YOOSAF.N.A V. DEPUTY DIRECTOR OF INCOME TAX (INVESTIGATION)

WP(C)/21345/2018

AI Insights

In this case, the petitioner, Yoosaf N.A, was found in possession of money whose source he could not explain. The Income Tax department provisionally attached this money and initiated proceedings under the Prohibition of Benami Property Transactions Act, 1988. The petitioner contested that the money could not be considered 'benami property' as it was not derived from the proceeds of any property that could be classified as benami. The court examined the arguments presented by both the petitioner and the respondents, focusing on the nature of the show-cause notice and the burden of proof regarding the 'benami' status of the money.

• Counselvise Citation: [2018] 140 COUNSELVISE.COM (IT) 755189 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 06-07-2018
• Assessment Year: misc
• Laws Referred To: Prohibition of Benami Property Transactions Act, 1988
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: CHRISTOPHER ABRAHAM
• Assessee Lawyers: P RAGHUNATH; PREMJIT NAGENDRAN
• Keywords: Benami property; Income Tax; Provisional attachment; Show cause notice
• Section: 24(4)

Judgement Text

" IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE DAMA SESHADRI NAIDU FRIDAY, THE 6TH DAY OF JULY 2018 / 15TH ASHADHA, 1940 WP(C).No. 21345 of 2018 PETITIONER YOOSAF.N.A S/O.ABOOBACKER KUTTY, POYILIL HOUSE, KODUVALLAY P O, KOZHIKODE-673572. BY ADVS.SRI.P.RAGHUNATH SRI.PREMJIT NAGENDRAN RESPONDENTS: 1. DEPUTY DIRECTOR OF INCOME TAX (INVESTIGATION) INCOMETAX OFFICE, AAYAKKAR BHAVAN, MANANCHIRA, CALICUT-673001. 2. ASSISTANT COMMISSIONER OF INCOMETAX. BENAMI PROHIBITION UNIT, POORNIMA BUILDING, NEAR MANORAMA JUNCTION, PANAMPILLY NAGAR, KOCHI-682036. 3. ADDITIONAL COMMISSIONER OF INCOMETAX. (APPROVING AUTHORITY), BENAMI PROHIBITION UNIT, POORNIMA BUILDING, NEAR MANORAMA JUNCTION, PANAMPILLY NAGAR,KOCHI-682036. 4. ADJUDICATING AUTHORITHY UNDER THE PROHIBITION OF BENAMY PROPERTY TRANSACTIONS ACT: ROOM NO.26:4TH FLOOR, JEEVAN DEEP BUILDING: PARLIAMENT STREET: NEW DELHI:110001. 5. UNION OF INDIA MINISTRY OF FINANCE: NEW DELHI:110001, REP.BY SECRETARY:MINISTRY OF FINANCE NEW DELHI, BY SRI.CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENT THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 06-07-2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C).No. 21345 of 2018 (P) APPENDIX PETITIONER(S)' EXHIBITS EXHIBIT P1 PHOTOCOPY OF THE SUBMISSION FILED BY YOOSAF DATED 12.04.2017. EXHIBIT P2 PHOTCOPY OF THE AFFIDAVIT FILED YOOSAF DATED 12.04.2017. EXHIBIT P3 PHOTOCOPY OF ORDER IN CRMP NO.3953/2017 DATED 24.07.2017. EXHIBIT P4 PHOTOCOPY OF YOOSAF DATED 24.04.2017. EXHIBIT P5 PHOTOCOPY OF THE NOTICE DATED 13.12.2017 ISSUED BY THIRD RESPONDENT. EXHIBIT P6 PHOTOCOPY OF THE ORDER DATED 12.03.2018 PASSED BY THE SECOND RESPONDENT. EXHIBIT P7 PHOTOCOPY OF THE ORDER DATED 12.03.2018 PASSED BY THE THIRD RESPONDENT. EXHIBIT P8 PHOTOCOPY OF THE NOTICE DATED 13.04.2018 ISSUED BY FOURTH RESPONDENT. jjj DAMA SESHADRI NAIDU, J. ------------------------------------------ W.P.(C) No. 21345 of 2018 (P) ------------------------------------------ Dated: 06th July 2018 J U D G M E N T The petitioner was found with money, the source of which he could not explain. Then, the Income Tax department took custody of the money—they attached it, so to say—and began proceedings under The Prohibition of Benami Property Transactions Act, 1988. Later, the authorities issued Ext.P6 proceedings, confirming the provisional attachment made earlier. Eventually, they also issued Ext.P8 show cause notice. 2. The learned counsel for the petitioner has strenuously contended that money cannot be treated as “Benami property.” According to him, it ought to have been the proceeds of some property, which, by itself, ought to be Benami. W.P.(C) No.21345/2018 2 3. To elaborate, the learned counsel has also submitted that the burden lies on the department, at least prima facie, to allege that the money was generated out of the proceeds of a benami property. Here, according to him, that allegation is absent. 4. The learned counsel has also submitted that, though Ext.P8 is styled as a show cause notice, the authorities, in fact, have already concluded—wrongly though—that the money seized is a benami asset. So Ext.P8 cannot be termed a show cause notice. For that reason, the writ petition does not face any the procedural constraint: alternative remedy. He has also contended that once the authorities have no jurisdiction, then before this Court, under Article 226 of the Constitution, even a show-cause notice could be questioned. 5. The learned Standing Counsel, on his part, has drawn my attention to Section 24(4) of the Act. He contends that W.P.(C) No.21345/2018 3 Ext.P6 only confirms a decision without concluding about the nature of the proceeds. He has also submitted that Ext.P8, pure and simple, is a show-cause notice. And whether the property is tainted lies in the petitioner’s “special knowledge.” Under these circumstances, the petitioner must produce before the authorities sufficient material or place his defence, contends the learned Standing Counsel, in response to Ext.P8. 6. Heard the learned counsel for the petitioner and the learned Standing Counsel for the respondents. 7. I have perused the Ext.P8; I reckon it is a show-cause notice. It only requires the petitioner to explain how he came to possess that money. After all, the source of money and its nature are in the “special knowledge” of the possessor. Indeed, the petitioner could take all possible pleas before the authorities, including the plea about their jurisdiction and also about the discharge of primary burden, if any, on the official's W.P.(C) No.21345/2018 4 part. 8. Under these circumstances, I find no merit in the writ petition because, as is well settled, there lies no writ petition against a show-cause notice. I, however, clarify that, after submitting his reply to Ext.P8, the petitioner can invite a response from the authorities and initiate steps, if he is still aggrieved, to assail the order to be passed. So I dismiss the writ petition. No order on costs Sd/- DAMA SESHADRI NAIDU JUDGE jjj 06/07/2018 "