GANESH CHANDRA DAS AND ANR V. THE DEPUTY COMMISSIONER OF INCOME TAX (BP) AND ANR.

WP(C)/3245/2022

AI Insights

The case involves a writ petition filed by Ganesh Chandra Das and Bhagya Kalita against the Deputy Commissioner of Income Tax (BP) and the Joint Commissioner of Income Tax (BPU), challenging an order under Section 24(3) of the Prohibition of Benami Property Transactions Act, 1988, which sought to attach property owned by Ganesh Chandra Das. The petitioners argued that the order was passed without proper procedure and satisfaction regarding the likelihood of the property being alienated. The court heard arguments from both sides, considered the written instructions from the Income Tax Department, and decided to grant the petitioners additional time to respond to the show cause notice, thereby not giving effect to the impugned order immediately.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 672676 (HC-ASSAM NAGALAND MIZORAM AND ARUNACHAL PRADESH)
• Appeal Type: Others
• Pronouncement Date: 23-05-2022
• Assessment Year: misc
• Laws Referred To: Prohibition of Benami Property Transactions Act, 1988
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: H GUPTA
• Assessee Lawyers: P K GOSWAMI; A SHANDILYA
• Keywords: Benami property; Legal Procedure; Property Attachment; Satisfaction requirement
• Section: 24(1); 24(3)

Judgement Text

"Page No.# 1/5 GAHC010094642022 THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH) WP(C)/3245/2022 GANESH CHANDRA DAS AND ANR S/O LT. DADHIRAM DAS R/O MEGHALI PATH PUB SARANIA P.O. AND P.S CHANDMARI GUWAHATI-781003 2: BHAGYA KALITA R/O PIYOLIPHUKAN ROAD REHABARI GUWAHATI ASSAM-781008 VERSUS THE DEPUTY COMMISSIONER OF INCOME TAX (BP) AND ANR. O/O THE DEPUTY COMMISSIONER OF INCOME TAX (BP) GUWAHATI AAYKAR BHAWAN CHRISTIAN BASTI G.S. ROAD GUWAHATI-781005 2:THE JOINT COMMISSIONER OF INCOME TAX (BPU) GUWAHATI O/O THE DEPUTY COMMISSIONER OF INCOME TAX (BP) GUWAHATI AAYKAR BHAWAN CHRISTIAN BASTI G.S. ROAD GUWAHATI-781005 ------------ Advocate for : MR. P K GOSWAMI Advocate for : SC INCOME TAX appearing for THE DEPUTY COMMISSIONER OF INCOME TAX (BP) AND ANR. Page No.# 2/5 BEFORE HONOURABLE MR. JUSTICE SANJAY KUMAR MEDHI ORDER 23.05.2022 Heard Shri PK Goswami, learned Senior Counsel assisted by Shri A Shandilya, learned counsel for the petitioners. Also heard Shri H Gupta, learned Central Government Counsel (CGC) appearing for the Income Tax Department. 2. Considering the limited prayer made in this petition and as agreed to by the parties, this writ petition is being disposed of at the motion stage itself. 3. At this stage, it may be mentioned that on the earlier date i.e., 20.05.2022, this Court had directed Shri Gupta, learned CGC to obtain instructions which he has, accordingly obtained in the form of written instructions and has placed the same before this Court. 4. The grievance of the petitioners is against an order dated 31.03.2022 passed under Section 24(3) of the Prohibition of Benami Property Transactions Act, 1988 (for short referred to as the Act) whereby, the property of the petitioner no. 1 has been sought to be attached. The grounds of challenge, amongst others is violation of the procedure, including the requirement to arrive at a satisfaction before forming an opinion that the property in question may be alienated during the period specified in the notice. 5. It is the case of the petitioners that in relation to a particular property of which the petitioner no. 1 is the de jure owner, alleging that the petitioner no. 2 is the benamidar, a proceeding was initiated under section 24 of the Act in question. It is the specific case of the petitioners that though a reply is required to be filed in response Page No.# 3/5 to the notice, due to absence of materials required to prepare an effective reply, the same could not be filed. The petitioners allege that the materials were not supplied to them in spite of numerous requests and as a result thereof, the reply could not be filed on time. On the other hand, by invoking the provisions of Section 24(3) of the Act, an order has been passed and, as has been observed above, the said order is without coming to a satisfaction regarding the requirement that the property in question is likely to be alienated. 6. Shri Goswami, the learned Senior Counsel submits that formation of an opinion being a condition precedent, absence of the same would render the entire action void ab initio due to lack of jurisdiction. 7. On the other hand, Shri Gupta, learned CGC by referring to written instructions submits that the allegation of violation of any procedure laid down in the said section is not based on any materials rather, by drawing the attention of this Court to a note dated 28.03.2022, he learned CGC submits that the appropriate authority under Section 24(1) had come to a prima facie satisfaction for issuing the show cause notice in the present case after taking into consideration all the attending facts and circumstances. 8. On the specific challenge made in the present petition with regard to not fulfilling the requirement of coming to an opinion that the property held benami may be alienated, the learned CGC has drawn the attention of this Court to another note dated 30.03.2022 of the Deputy Commissioner from where it appears that after consideration of certain facts and circumstances, a satisfaction was arrived at that the asset in question might be alienated and therefore, the approval was sought for from the appropriate authority. The said note was duly considered by the appropriate authority and necessary approval was also given on the same date i.e., 30.03.2022. Page No.# 4/5 The learned CGC, accordingly submits that there is no error in the procedure adopted as from the note dated 30.03.2022, it is prima facie clear that a satisfaction was arrived at that the asset might be alienated. 9. Rejoining his submission, Shri Goswami, learned Senior Counsel has submitted that even without having any access to the note mentioned above, while reading out the same, it transpires that apart from the term ‘satisfied’, there appears to be no material based on which such satisfaction was arrived and therefore, it appears that the satisfaction was a mechanical one and not based on any objective standards. 10. Though this Court may not go into the adequacy of the reasons or grounds contained in the note, it prima facie appears that the prelude to the note is not connected with the requirement to come to a satisfaction regarding alienation of the property which is the issue involved in the present litigation. 11. However, in view of the order proposed to be passed, this Court will refrain from making any further observation on the merits of the case so as to avoid causing of any prejudice to either of the parties. 12. On a specific query, the learned Senior Counsel for the petitioners has submitted that apart from the lack of satisfaction, there is no intention on the part of the petitioners to alienate the property in question and in this regard, attention of this Court has been invited to an undertaking contained in paragraph 24 of the petition whereby the petitioners have undertaken not to alienate the said property and the averments have also been properly verified in the accompanying affidavit. Shri Goswami, learned Senior Counsel further submits that the petitioners are ready and willing to submit the reply to the show cause notice which is an obligation under Section 24(1) of the Act and prays for time of two weeks for the said purpose. Page No.# 5/5 13. After considering the same, this Court is of the view that interest of justice would be served if a period of 10 days is granted to the petitioners to submit the reply to the show cause notice dated 30.03.2022. 14. In the event, the reply is filed within 10 days from today i.e., 06.06.2022, the respondent authorities would consider the same strictly in accordance with the provisions laid down in Section 24 of the Act. 15. It is needless to state that the proceedings impugned in this writ petition, namely, order dated 31.03.2022 will not be given effect to in view of the clear undertaking given by the petitioners in the writ petition supported by an affidavit and the process will start afresh from the stage of the procedure laid down in Section 24(1) of the Act which will be done strictly in accordance with law. 16. The writ petition is, accordingly disposed of. 17. Copy of the written instructions is made a part of the records. JUDGE Comparing Assistant "