period, the period of limitation referred to in sub-section [2023:RJ-JD:41294-DB] (11 of 23) [CW-16732/2023] (5) available to the Initiating Officer to refer the order of attachment to Adjudicating Authority is less than seven days, such remaining period shall be deemed to be extended to seven days.] (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. 26. Adjudication of benami property.—(1) On receipt of a reference under sub-section (5) of section 24, the Adjudicating Authority shall issue notice, to furnish such documents, particulars or evidence as is considered necessary on a date to be specified therein, on the following persons, namely:— (a) the person specified as a benamidar therein; (b) any person referred to as the beneficial owner therein or identified as such; (c) any interested party, including a banking company; (d) any person who has made a claim in respect of the property: Provided that the Adjudicating Authority shall issue notice within a period of thirty days from the date on which a reference has been received: Provided further that the notice shall provide a period of not less than thirty days to the person to whom the notice is issued to furnish the information sought. (2) Where the property is held jointly by more than one person, the Adjudicating Authority shall make all endeavours to serve notice to all persons holding the property: Provided that where the notice is served on anyone of the persons, the service of notice shall not be invalid on the ground that the said notice was not served to all the persons holding the property. (3) The Adjudicating Authority shall, after— [2023:RJ-JD:41294-DB] (12 of 23) [CW-16732/2023] (a) considering the reply, if any, to the notice issued under sub-section (1); (b) making or causing to be made such inquiries and calling for such reports or evidence as it deems fit; and (c) taking into account all relevant materials, provide an opportunity of being heard to the person specified as a benamidar therein, the Initiating Officer, and any other person who claims to be the owner of the property, and, thereafter, pass an order— (i) holding the property not to be a benami property and revoking the attachment order; or (ii) holding the property to be a benami property and confirming the attachment order, in all other cases. (4) Where the Adjudicating Authority is satisfied that some part of the properties in respect of which reference has been made to him is benami property, but is not able to specifically identify such part, he shall record a finding to the best of his judgment as to which part of the properties is held benami. (5) Where in the course of proceedings before it, the Adjudicating Authority has reason to believe that a property, other than a property referred to it by the Initiating Officer is benami property, it shall provisionally attach the property and the property shall be deemed to be a property referred to it on the date of receipt of the reference under sub-section (5) of section 24. (6) The Adjudicating Authority may, at any stage of the proceedings, either on the application of any party, or suo motu, strike out the name of any party improperly joined or add the name of any person whose presence before the Adjudicating Authority may be necessary to enable him to adjudicate upon and settle all the questions involved in the reference. (7) No order under sub-section (3) shall be passed after the expiry of one year from the end of the month in which the reference under sub-section (5) of section 24 was received. [Explanation.—For the purposes of this sub- section, in computing the period of limitation, the period during which the proceeding is [2023:RJ-JD:41294-DB] (13 of 23) [CW-16732/2023] 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 available to the Adjudicating Authority for passing order is less than sixty days, such remaining period shall be deemed to be extended to sixty days.] [Provided that where the time limit for passing order under this sub-section expires during the period beginning from the 1st day of July, 2021 and ending on the 29th day of September, 2021, the time limit for passing such order shall be extended to the 30th day of September, 2021.] (8) The benamidar or any other person who claims to be the owner of the property may either appear in person or take the assistance of an authorised representative of his choice to present his case. Explanation.—For the purposes of sub-section (8), authorised representative means a person authorised in writing, being— (i) a person related to the benamidar or such other person in any manner, or a person regularly employed by the benamidar or such other person as the case may be; or (ii) any officer of a scheduled bank with which the benamidar or such other person maintains an account or has other regular dealings; or (iii) any legal practitioner who is entitled to practice in any civil court in India; or (iv) any person who has passed any accountancy examination recognised in this behalf by the Board; or (v) any person who has acquired such educational qualifications as the Board may prescribe for this purpose.” 17. So far as argument of the learned counsel for the petitioners to the effect that the provisional attachment order passed by the Initiating Officer under Section 24(3) of the PBPT Act is illegal as the petitioners were asked to submit response/reply to the notice under Section 24(1) and (2) of the PBPT Act up to 15.05.2023 [2023:RJ-JD:41294-DB] (14 of 23) [CW-16732/2023] but without waiting for reply, the Initiating Officer passed the provisional attachment order on 01.05.2023 is concerned, from bare perusal of the provisions of Section 24 of the PBPT Act, it is clear that the Initiating Officer is not required to wait or consider the response/reply filed pursuant to the notice under Section 24(1) & (2) of the PBPT Act before passing the provisional attachment order. The only requirement for the Initiating Officer is to seek approval of the approving authority before passing the provisional attachment order under Section 24(3) of the PBPT Act and from the provisional attachment order dated 01.05.2023, it is clear that prior approval of the approving authority was obtained by the Initiating Officer. Hence, the said argument of the learned counsel for the petitioner being bereft of merits is rejected. 18. So far as argument of the learned counsel for the petitioners that the Initiating Officer, at the time of issuance of show cause notice under Section 24(1) & (2) of the PBPT Act, did not record any reason to believe, is concerned, it is to be noticed that the Initiating Officer in the show cause notice dated 28.04.2023 has specifically recorded the reasons to believe in para 13.3, which reads as under: “13.3. In view of the evidence on record, material in possession and facts discussed in foregoing paras, the undersigned as Initiating Officer has reasons to believe that :- 1. The transactions carried out by Sh. Mahaveer Lunia in the form of making payments to the seller(s) which was routed through Sh. Anil Sanklecha, CA as discussed above for making purchase of the said lands/immovable properties in your name as mentioned in the Annexure-A are “Benami Transactions” within the meaning of Section 2(9)(A) of the PBPT Act; [2023:RJ-JD:41294-DB] (15 of 23) [CW-16732/2023] 2. The said lands/immovable properties are “Benami Property” within the meaning of Section 2(8) of the PBPT Act; 3. In terms of the provisions Section 2(10) of the PBPT Act, you are the “Benamidar” of these benami properties; and 4. In terms of the provisions Section 2(12) of the PBPT Act, Sh. Mahaveer Lunia is the “Beneficial Owner” of these benami properties mentioned in the Annexure-A.” . In such circumstances, we do not find any merit in the above argument of the learned counsel for the petitioners. 19. The other contention of the petitioner that the order under Section 24(4) of the PBPT Act has been passed by the Initiating Officer beyond the period of limitation is also without any merit because from the bare look of 2 pages order dated 28.07.2023 and 61 pages order dated 28.07.2023, annexed with the writ petition as Annexure-13, it is clear that both contain the same DIN and as such we are of the opinion that both the orders dated 28.07.2023 are one and the same document. Otherwise also, the said objection of the petitioners is technical in nature and cannot be appreciated at this stage. 20. The other contention of the learned counsel for the petitioners that no material was supplied to the petitioners despite repeated requests is also bereft of any merit because from bare look of notice under Section 24(1) of the PBPT Act, it is clear that whatever the relevant material relied upon by the Initiating Officer is clearly mentioned in the show cause notice itself. 21. Another contention of the learned counsel for the petitioners that the petitioners were not provided opportunity of [2023:RJ-JD:41294-DB] (16 of 23) [CW-16732/2023] personal hearing is concerned, from the order dated 28.07.2023, it is clear that vide show cause notice dated 03.07.2023, the petitioner No.2 was asked to remain present for personal hearing before the Initiating Officer on 11.07.2023, however, when the petitioner No.2 failed to appear in person on that day, again an opportunity of personal hearing was provided to him and he was asked to remain present for personal hearing on 19.07.2023 but it appears that the petitioner No.2 did not avail the said opportunity. 22. So far as contention of the learned counsel for the petitioners that as per exception (ii) to Section 2(9) of the PBPT Act, a property cannot be treated as Benami merely for the reason that shareholder provided funds to the company for purchasing any property is concerned, we are of the view that no doubt the funds provided by the shareholders form the capital of a company and if from the said capital, any property is purchased in the name of the company, certainly it cannot be treated as Benami, however, if a property is purchased in the name of the company but not from company’s funds or its capital then the situation would be different. 23. Section 2(9)(A)(a) of the PBPT Act provides that where a property is transferred or held by a person and the consideration for such property is paid by another person, then the said transaction means Benami transaction. 24. The stand of the respondents is that the petitioner- company is a shell company, however, immovable properties are purchased in its name not from company’s funds or its capital [2023:RJ-JD:41294-DB] (17 of 23) [CW-16732/2023] but from the funds made available by the petitioner No.2 from the income earned through other businesses. 25. The Initiating Officer, after taking into consideration the material available with it and the response filed on behalf of the petitioners, recorded its prima facie opinion in the order dated 28.07.2023 passed under Section 24(3) of PBPT Act. The relevant portion of the order dated 28.07.2023 is reproduced as under: “16. From the discussion made in the aforementioned paragraphs, it is clearly established that:- i. The Benamidar company was previously controlled and owned by entry operators of Kolkata and Mumbai. The company is a shell company/paper company which has been used for providing accommodation/bogus entries in lieu of cash payment. ii. The company was not having real worth as well as creditworthiness to purchase the said lands/immovable properties by way of of making such investment on its own. iii. There is no significant changes in financial position/status of the company before and after acquisition of the company by the Lunia family. iv. Sh. Mahaveer Lunia and his family members are having full control and management of the company since F.Y. 2016-17 (from the date of transfer of shares of these companies in their own names or in the name of the other companies wherein they are holding 100% share). Thus, since F.Y. 2016-17 the company is controlled & managed by Sh. Mahaveer Lunia and his family members. v. The cash transactions carried out through Hawala/Angadia between Shri Mahaveer Lunia and Shri Anil Sankhlecha during F.Y. 2017-18 and 2018-19 were routed in the company and ultimately used for making purchase of the said lands/immovable properties in the name of M/s Alishan Complex Pvt. Ltd. 17. In view of the above-mentioned facts, material available on records and reasons to believe, it is evident that the provisions of [2023:RJ-JD:41294-DB] (18 of 23) [CW-16732/2023] Section 2(9)(A) of the BPT Act, 1988 are squarely applicable in this case. For ready reference, the provisions of Section 2(9)(A) of the PBPT Act, 1988 are reproduced here under \" (A) Benami transactions means : A transaction or an arrangement (a) Where a property is transferred to, or is held by, a person, and the consideration for such property has been provided, or paid by, another person; and (b) The property is held for the immediate or future benefit, direct or indirect, of the person who has provided the consideration.\" 18. As per the definition of \"benami transaction' in Section 2(9) (A) of the BPT Act, 1988 a benami transaction requires the following three conditions to be fulfilled, which were seen fulfilled in light of the facts & circumstances of the instant case :- S.No. Condition as per section 2(9)(A) Applicability in the present case 1. Where a property is transferred to or held by a person The said lands were transferred/held in the name of M/s Alishan Complex Pvt. Ltd. as per details of the immovable properties mentioned in Annexure-A. 2. Consideration for such property has been provided, or paid by, another person The entire consideration for purchase of the said lands/immovable properties in the name of M/s Alishan Complex Pvt. Ltd. was paid by Sh. Mahaveer Lunia S/o Sh. Jawari Lal Lunia which was routed through Sh.Anil Sankhlecha, CA as discussed above and not by M/s Alishan Complex Pvt. Ltd. M/s Alishan Complex Pvt. Ltd., was a shell/paper company and engaged in providing bogus entries. Thus, the company was not having capacity/creditworthiness to purchase the said lands/ immovable properties for making payment of such a huge amount. 3. The property is held for the immediate or From the discussions made by the foregoing paras it is clear that M/s Alishan [2023:RJ-JD:41294-DB] (19 of 23) [CW-16732/2023] future benefit, direct or indirect, of the person who has provided the consideration Complex Pvt. Ltd. is/was holding the said lands/immovable properties for immediate/future benefit of Sh. Mahaveer Lunia. 19. Further, the Hon'ble Supreme Court has concluded after considering its earlier judgment in the case of Valliammal vs. Subramaniam (2004) 7 SSC 233 that while considering whether a particular transaction is benami in nature, the six circumstances can be taken as a guide. These six circumstances are discussed below to show that how these are fulfilled in the instant case:- S.No. Circumstances Applicability in the instant case 1. The sources from which the purchase money came. As discussed in aforesaid paras and material available on records, it is evident that the entire consideration for purchase of the said lands/immovable properties in the name of M/s Alishan Complex Pvt. Ltd. was paid by Sh. Mahaveer Lunia which was routed through Sh. Anil Sankhlecha, CA. 2. The nature and possession of the property, after the purchase As discussed in aforesaid paras and material available on records, it is evident that the actual possession over the said lands purchased in the name of M/s Alishan Complex Pvt. Ltd. was/is always with Sh. Mahaveer Lunia, the beneficial owner. M/s Alishan Complex Pvt. Ltd. was only the name lender of the transactions for land records only. 3. Motive, if any, for giving the transaction benami colour; As discussed in aforesaid paras and material available on records, it is evident that the said lands/immovable properties were purchased in the name of M/s Alishan Complex Pvt. Ltd., out of the cash held by Sh. Mahaveer Lunia which was routed through Sh. Anil Sankhlecha, CA. It is also a fact that the company was a shell/paper company and engaged in providing bogus entries, therefore, the cash held by Sh. [2023:RJ-JD:41294-DB] (20 of 23) [CW-16732/2023] Mahaveer Lunia was utilized in purchase of the said lands/immovable properties in the name of M/s Alishan Complex Pvt. Ltd. instead of the beneficial owner i.e. Sh. Mahaveer Lunia. 4. The position of the parties and the relationship, if any, between the claimant and the alleged benamidar; Sh. Mahaveer Lunia through self and his family members is having full control and management of the company since F.Y. 2016-17 (from the date of transfer of shares of the company in their own names or in the name of the other companies wherein they are holding 100% share). Thus, since F.Y. 2016-17 the company is controlled & managed by Sh. Mahaveer Lunia, therefore all the said lands/immovable properties were purchased in F.Y. 2016-17 and later on after getting control & management over the company. 5. The custody of the title deeds after the sale; It is evident from the fact that during the search conducted on 16.06.2022, a detailed list of various immovable properties purchased in the name of this company found at the residence premises of Sh. Mahveer Lunia i.e. Lalit. Kunj, Opposite Hotel Mapple Abhay, Paota, Jodhpur which was inventorised and seized as Exhibit-6 of Annexure-BS. Further, original registered sale deeds of some of the said lands/immovable properties were also found & seized from the residence of Shri Mahaveer Lunia. 6. The conduct of the parties concerned in dealing with the property after the sale. As discussed in aforesaid paras and material available on records, it is evident that after purchasing the said lands/immovable properties in the name of M/s Alishan Alishan Complex Pvt. Ltd., Shri Mahaveer Lunia is having full possession over the said lands/immovable properties for his immediate/future benefits. CONCLUSION : 20. In view of the above facts, evidences on record and above reasons to believe, as discussed in detail in the foregoing paras, I am of the considered view that the said lands/ immovable properties mentioned in Annexure-A purchased in the name of M/s Alishan [2023:RJ-JD:41294-DB] (21 of 23) [CW-16732/2023] Complex Pvt. Ltd., are \"Benami Property\" within the meaning of Section 2(8) of the PBPT Act, 1988 ; 20.1 The transactions carried out by Sh. Mahaveer Lunia S/o Sh. Jawari Lal Lunia (PAN : AAWPL0148A) in the form of providing consideration which was routed by Sh. Anil Sankhlecha, CA to the sellers for making purchases of the said lands/immovable properties in the name of M/s Alishan Complex Pvt. Ltd. are \"Benami Transaction\" within the meaning of Section 2(9)(A) of the PBPT Act, 1988. 20.2 M/s Alishan Complex Pvt. Ltd., is the \"Benamidar\" of the said lands/immovable properties in terms of the provisions of Section 2(10) of the PBPT Act, 1988 and Sh. Mahaveer Lunia S/o Sh. Jawari Lal Lunia is the \"Beneficial Owner\" of these benami properties in terms of the provisions of Section 2(12) of the PBPT Act, 1988. Therefore, the benami properties mentioned in Annexure-A are liable to be confiscated as per the provisions of the PBPT Act, 1988 being benami properties.” 26. Having gone through the above reasons recorded by the Initiating Officer, we are of the opinion that submissions of learned counsel for the petitioners referring to Section 2(9) of the PBPT Act are without any basis, hence rejected. 27. The judgment rendered in M/s Shri Kalyan Building’s case (supra) is of little help to the petitioners because in that case the petitioners approached this Court after passing of the order by the adjudicating authority under Section 26(3) of the PBPT Act and the appellate tribunal, where the petitioners had remedy to prefer appeal, was not functional, however, no such situation exists in the present case. Apart from that, the findings recorded by the learned Single Judge in M/s Shri Kalyan Building’s case is based on that facts and, therefore, the same are not binding. [2023:RJ-JD:41294-DB] (22 of 23) [CW-16732/2023] 28. As per the provisions of Section 24 of the PBPT Act, the Initiating Officer is required to record its prima facie satisfaction before referring the matter to the adjudicating authority. Considering the provisions of Section 24 of the PBPT Act, the Division Bench of Madras High Court in Dinesh Chand Surana Vs. Deputy Commissioner of Income Tax (Benami Prohibition) Chennai & Ors., 2022 0 Supreme (Mad) 3397 held as under: “15. That part, it is important to note that the proceedings under section 24 only require a recording of prima facie opinion as to the benami nature of the transaction and the respondent is required to furnish the documents, particulars or evidence and provide an opportunity of being heard to the appellants only at the stage of adjudication proceedings.” 29. The Division Bench of M.P. High Court in Abhay Nigam & Ors. vs. Union of India & Ors., 2021 0 Supreme (MP) 399 held as under: “15. The matter may be viewed from another angle. The Prohibition of Benami Property Transactions of 1988 (Act of 1988) u/S. 24(3) provides power of provisional attachment. The said provisional attachment needs to be confirmed by the \"adjudicating authority\" u/S. 26 of the said Act. In WP No. 10280/2017 (Kailash Asudani Vs. Commissioner of Income Tax) the petitioner assailed the provisional attachment order on the ground that the property in question was not a benami property and without proper application of mind and in absence of adequate material, the order of provisional attachment was passed. This Court declined interference by holding that:- \"The order impugned is provisional/tentative in nature. It is subject to judicial review by adjudicating authority. If order of adjudicating authority goes against the petitioner, the further forums of judicial review of said order is available to the petitioner before the appellate tribunal and then before this Court. Hence, against the tentative/provisional order, no interference is warranted by this court at this stage. As per the scheme of the Act, the petitioner can raise all possible grounds before the adjudicating authority. The adjudicating [2023:RJ-JD:41294-DB] (23 of 23) [CW-16732/2023] authority is best suited and statutorily obliged to consider all relevant aspects. Thus, at this stage no case is made out for interference.\" (Emphasis supplied) 16. This order of writ court was unsuccessfully challenged by petitioner therein by filing WA No. 704/2017. The division bench declined interference by recording that:- \"We do not find any merit in the present appeal. It is the Adjudicating Authority who is to decide the question of Benami nature of the property. The proceedings under Section 24 of the Act contemplates the issuance of show cause notice as to why the property specified in the notice should not be treated as Benami property. However, the substantive order of treating the property as Benami is required to be passed by Adjudicating Authority under Section 26 of the Act only. Therefore, the appellant is at liberty to take all such plea of law and facts as may be available to the appellant before the Adjudicating Authority. The Adjudicating Authority shall decide the Benami nature of the property in accordance with law.\" (Emphasis supplied) 17. Following the principles laid down, another bench of Principal Seat in WP No. 3957/2019 and 3963/2019 [Simmant Kohli Vs. Union of India & Ors] relegated the petitioner to avail the remedy available before adjudicating authority. 18. If Scheme ingrained in Sec. 24 and 26 of the Act of 1988 is compared with the PML Act, it will be clear that the Scheme is almost pari materia. For this reason also, we deem it proper to hold that \"adjudicating authority\" is best suited and statutorily obliged to consider the validity of provisional attachment order and the case put forth by the present appellants.” 30. In view of the above, we do not find any case for interference. Hence, all these writ petitions fail and are hereby dismissed. Stay petitions also stand dismissed. 31. No costs. (YOGENDRA KUMAR PUROHIT),J (VIJAY BISHNOI),J masif/-D.R. "