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The Income Tax department has been empowered to attach assets under the Prohibition of Benami Property Transactions (PBPT) Act, 1988, even if the actual owner remains unidentified. A recent ruling by the Adjudicating Authority upheld the attachment of land assets worth INR 3.10 crore in Lucknow, following raids on real estate groups accused of using unaccounted cash. The Authority clarified that Section 2(9)(D) of the PBPT Act allows for such actions when the beneficial owner is untraceable or fictitious. This ruling reinforces the department's ability to combat benami transactions and sets a precedent for handling complex property disputes under the anti-benami law.
The Income Tax department has the authority to attach assets under the anti-benami law, even if the actual owner of the property is unidentified. This clarification came through a recent ruling by the Adjudicating Authority under the Prohibition of Benami Property Transactions (PBPT) Act, 1988. The Authority upheld a 2023 order issued by the Lucknow unit of the I-T department to attach land assets valued at INR 3.47 crore. Advertisement
The case stemmed from raids on three real estate groups in Lucknow accused of acquiring large parcels of land in the Kakori area using significant amounts of unaccounted cash. Following the investigation, the department provisionally attached five land parcels, categorising them as "benami assets." However, the provisional order did not identify a "beneficial owner," only listing the name of a "benamidar" and other "interested parties."
The ruling partially confirmed the attachment order for properties worth INR 3.10 crore, citing insufficient evidence regarding the payment for the remaining balance. Ravi Kumar, an office boy at Excella, was identified as the benamidar. Meanwhile, two companies-Pintail Real Estate LLP and Excella Premioinfra LLP and one individual, Shiv Kumar, were excluded from the attachment order due to a lack of clear evidence against them.
The Authority also named Haresh Kumar Mishra as an abettor, directing further investigation into additional assets allegedly acquired under Ravi Kumar's name. The Lucknow Benami Prohibition Unit later attached five more land parcels worth INR 5.68 crore in Mohanlalganj, following directions from the Authority.
The defendants contended that the attachment was invalid because it failed to name a "beneficial owner" as required by the law. However, the Authority clarified that Section 2(9)(D) of the PBPT Act permits such actions when the individual funding the transaction is either untraceable or fictitious. It noted that errors in invoking specific legal provisions do not render an order invalid, referencing a 2009 Supreme Court ruling that supported this principle.
This ruling reinforces the I-T department's ability to combat benami transactions effectively, even in cases where the true owner is untraceable. It highlights the PBPT Act's robust provisions designed to address ambiguities, ensuring that legal technicalities do not obstruct justice. The case also underscores the importance of meticulous investigation and adherence to procedural guidelines when handling such complex property disputes. As more assets come under scrutiny, the decision sets a precedent for future actions against benami property holdings in India.
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