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TMI Blog2018 (12) TMI 273X X X X Extracts X X X X X X X X Extracts X X X X ..... filed by K. Renuga. The same are referred as under:- (i) The Appellant is employed as an Assistant Professor in St. Joseph's Institute of Science and Technology since 2013 and is drawing salary of Rs. 55,084 p.m. The said college is run by St. Joseph Educational Trust (in short "Trust"), whose Chairman is Shri B. Babu Manoharan. The Appellant is filing her Income tax returns regularly. She has a bank account No. 445443811 with Indian Bank, Chennai in which there was a credit balance of Rs. 737/- on the date of attachment. (ii) The Appellant on 15/11/2016 had received an amount of Rs. 1,00,000/- as salary advance from the Trust, through Dr. T. Kalyani, Head of her Department, out of which she used Rs. 95,000/- in repaying her debts. (iii) On 17/11/2016, a search action u/s 132 of the Income tax Act, 1961 was conducted in the case of the Trust. (iv) On 24/11/2016, out of the advance of Rs. 1 Lakh received, only Rs. 5,000/- were left with her, which amount upon the insistence of Income tax Authorities, the Appellant returned back to the Trust. 4. During the course of search, sworn statement of the Appellant was recorded on 28/11/2016 by the Income Tax Authorities. In ans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... You are hereby required u/s 24(3) of the Benami Transactions (Prohibitions) Amendment Act, 2016 to pay to provisionally attach any amount due from you to or held by you or.............." 8. The Appellant placed on record before the Adjudicating Authority the statement of her Indian Bank account from November, 2016 to March, 2017. It was stated that merely on the basis of assumption of the I.O that Rs. 1 Lakh of cash was deposited in the said account and is lying there. 9. The appellant in her reply dated 09/02/2017 to the Provisional Attachment order reiterated the factual position as aforesaid and requested the I.O to withdraw the Provisional Attachment order. The I.O ignoring the replies given from time to time by the Appellant, passed the Attachment order dated 13.03.2017 under section 24(4)(a)(i) of the Act continuing the provisional attachment of the property already made under sub-section (3) of Section 24 of the Act which is packed with factual in accuracies. 10. In the I.O's order, it was stated, as under:- a. Para 6 of I.O's order reproduces a part of the Appellant's statement as under: "I received Rs. 1,00,000/- from HOD, Deptt. Of Maths on 15.11.2016. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the respondent that these three appellants who had allegedly received the said amount, have returned back the remaining salary amount to the management before 31.3.2017. The detailed chart is also provided by the learned counsel of the appellant during the course of hearing of the appeal. The factual position in the chart is not denied by the counsel for the respondent. The same is reproduced here below: S. N (1) Tribunal's Reference & Appellant's Name (2) Salary Advance taken (3) Part Salary Advance returned within 10 days (4) Remaining Salary advance returned back (5) Date of Receipt Amount Rs. Date of Return Amount Rs. Date of Return Amount Rs. Mode of Return B.1 PB 40/2018 K. Renuga 15.11.16 1,00,000 24.11.16 5,000 30.03.17 95,000 Cash B.2 PB 51/2018 S. Tamilmani 14.11.16 2,00,000 22.11.16 1,50,000 31.03.17 50,000 Bank transfer B.3 PB 28/2018 K.Vijaya-kumar 14.11.16 2,00,000 24.11.16 1,00,000 30.03.17 1,00,000 Bank transfer 14. On the same lines, the affidavits have been filed by the appellants stating that - i. In her affidavit, Ms. K. Renuga has stated that she is employed as Assistant Professor in St. Josep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etails of disbursement of amounts to various Department Heads for further disbursements were found. 18. The statement of the Chairman was recorded during the course of search wherein he stated that salary advance was given to employees of two colleges as salary advance for their personal purposes. This was given only to interested employees, who gave their consent for the same. The employees in their statements also agreed to having received such money. He also said that he would pay tax on the entire amount mentioned in the list of disbursement, as income of the trusts. The trust accordingly honored the Chairman's commitment and paid taxes on income of Rs. 8.18 Crores, availing the scheme of PMGKY. In the present lot or total 49 appeals, no appeal is with regard to Chairman. 19. The grounds 3 to 7 of the appeal are reproduced hereunder in order to understand the case of the appellants in the appeals. Ground 3: Order of the Authority is perverse, illegal and completely not sustainable for the following reasons: i. The Authority has not considered any of the Appellant's written submission filed on 15-05-2017 and 23-06-2017 and also not considered the arguments made by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y returned to the Trust. Such genuine transactions are outside the purview of the Benami Act. Ground 5: Disbursed amount belongs to the Trusts and not the alleged beneficial owner and hence the order passed by the Authority is liable to be set aside. The Adjudicating Authority while passing the order has completely ignored the fact that the amount of Rs. 8.18 crores disbursed by the two Trusts (namely St. Joseph Educational Trust and St. Joseph Institute of Science & Technology Trust) has been fully declared by the Respective Trusts under the Pradhan Mantri Garib Kalyan Yojana (PMGKY) scheme and even appropriate taxes were paid in full, the evidence of which was submitted before the Adjudicating Authority on 15-05-2017. Ground 6: The Adjudicating Authority has passed the order by completely ignoring the fact that the alleged benami property does not exist in this case as the appellant had already used Rs. 95,000/- for clearing her debts and returned back the remaining amount of Rs. 5,000/- to the Management. Ground 7 : Order passed by the Authority is not in conformity with the Benami Law and hence liable to be set aside. i. The provisions of the Benami Act clearly show that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 53-A 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isition by such authority in such manner and after following such procedure as may be prescribed; (b) no amount shall be payable for the acquisition of any property held benami; (c) the purchase of property by any person in the name of his wife or unmarried daughter for their benefit would not be benami transaction; (d) the securities held by a depository as registered owner under the provisions of the Depositories Act, 1996 or participant as an agent of a depository would not be benami transactions. 2. During the administration of the Benami Transactions (Prohibition) Act, 1988, it was found that the provisions of the aforesaid Act are inadequate to deal with benami transactions as the Act does not-(i) contain any specific provision for vesting of confiscated property with Central Government; (ii) have any provision for an appellate mechanism against an action taken by the authorities under the Act, while barring the jurisdiction of a civil court; (iii) confer the powers of the civil court upon the authorities for its implementation; and (iv) provide for adequate enabling rule making powers." Thus, the Act should be interpreted in a manner so as to punish only transactions that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;intention' and 'attempt' on the part of any of the petitioners. (ii) RE: KNOWINGLY ASSISTS OR KNOWINGLY IS A PARTY: In Joti Parshad v. State of Haryana 1993 Supp (2) SCC 497 the Hon'ble Supreme Court has held as follows- "5. Under the Indian penal law, guilt in respect of almost all the offences is fastened either on the ground of "intention" or "knowledge" or "reason to believe". We are now concerned with the expressions "knowledge" and "reason to believe". "Knowledge" is an awareness on the part of the person concerned indicating his state of mind. "Reason to believe" is another facet of the state of mind. "Reason to believe" is not the same thing as "suspicion" or "doubt" and mere seeing also cannot be equated to believing. "Reason to believe" is a higher level of state of mind. Likewise "knowledge" will be slightly on a higher plane than "reason to believe". A person can be supposed to know where there is a direct appeal to his senses and a person is presumed to have a reason to believe if he has sufficient cause to believe the same." (iii) Actually involved: If there is no direct/indirect involvement of any person or property with the proceeds of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lows: "An Act to prohibit the carrying of offensive weapons in public places without lawful authority or reasonable excuse." Parliament is there recognising the need for preventive justice where, by preventing the carriage of offensive weapons in a public place, it reduced the opportunity for the use of such weapons. I have no doubt that this was a worthy objective, and that the Act is an extremely important one. If, however, the prosecutor is right, the scope of section 1 goes far beyond the mischief aimed at, and in every case where an assault is committed with a weapon and in a public place an offence under the Act of 1953 can be charged in addition to the charge of assault. In such a case the additional count does nothing except add to the complexity of the case and the possibility of confusion of the jury. This has in fact occurred." (b) In R.M.D. Chamarbaugwalla v. Union of India AIR 1957 SC 628, a Constitution Bench of the Apex Court held: "6. If the question whether the Act applies also to prize competitions in which success depends to a substantial degree on skill is to be answered solely on a literal construction of Section 2 (d), it will be difficult to resist the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Province of Bombay. Section 7 of the Act provided that "a prize competition shall be deemed to be an unlawful prize competition unless a licence in respect of such competition has been obtained by the promoter thereof". Section 12 imposed a tax on the amounts received in respect of competitions which had been licensed under the Act. With a view to avoid the operation of the taxing provisions of this enactment, persons who had thereto before been conducting prize competitions within the Province of Bombay shifted the venue of their activities to neighbouring States like Mysore, and from there continued to receive entries and remittances of money therefor from the residents of Bombay State. In order to prevent evasion of the Act and for effectually carrying out its object, the legislature of Bombay passed Act 30 of 1952 extending the provisions of the Act of 1948 to competitions conducted outside the State of Bombay but operating inside it, the tax however being limited to the amounts remitted or due on the entries sent from the State of Bombay. The validity of this enactment was impugned by a number of promoters of prize competitions in proceedings by way of writ in the High Court o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing them. And if the State legislatures felt that there was any need to regulate even those competitions, they could have themselves effectively done so without resort to the special jurisdiction under Article 252(1). It should further be observed that the language of the resolutions is that it is desirable to control competitions. If it was intended that Parliament should legislate also on competitions involving skill, the word "control" would seem to be not appropriate. While control and regulation would be requisite in the case of gambling, mere regulation would have been sufficient as regards competitions involving skill. The use of the word "control" which is to be found not only in the resolution but also in the short title and the preamble to the Act appears to us to clearly indicate that it was only competitions of the character dealt with in the Bombay judgment, that were within the contemplation of the legislature. 35. In jurisprudence, the thumb rule is that the basic law on the subject to be applied for violation of the statute. No doubt, in the interest of the public and welfare of the society, the state is always welcome to bring the amendment in the existing law. Ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sdiction assumed under section 24 is invalid. 41. The facts of the present case are clear that the property was never held by the appellants. The amount received by them have returned/adjusted towards salaries. Even the question of any arrangement in the present case does not arise as the appellants have received only advance salary from the employer under oral contract at the asking of the respondent, the same was immediately returned. The said factual position has not been denied by the respondent. This is also not a case where the person providing the consideration was not traceable or fictitious. The admitted position is that the management/employer was very much traceable, his statement was recorded, the money returned by the appellants was dealt by the department. 42. The existence of the "benami" transaction has to be proved by the authorities i.e. the person who alleges the transaction (Sitaram Agarwal v. Subrata Chandra [2008] 7 SCC 716). The authorities have failed to discharge the burden of proof. The authority has purely gone on the premise that cash is transferred from one person to another, with an object to defeat ,demonetization. This is insufficient to establish ..... X X X X Extracts X X X X X X X X Extracts X X X X
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