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2017 (10) TMI 1653 - HC - Benami PropertyBenami transaction proceeding initiated by the Initiating Officer (IO) - validity of proceeding under the Prohibition of Benami Property Transactions Act, 1988 - retrospectivity or prospectivity of the penal provisions in the 2016 Amendment Act - jurisdictional violation of exercise of powers under the 1988 Act (as amended) - Company denied that the provisions of the 1988 Act are at all applicable to the facts of the present case and if at all, the IO has jurisdiction only to inquire under Section 68 of the Income Tax Act - HELD THAT:- This Court must notice the relevance of Sections 2(9)(B) and (D) of the 1988 Act (as amended) which, inter alia, collectively define a benami transaction as an arrangement in respect of a property carried out in a fictitious name where the person providing the consideration is not traceable. This Court, on the basis of materials placed, is satisfied that the IO has applied his mind to the facts painstakingly collected and the issue now requires solid factual adjudication at the level of the AA. This Court is also satisfied that the preliminary legal objection taken by Mr. Kar is not persuasive for a Writ court to interdict a proceeding under the 1988 Act qua a private limited company where the dominant shareholders are de facto the Company itself and it has become necessary to identify the structure and role of the entities in respect of a transaction which requires exploration at the appropriate factual level on its alleged benami colour. Distance claimed by Mr. Kar of the shareholders from any interest in the immovable property of the Company on the strength of the decision reported in [1954 (10) TMI 2 - SUPREME COURT] (supra) would depend on the ground situation influencing the pecuniary proximity in a given case which, require to be exhaustively examined at the level of the AA. This Court cannot be oblivious to the fact that the attachment declared by the IO is provisional and the petitioners should not shy away from an adjudication by the AA if they are sure that factually the Company stands on firm ground. Point raised by petitioner against retrospectivity of the penal provisions in the 2016 Amendment Act is answered with the observation that the 1988 Act, as amended in 2016, imbibes the colour of a statute in restraint of acts constituting benami transactions. The Act does not seek to create any vested/substantive rights, only indirectly protecting transactions which fall within the exceptions of a benami transaction, viz. Section 9(A)(i) to (iv). Section 1(3) of the 1988 Act itself provides for prospectivity of its operative portions, viz. its penal clauses, in contra distinction to its definition/defining provisions. Furthermore, this Court has no reason to accede to Prayer (a) of the Writ Petition upon noticing that the steps contemplated under Section 24 (supra) follow the notice of the IO and, being procedural apply in seriatim to the notice for the purpose of identifying a benami transaction prohibited in the statute book w.e.f 19 May, 1988. The orders impugned of the IO are thus not interfered with. Accordingly, no jurisdictional violation of exercise of powers under the 1988 Act (as amended) is found by this Court.
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