Mahaveer Lunia v. Assistant Commissioner Of Income Tax, (Benami Prohibition)And Initating Officer Under The Pbpt Act For The State Ofrajasthan, Jaipur Room No. Na

HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Civil Writ Petition No. 16732/2023 1. Alishan Complex Private Limited, Through Its Director Mr.Mukesh Kumar Lunia S/o Jawari Lal Lunia Aged About 46Mukesh Kumar Lunia S/o Jawari Lal Lunia Aged About 46 Years Residing At Moksh Main Mandor Road OppositeHotel Mapple Abhay Paota, Jodhpur.Hotel Mapple Abhay Paota, Jodhpur. 2. Mahaveer Lunia S/o Jawari Lal Lunia, Aged About 51Years, R/o At Moksh Main Mandor Road Opposite HotelMapple Abhay Paota, Jodhpur.Years, R/o At Moksh Main Mandor Road Opposite HotelMapple Abhay Paota, Jodhpur. ----Petitioners Versus Assistant Commissioner Of Income Tax, (Benami Prohibition)And Initating Officer Under The Pbpt Act For The State OfRajasthan, Jaipur Room No. Na 103, New Central RevenueBuilding, Bhagwan Das Road, Jaipur Rajasthan, 302005. ----Respondent Connected With D.B. Civil Writ Petition No. 14527/2023 1. Swagatama Enclave Private Limited, Through Its DirectorMr. Jawari Lal Lunia S/o Mr. Ghewar Lal Lunia Aged About75 Years, Residing At Moksh Main Mandor Road OppositeHotel Mapple Abhay Paota, JodhpurMr. Jawari Lal Lunia S/o Mr. Ghewar Lal Lunia Aged About75 Years, Residing At Moksh Main Mandor Road OppositeHotel Mapple Abhay Paota, Jodhpur 2. Mahaveer Lunia S/o Jawari Lal Lunia, Aged About 51Years, Residing At Moksh Main Mandor Road OppositeHotel Mapple Abhay Paota, JodhpurYears, Residing At Moksh Main Mandor Road OppositeHotel Mapple Abhay Paota, Jodhpur ----Petitioners Versus Assistant Commissioner Of Income Tax, (Benami Prohibition),And Initiating Officer Under The Pbpt Act For The State OfRajasthan, Jaipur, Room No. Na 103, New Central RevenueBuilding, Bhagwan Dass Road, Jaipur Rajasthan, 302005. ----Respondent D.B. Civil Writ Petition No. 15074/2023 1. Principle Dealer Pvt. Ltd. through its Director Mr JawariLal Lunia S/o Mr Ghewar Lunia aged about 75 years,residing at Moksh Main Mandor Road Opp. Hotel, MappleLal Lunia S/o Mr Ghewar Lunia aged about 75 years,residing at Moksh Main Mandor Road Opp. Hotel, Mapple Abhay Paota, Jaodhpur 2. Mahaveer Lunia S/o Jawari Lal Lunia, Aged About 51Years, Residing At Moksh Main Mandor Road OppositeHotel Mapple Abhay Paota, Jodhpur ----Petitioners Versus Assistant Commissioner Of Income Tax, (Benami Prohibition),And Initiating Officer Under The Pbpt Act For The State OfRajasthan, Jaipur, Room No. Na 103, New Central RevenueBuilding, Bhagwan Dass Road, Jaipur Rajasthan, 302005. ----Respondent For Petitioner(s) : Mr Sanjay Jhanwar, Sr. Advocateassisted by Mr Sanjay NaharMr Rajat Sharma (through VC)Mr Aryan Singh ChouhanMr Pushkar TaiminiFor Respondent(s): Mr K.K.BissaMr Har Govind Chanda HON'BLE MR. JUSTICE VIJAY BISHNOI HON'BLE MR. JUSTICE YOGENDRA KUMAR PUROHIT Judgment 12/12/2023 (PER HON’BLE VIJAY BISHNOI,J.) 1.Facts of all these cases are identical and common question oflaw is involved in these writ petitions, therefore, they are decidedtogether. For the sake of convenience, the facts of D.B.Civil WritPetition No.16732/2023 are taken into consideration foradjudication of these writ petitions. 2.The petitioner No.1 is a private limited company incorporatedunder the provisions of Companies Act, 1956, whereas thepetitioner No.2 is the Director of the petitioner No.1-company. 3.Notices under Section 19 of the Prohibition of BenamiProperty Transaction Act, 1988 (hereinafter referred to as ‘the HON'BLE MR. JUSTICE VIJAY BISHNOI HON'BLE MR. JUSTICE YOGENDRA KUMAR PUROHIT Judgment 12/12/2023 (PER HON’BLE VIJAY BISHNOI,J.) 1.Facts of all these cases are identical and common question oflaw is involved in these writ petitions, therefore, they are decidedtogether. For the sake of convenience, the facts of D.B.Civil WritPetition No.16732/2023 are taken into consideration foradjudication of these writ petitions. 2.The petitioner No.1 is a private limited company incorporatedunder the provisions of Companies Act, 1956, whereas thepetitioner No.2 is the Director of the petitioner No.1-company. 3.Notices under Section 19 of the Prohibition of BenamiProperty Transaction Act, 1988 (hereinafter referred to as ‘the PBPT Act’) was issued to the petitioners by the Initiating Officerand responses to the same were filed. Thereafter show causenotice under Section 24(1) and (2) of the PBPT Act was issued tothe petitioners by the respondents on 28.04.2023. On01.05.2023, order for provisional attachment of the property wasissued under Section 24(3) of the PBPT Act. On 28.07.2023, therespondents issued order for provisional attachment of theproperty under Section 24(4)(a)(i) of the PBPT Act till the passingof the order passed by the Adjudicating Authority under Section26(3) of the PBPT Act. Vide order dated 07.08.2023 (Annexure-14), the Initiating Authority made a reference to the AdjudicatingAuthority. 4.Under the above referred circumstances, the petitioners filedthis writ petition seeking following reliefs: “It is, therefore, most humbly prayed that thisHon’ble Court may kindly be pleased to:-Hon’ble Court may kindly be pleased to:- a.Issue writ in the nature of certiorari or anyotherappropriatewrit/order/directionquashing/nullifying the Respondent’s ImpugnedProvisional Attachment Order dated 01.05.2023and all consequential orders/referencesthereto;otherappropriatewrit/order/directionquashing/nullifying the Respondent’s ImpugnedProvisional Attachment Order dated 01.05.2023and all consequential orders/referencesthereto; b.Issue writ in the nature of certiorari or anyotherappropriatewrit/order/directionquashing/nullifying the Respondent’s ImpugnedAttachment Order dated 28.07.2023 andreference letter dated 07.08.2023 and allconsequential orders/notices issued by theRespondent;otherappropriatewrit/order/directionquashing/nullifying the Respondent’s ImpugnedAttachment Order dated 28.07.2023 andreference letter dated 07.08.2023 and allconsequential orders/notices issued by theRespondent; c.Issue writ in the nature of certiorari or anyotherappropriatewrit/order/directionquashing/nullifying the proceedings initiatedotherappropriatewrit/order/directionquashing/nullifying the proceedings initiated against the Petitioner No.1 including theImpugned Attachment Order and consequentproceedings thereto; d.Grant any other relief as deemed to be fit andproper under the facts and circumstances ofthe case.” 5.Assailing the validity of the impugned orders, learnedcounsel for the petitioners have argued that the show causenotice under Section 24(1) and (2) of the PBPT Act was issued tothe petitioners on 28.04.2023 asking them to submit theirresponse to the show cause notice up to 15.05.2023, however,without waiting for the reply of the petitioners, the provisionalattachment order under Section 24(3) of the PBPT Act wasissued on 01.05.2023. It is submitted that the said action of therespondents is violative of principles of natural justice and,therefore, the provisional attachment order is liable to bequashed and set aside. d.Grant any other relief as deemed to be fit andproper under the facts and circumstances ofthe case.” 5.Assailing the validity of the impugned orders, learnedcounsel for the petitioners have argued that the show causenotice under Section 24(1) and (2) of the PBPT Act was issued tothe petitioners on 28.04.2023 asking them to submit theirresponse to the show cause notice up to 15.05.2023, however,without waiting for the reply of the petitioners, the provisionalattachment order under Section 24(3) of the PBPT Act wasissued on 01.05.2023. It is submitted that the said action of therespondents is violative of principles of natural justice and,therefore, the provisional attachment order is liable to bequashed and set aside. 6.Learned counsel for the petitioners have further submittedthat as per Section 24(1) and (2) of the PBPT Act, if the InitiatingOfficer, on the basis of material in his possession, has reason tobelieve that a person is a Benamidar and other person isbeneficial owner in respect of the property, then only he may,after recording reasons in writing, issue a show cause notice tosuch persons. In the present case, the Initiating Officer hasfailed to record any reasons for initiating the impugnedproceedings against the petitioners and the said action of theInitiating Officer is, therefore, violative of the provisions of thePBPT Act as well as the violative of principles of natural justice. 7.Learned counsel for the petitioners have further submittedthat as per the circular dated 14.08.2019 issued by the CentralBoard of Direct Taxes, every communication issued by anyIncome Tax Authority should contain computer generatedDocument Identification Number (DIN), however, in the presentcase, the two impugned orders passed by the Initiating Officeron 28.07.2023 under Section 24(4) of PBPT Act do not containdifferent DIN. 8.Learned counsel for the petitioners have further submittedthat as per Section 24(4) of the PBPT Act, the Initiating Officer isrequired to issue the confirmation of provisional attachmentorder within a period of 90 days from the last date of the monthin which the show cause notice is issued. As per the same, theInitiating Officer was supposed to pass the order under Section24(4) of the PBPT Act till 29.07.2023, however, the InitiatingOfficer issued and uploaded two pages incomplete order dated28.07.2023 on the portal of the petitioner No.1 and thereafter on29.07.2023 issued the complete order under Section 24(4) of thePBPT Act, which was received by the petitioners only on31.07.2023. It is further submitted that from the above, it isclear that the order under Section 24(4) of the PBPT Act isbarred by limitation. 9.Learned counsel for the petitioners have further submittedthat despite repeated requests by the petitioners, no materialhas been supplied to them and no opportunity of personalhearing was provided before passing of the order under Section24(4) of the PBPT Act. 10.Learned counsel referring to the provisions of Section 2(9)(ii) of the PBPT Act, have argued that merely for the reason thatthe shareholders provide funds to the company for purchasingany property, it cannot be treated as Benami. It is further arguedthat the company owns such properties, which has beenpurchased through funds provided by its shareholders but thesaid property cannot be termed as a property of the shareholdersand directors of the company, though the shareholders ordirectors received benefits of owing the shares are the ultimatebeneficiaries of the income from such property. It is submittedthat if undisclosed income of a person has been brought to tax,the provisions of the income tax law are invoked. However, whenthe property of one person is held in another person to concealthe ownership of such property, PBPT Act is attracted. 11.Learned counsel have submitted that the entire premise ofshow cause notice, provisional attachment order and finalattachment order is that the petitioner-company is theBenamidar of its own shareholders, however, such assumption ofthe respondents is contrary to the specific provision of law andbeyond the scope of definition of Benami transaction. It issubmitted that the petitioner No.2 cannot be called beneficialowner of the immovable property purchased by the petitionerNo.1 within the meaning of PBPT Act. 12.It is argued that as per the exception provided underSection 2(9) of the PBPT Act, the transaction or arrangementcannot be called as a Benami transaction when the property isheld by a person standing in a fiduciary capacity for the benefit of another person towards whom he stands in such capacity. It issubmitted that the petitioner No.2 being the Director andshareholder of the petitioner No.1-company, even if providedfunds for purchase of the property in the name of petitionerNo.1, it cannot be held that the property purchased in the nameof petitioner No.1 is the property of petitioner No.2. In support ofthe above contention, learned counsel for the petitioners haveplaced reliance on a decision dated 06.10.2021 rendered by alearned Single Judge of this Court at Jaipur Bench in S.B.Civil Writ Petition No.11176/2020, M/s Shri Kalyan BuildingPvt. Ltd. through its Director and Ors. vs. The InitiatingOfficer and Anr. It is also argued that no proper opportunity ofhearing was provided by the respondents and the reply filed onbehalf of the petitioners to various show cause notices has notbeen taken into consideration in entirety. 13.It is also submitted that the written submissions filed bythe petitioners in respect of the judgment passed by this Court inM/s Shri Kalyan Building Pvt. Ltd. (supra) were not eventaken into consideration. Learned counsel for the petitionershave, therefore, argued that the provisional attachment order aswell as the order passed by the respondents under Section 24(4)of the PBPT Act and reference made by the respondents underSection 24(5) of the PBPT Act may kindly be quashed and setaside. 14.Reply to the writ petition is filed on behalf of therespondents and relying on the same, learned counsel for therespondents has argued that there is no illegality in passing the impugned orders as the same are passed after following dueprocedure laid down under the law, hence, no interference iscalled for. 15.Heard learned counsel for the parties. 16.For the convenience, the relevant provisions of the PBPTAct as amended are referred herein below: “2(9) “benami transaction” means,— (A) a transaction or an arrangement— (a) where a property is transferred to, or isheld by, a person, and the consideration forsuch property has been provided, or paid by,another person; and (b) the property is held for the immediate orfuture benefit, direct or indirect, of the personwho has provided the consideration, exceptwhen the property is held by— (i) a Karta, or a member of a Hindu undividedfamily, as the case may be, and the property isheld for his benefit or benefit of othermembers in the family and the considerationfor such property has been provided or paidout of the known sources of the Hinduundivided family; (ii) a person standing in a fiduciary capacityfor the benefit of another person towardswhom he stands in such capacity and includesa trustee, executor, partner, director of acompany, a depository or a participant as anagent of a depository under the DepositoriesAct, 1996 (22 of 1996) and any other personas may be notified by the Central Governmentfor this purpose; (iii) any person being an individual in thename of his spouse or in the name of anychild of such individual and the considerationfor such property has been provided or paidout of the known sources of the individual; (ii) a person standing in a fiduciary capacityfor the benefit of another person towardswhom he stands in such capacity and includesa trustee, executor, partner, director of acompany, a depository or a participant as anagent of a depository under the DepositoriesAct, 1996 (22 of 1996) and any other personas may be notified by the Central Governmentfor this purpose; (iii) any person being an individual in thename of his spouse or in the name of anychild of such individual and the considerationfor such property has been provided or paidout of the known sources of the individual; (iv) any person in the name of his brother orsister or lineal ascendant or descendant,where the names of brother or sister or linealascendant or descendant and the individualappear as joint-owners in any document, andthe consideration for such property has been provided or paid out of the known sources ofthe individual; or (B) a transaction or an arrangement in respectof a property carried out or made in a fictitiousname; or (C) a transaction or an arrangement in respectof a property where the owner of the propertyis not aware of, or, denies knowledge of, suchownership; (D) a transaction or an arrangement in respectof a property where the person providing theconsideration is not traceable or is fictitious; Explanation.—For the removal of doubts, it ishereby declared that benami transaction shallnot include any transaction involving theallowing of possession of any property to betaken or retained in part performance of acontract referred to in section 53A of theTransfer of Property Act, 1882 (4 of 1882), if,under any law for the time being in force,— (i) consideration for such property has beenprovided by the person to whom possession ofproperty has been allowed but the person whohas granted possession thereof continues tohold ownership of such property; (ii) stamp duty on such transaction orarrangement has been paid; and (iii) the contract has been registered. 24.Notice and attachment of propertyinvolved in benami transaction.—(1) Wherethe Initiating Officer, on the basis of materialin his possession, has reason to believe thatany person is a benamidar in respect of aproperty, he may, after recording reasons inwriting, issue a notice to the person to showcause within such time as may be specified inthe notice why the property should not betreated as benami property. (2) Where a notice under sub-section (1)specifies any property as being held by abenamidar referred to in that sub-section, acopy of the notice shall also be issued to thebeneficial owner if his identity is known. (3) Where the Initiating Officer is of theopinion that the person in possession of theproperty heldbenamimay alienate theproperty during the period specified in thenotice, he may, with the previous approval ofthe Approving Authority, by order in writing, attach provisionally the property in the manneras may be prescribed, for a period notexceeding ninety days [from the last day ofthe month in which the notice under sub-section (1) is issued.] (4) The Initiating Officer, after making suchinquires and calling for such reports orevidence as he deems fit and taking intoaccount all relevant materials, shall, within aperiod of ninety days [from the last day of themonth in which the notice under sub-section(1) is issued],— (a) where the provisional attachment has beenmade under sub-section (3),— (i) pass an order continuing the provisionalattachment of the property with the priorapproval of the Approving Authority, till thepassing of the order by the AdjudicatingAuthority under subsection (3) of section 26;or (ii) revoke the provisional attachment of theproperty with the prior approval of theApproving Authority; (b) where provisional attachment has not beenmade under sub-section (3),— (4) The Initiating Officer, after making suchinquires and calling for such reports orevidence as he deems fit and taking intoaccount all relevant materials, shall, within aperiod of ninety days [from the last day of themonth in which the notice under sub-section(1) is issued],— (a) where the provisional attachment has beenmade under sub-section (3),— (i) pass an order continuing the provisionalattachment of the property with the priorapproval of the Approving Authority, till thepassing of the order by the AdjudicatingAuthority under subsection (3) of section 26;or (ii) revoke the provisional attachment of theproperty with the prior approval of theApproving Authority; (b) where provisional attachment has not beenmade under sub-section (3),— (i) pass an order provisionally attaching theproperty with the prior approval of theApproving Authority, till the passing of theorder by the Adjudicating Authority under sub-section (3) of section 26; or (ii) decide not to attach the property asspecified in the notice, with the prior approvalof the Approving Authority. [Explanation.—For the purposes of this section,in computing the period of limitation, theperiod during which the proceeding is stayedby an order or injunction of any court shall beexcluded: Provided that where immediately after theexclusion of the aforesaid period, the period oflimitation referred to in sub-section (4)available to the Initiating Officer for passingorder of attachment is less than thirty days,such remaining period shall be deemed to beextended to thirty days: Provided further that where immediately afterthe exclusion of the aforesaid period, theperiod of limitation referred to in sub-section (5) available to the Initiating Officer to referthe order of attachment to AdjudicatingAuthority is less than seven days, suchremaining period shall be deemed to beextended to seven days.] (5) Where the Initiating Officer passes anorder continuing the provisional attachment ofthe property under sub-clause (i) of clause (a)of sub-section (4) or passes an orderprovisionally attaching the property under sub-clause (i) of clause (b) of that sub-section, heshall, within fifteen days from the date of theattachment, draw up a statement of the caseand refer it to the Adjudicating Authority. 26. Adjudication of benami property.—(1) On receipt of a reference under sub-section (5)of section 24, the Adjudicating Authority shallissue notice, to furnish such documents,particulars or evidence as is considerednecessary on a date to be specified therein, onthe following persons, namely:— (a) the person specified as a benamidartherein; (b) any person referred to as the beneficialowner therein or identified as such; (c) any interested party, including a bankingcompany; (d) any person who has made a claim inrespect of the property: Provided that the Adjudicating Authority shallissue notice within a period of thirty days fromthe date on which a reference has beenreceived: Provided further that the notice shall provide aperiod of not less than thirty days to theperson to whom the notice is issued to furnishthe information sought. (2) Where the property is held jointly by morethan one person, the Adjudicating Authorityshall make all endeavours to serve notice to allpersons holding the property: Provided that where the notice is served onanyone of the persons, the service of noticeshall not be invalid on the ground that the saidnotice was not served to all the personsholding the property. (3) The Adjudicating Authority shall, after— (a) considering the reply, if any, to the noticeissued under sub-section (1); (b) making or causing to be made suchinquiries and calling for such reports orevidence as it deems fit; and Provided further that the notice shall provide aperiod of not less than thirty days to theperson to whom the notice is issued to furnishthe information sought. (2) Where the property is held jointly by morethan one person, the Adjudicating Authorityshall make all endeavours to serve notice to allpersons holding the property: Provided that where the notice is served onanyone of the persons, the service of noticeshall not be invalid on the ground that the saidnotice was not served to all the personsholding the property. (3) The Adjudicating Authority shall, after— (a) considering the reply, if any, to the noticeissued under sub-section (1); (b) making or causing to be made suchinquiries and calling for such reports orevidence as it deems fit; and (c) taking into account all relevant materials,provide an opportunity of being heard to theperson specified as a benamidar therein, theInitiating Officer, and any other person whoclaims to be the owner of the property, and,thereafter, pass an order— (i) holding the property not to be a benamiproperty and revoking the attachment order;or (ii) holding the property to be a benamiproperty and confirming the attachment order,in all other cases. (4) Where the Adjudicating Authority issatisfied that some part of the properties inrespect of which reference has been made tohim is benami property, but is not able tospecifically identify such part, he shall record afinding to the best of his judgment as to whichpart of the properties is held benami. (5) Where in the course of proceedings beforeit, the Adjudicating Authority has reason tobelieve that a property, other than a propertyreferred to it by the Initiating Officer is benamiproperty, it shall provisionally attach theproperty and the property shall be deemed tobe a property referred to it on the date ofreceipt of the reference under sub-section (5)of section 24. (6) The Adjudicating Authority may, at anystage of the proceedings, either on theapplication of any party, or suo motu, strikeout the name of any party improperly joined oradd the name of any person whose presencebefore the Adjudicating Authority may benecessary to enable him to adjudicate uponand settle all the questions involved in thereference. (7) No order under sub-section (3) shall bepassed after the expiry of one year from theend of the month in which the reference undersub-section (5) of section 24 was received. [Explanation.—For the purposes of this sub-section, in computing the period of limitation,the period during which the proceeding is stayed by an order or injunction of any courtshall be excluded: Provided that where immediately after theexclusion of the aforesaid period, the period oflimitation available to the AdjudicatingAuthority for passing order is less than sixtydays, such remaining period shall be deemedto be extended to sixty days.] [Provided that where the time limit for passingorder under this sub-section expires during theperiod beginning from the 1st day of July,2021 and ending on the 29th day ofSeptember, 2021, the time limit for passingsuch order shall be extended to the 30th dayof September, 2021.] (8) The benamidar or any other person whoclaims to be the owner of the property mayeither appear in person or take the assistanceof an authorised representative of his choice topresent his case. Explanation.—For the purposes of sub-section(8), authorised representative means a personauthorised in writing, being— (i) a person related to the benamidar or suchother person in any manner, or a personregularly employed by the benamidar or suchother person as the case may be; or (ii) any officer of a scheduled bank with whichthe benamidar or such other person maintainsan account or has other regular dealings; or(iii) any legal practitioner who is entitled topractice in any civil court in India; or (8) The benamidar or any other person whoclaims to be the owner of the property mayeither appear in person or take the assistanceof an authorised representative of his choice topresent his case. Explanation.—For the purposes of sub-section(8), authorised representative means a personauthorised in writing, being— (i) a person related to the benamidar or suchother person in any manner, or a personregularly employed by the benamidar or suchother person as the case may be; or (ii) any officer of a scheduled bank with whichthe benamidar or such other person maintainsan account or has other regular dealings; or(iii) any legal practitioner who is entitled topractice in any civil court in India; or (iv) any person who has passed anyaccountancy examination recognised in thisbehalf by the Board; or (v) any person who has acquired sucheducational qualifications as the Board mayprescribe for this purpose.” 17.So far as argument of the learned counsel for the petitioners to the effect that the provisional attachment order passed by theInitiating Officer under Section 24(3) of the PBPT Act is illegal asthe petitioners were asked to submit response/reply to the noticeunder Section 24(1) and (2) of the PBPT Act up to 15.05.2023 but without waiting for reply, the Initiating Officer passed theprovisional attachment order on 01.05.2023 is concerned, frombare perusal of the provisions of Section 24 of the PBPT Act, it isclear that the Initiating Officer is not required to wait or considerthe response/reply filed pursuant to the notice under Section24(1) & (2) of the PBPT Act before passing the provisionalattachment order. The only requirement for the Initiating Officeris to seek approval of the approving authority before passing theprovisional attachment order under Section 24(3) of the PBPT Actand from the provisional attachment order dated 01.05.2023, it isclear that prior approval of the approving authority was obtainedby the Initiating Officer. Hence, the said argument of the learnedcounsel for the petitioner being bereft of merits is rejected.18.So far as argument of the learned counsel for the petitionersthat the Initiating Officer, at the time of issuance of show causenotice under Section 24(1) & (2) of the PBPT Act, did not recordany reason to believe, is concerned, it is to be noticed that theInitiating Officer in the show cause notice dated 28.04.2023 hasspecifically recorded the reasons to believe in para 13.3, whichreads as under: “13.3.In view of the evidence on record,material in possession and facts discussed inforegoing paras, the undersigned as Initiating Officerhas reasons to believe that :-material in possession and facts discussed inforegoing paras, the undersigned as Initiating Officerhas reasons to believe that :- 1. The transactions carried out by Sh. MahaveerLunia in the form of making payments to theseller(s) which was routed through Sh. AnilSanklecha, CA as discussed above for makingpurchase of the said lands/immovable propertiesin your name as mentioned in the Annexure-Aare “Benami Transactions” within the meaning ofSection 2(9)(A) of the PBPT Act;Lunia in the form of making payments to theseller(s) which was routed through Sh. AnilSanklecha, CA as discussed above for makingpurchase of the said lands/immovable propertiesin your name as mentioned in the Annexure-Aare “Benami Transactions” within the meaning ofSection 2(9)(A) of the PBPT Act; 2. The said lands/immovable properties are “BenamiProperty” within the meaning of Section 2(8) ofthe PBPT Act;Property” within the meaning of Section 2(8) ofthe PBPT Act; 3. In terms of the provisions Section 2(10) of thePBPT Act, you are the “Benamidar” of thesebenami properties; andPBPT Act, you are the “Benamidar” of thesebenami properties; and 2. The said lands/immovable properties are “BenamiProperty” within the meaning of Section 2(8) ofthe PBPT Act;Property” within the meaning of Section 2(8) ofthe PBPT Act; 3. In terms of the provisions Section 2(10) of thePBPT Act, you are the “Benamidar” of thesebenami properties; andPBPT Act, you are the “Benamidar” of thesebenami properties; and 4. In terms of the provisions Section 2(12) of thePBPT Act, Sh. Mahaveer Lunia is the “BeneficialOwner” of these benami properties mentioned inthe Annexure-A.”PBPT Act, Sh. Mahaveer Lunia is the “BeneficialOwner” of these benami properties mentioned inthe Annexure-A.” .In such circumstances, we do not find any merit in theabove argument of the learned counsel for the petitioners. 19.The other contention of the petitioner that the order underSection 24(4) of the PBPT Act has been passed by the InitiatingOfficer beyond the period of limitation is also without any meritbecause from the bare look of 2 pages order dated 28.07.2023and 61 pages order dated 28.07.2023, annexed with the writpetition as Annexure-13, it is clear that both contain the sameDIN and as such we are of the opinion that both the orders dated28.07.2023 are one and the same document. Otherwise also, thesaid objection of the petitioners is technical in nature and cannotbe appreciated at this stage. 20.The other contention of the learned counsel for thepetitioners that no material was supplied to the petitionersdespite repeated requests is also bereft of any merit becausefrom bare look of notice under Section 24(1) of the PBPT Act, itis clear that whatever the relevant material relied upon by theInitiating Officer is clearly mentioned in the show cause noticeitself. 21.Another contention of the learned counsel for thepetitioners that the petitioners were not provided opportunity of personal hearing is concerned, from the order dated 28.07.2023,it is clear that vide show cause notice dated 03.07.2023, thepetitioner No.2 was asked to remain present for personal hearingbefore the Initiating Officer on 11.07.2023, however, when thepetitioner No.2 failed to appear in person on that day, again anopportunity of personal hearing was provided to him and he wasasked to remain present for personal hearing on 19.07.2023 butit appears that the petitioner No.2 did not avail the saidopportunity. 22.So far as contention of the learned counsel for thepetitioners that as per exception (ii) to Section 2(9) of the PBPTAct, a property cannot be treated as Benami merely for thereason that shareholder provided funds to the company forpurchasing any property is concerned, we are of the view that nodoubt the funds provided by the shareholders form the capital of a company and if from the said capital, any property ispurchased in the name of the company, certainly it cannot betreated as Benami, however, if a property is purchased in thename of the company but not from company’s funds or its capitalthen the situation would be different. 23.Section 2(9)(A)(a) of the PBPT Act provides that where aproperty is transferred or held by a person and the considerationfor such property is paid by another person, then the saidtransaction means Benami transaction. 24.The stand of the respondents is that the petitioner-company is a shell company, however, immovable properties arepurchased in its name not from company’s funds or its capital but from the funds made available by the petitioner No.2 fromthe income earned through other businesses. 25.The Initiating Officer, after taking into consideration thematerial available with it and the response filed on behalf of thepetitioners, recorded its prima facie opinion in the order dated28.07.2023 passed under Section 24(3) of PBPT Act. The relevant portion of the order dated 28.07.2023 is reproduced asunder: “16.From the discussion made in the aforementionedparagraphs, it is clearly established that:-paragraphs, it is clearly established that:- 24.The stand of the respondents is that the petitioner-company is a shell company, however, immovable properties arepurchased in its name not from company’s funds or its capital but from the funds made available by the petitioner No.2 fromthe income earned through other businesses. 25.The Initiating Officer, after taking into consideration thematerial available with it and the response filed on behalf of thepetitioners, recorded its prima facie opinion in the order dated28.07.2023 passed under Section 24(3) of PBPT Act. The relevant portion of the order dated 28.07.2023 is reproduced asunder: “16.From the discussion made in the aforementionedparagraphs, it is clearly established that:-paragraphs, it is clearly established that:- i.The Benamidar company was previously controlled and ownedby entry operators of Kolkata and Mumbai. The company is ashell company/paper company which has been used forproviding accommodation/bogus entries in lieu of cashpayment.by entry operators of Kolkata and Mumbai. The company is ashell company/paper company which has been used forproviding accommodation/bogus entries in lieu of cashpayment. ii.The company was not having real worth as well ascreditworthiness to purchase the said lands/immovableproperties by way of of making such investment on itscreditworthiness to purchase the said lands/immovableproperties by way of of making such investment on its own. iii.There is no significant changes in financial position/statusof the company before and after acquisition of thecompany by the Lunia family.of the company before and after acquisition of thecompany by the Lunia family. iv.Sh. Mahaveer Lunia and his family members are having fullcontrol and management of the company since F.Y. 2016-17(from the date of transfer of shares of these companies in theirown names or in the name of the other companies whereinthey are holding 100% share). Thus, since F.Y. 2016-17 thecompany is controlled & managed by Sh. Mahaveer Lunia andhis family members.control and management of the company since F.Y. 2016-17(from the date of transfer of shares of these companies in theirown names or in the name of the other companies whereinthey are holding 100% share). Thus, since F.Y. 2016-17 thecompany is controlled & managed by Sh. Mahaveer Lunia andhis family members. v.The cash transactions carried out through Hawala/Angadiabetween Shri Mahaveer Lunia and Shri Anil Sankhlecha duringF.Y. 2017-18 and 2018-19 were routed in the company andultimately used for making purchase of the saidlands/immovable properties in the name of M/s AlishanComplex Pvt. Ltd.between Shri Mahaveer Lunia and Shri Anil Sankhlecha duringF.Y. 2017-18 and 2018-19 were routed in the company andultimately used for making purchase of the saidlands/immovable properties in the name of M/s AlishanComplex Pvt. Ltd. 17. In view of the above-mentioned facts, material available onrecords and reasons to believe, it is evident that the provisions ofrecords and reasons to believe, it is evident that the provisions of Section 2(9)(A) of the BPT Act, 1988 are squarely applicable in this case. For ready reference, the provisions of Section 2(9)(A) of the PBPT Act, 1988 are reproduced here under " (A) Benami transactions means : A transaction or an arrangement (a)Where a property is transferred to, or is held by, a person, and the consideration for such property has been provided, or paid by, another person; and (b)The property is held for the immediate or future benefit, direct or indirect, of the person who has provided theconsideration." 18.As per the definition of "benami transaction' in Section 2(9)(A) of the BPT Act, 1988 a benami transaction requires the following three conditions to be fulfilled, which were seen fulfilled in light ofthe facts & circumstances of the instant case :- Section 2(9)(A) of the BPT Act, 1988 are squarely applicable in this case. For ready reference, the provisions of Section 2(9)(A) of the PBPT Act, 1988 are reproduced here under " (A) Benami transactions means : A transaction or an arrangement (a)Where a property is transferred to, or is held by, a person, and the consideration for such property has been provided, or paid by, another person; and (b)The property is held for the immediate or future benefit, direct or indirect, of the person who has provided theconsideration." 18.As per the definition of "benami transaction' in Section 2(9)(A) of the BPT Act, 1988 a benami transaction requires the following three conditions to be fulfilled, which were seen fulfilled in light ofthe facts & circumstances of the instant case :- 19.Further, the Hon'ble Supreme Court has concluded afterconsidering its earlier judgment in the case of Valliammal vs.Subramaniam (2004) 7 SSC 233 that while considering whether aparticular transaction is benami in nature, the six circumstances canbe taken as a guide. These six circumstances are discussed belowto show that how these are fulfilled in the instant case:- CONCLUSION : 20.In view of the above facts, evidences on record and abovereasons to believe, as discussed in detail in the foregoing paras, I amof the considered view that the said lands/ immovable propertiesmentioned in Annexure-Apurchased in the name of M/s Alishan Complex Pvt. Ltd., are "Benami Property" within the meaning ofSection 2(8) of the PBPT Act, 1988 ; 20.1 The transactions carried out by Sh. Mahaveer Lunia S/o Sh.Jawari Lal Lunia (PAN : ) in the form of providingconsideration which was routed by Sh. Anil Sankhlecha, CA to thesellers for making purchases of the said lands/immovable propertiesin the name of M/s Alishan Complex Pvt. Ltd. are "BenamiTransaction" within the meaning of Section 2(9)(A) of the PBPT Act,1988. 20.2 M/s Alishan Complex Pvt. Ltd., is the "Benamidar" of the saidlands/immovable properties in terms of the provisions of Section 2(10)of the PBPT Act, 1988 and Sh. Mahaveer Lunia S/o Sh. Jawari LalLunia is the "Beneficial Owner" of these benami properties in terms ofthe provisions of Section 2(12) of the PBPT Act, 1988. Therefore, thebenami properties mentioned in Annexure-Aare liable to beconfiscated as per the provisions of the PBPT Act, 1988 being benamiproperties.” 26.Having gone through the above reasons recorded by theInitiating Officer, we are of the opinion that submissions oflearned counsel for the petitioners referring to Section 2(9) of thePBPT Act are without any basis, hence rejected. 27.The judgment rendered in M/s Shri Kalyan Building’s case(supra) is of little help to the petitioners because in thatcase the petitioners approached this Court after passing of theorder by the adjudicating authority under Section 26(3) of thePBPT Act and the appellate tribunal, where the petitioners hadremedy to prefer appeal, was not functional, however, no suchsituation exists in the present case. Apart from that, the findingsrecorded by the learned Single Judge in M/s Shri KalyanBuilding’s case is based on that facts and, therefore, the sameare not binding. 28.As per the provisions of Section 24 of the PBPT Act, theInitiating Officer is required to record its prima facie satisfactionbefore referring the matter to the adjudicating authority.Considering the provisions of Section 24 of the PBPT Act, theDivision Bench of Madras High Court in Dinesh Chand SuranaVs. Deputy Commissioner of Income Tax (BenamiProhibition) Chennai & Ors., 2022 0 Supreme (Mad) 3397 held as under: 28.As per the provisions of Section 24 of the PBPT Act, theInitiating Officer is required to record its prima facie satisfactionbefore referring the matter to the adjudicating authority.Considering the provisions of Section 24 of the PBPT Act, theDivision Bench of Madras High Court in Dinesh Chand SuranaVs. Deputy Commissioner of Income Tax (BenamiProhibition) Chennai & Ors., 2022 0 Supreme (Mad) 3397 held as under: “15. That part, it is important to note that the proceedingsunder section 24 only require a recording of prima facieopinion as to the benami nature of the transaction and therespondent is required to furnish the documents, particularsor evidence and provide an opportunity of being heard to theappellants only at the stage of adjudication proceedings.” 29.The Division Bench of M.P. High Court in Abhay Nigam &Ors. vs. Union of India & Ors., 2021 0 Supreme (MP) 399 held as under: “15. The matter may be viewed from another angle. TheProhibition of Benami Property Transactions of 1988 (Act of1988) u/S. 24(3) provides power of provisional attachment.The said provisional attachment needs to be confirmed by the"adjudicating authority" u/S. 26 of the said Act. In WP No.10280/2017 (Kailash Asudani Vs. Commissioner of IncomeTax) the petitioner assailed the provisional attachment orderon the ground that the property in question was not a benamiproperty and without proper application of mind and inabsence of adequate material, the order of provisionalattachment was passed. This Court declined interference byholding that:- "The order impugned is provisional/tentative in nature. It issubject to judicial review by adjudicating authority. If order ofadjudicating authority goes against the petitioner, the furtherforums of judicial review of said order is available to thepetitioner before the appellate tribunal and then before thisCourt. Hence, against the tentative/provisional order, nointerference is warranted by this court at this stage. As per thescheme of the Act, the petitioner can raise all possiblegrounds before the adjudicating authority. The adjudicatingsubject to judicial review by adjudicating authority. If order ofadjudicating authority goes against the petitioner, the furtherforums of judicial review of said order is available to thepetitioner before the appellate tribunal and then before thisCourt. Hence, against the tentative/provisional order, nointerference is warranted by this court at this stage. As per thescheme of the Act, the petitioner can raise all possiblegrounds before the adjudicating authority. The adjudicating authority is best suited and statutorily obliged to consider allrelevant aspects. Thus, at this stage no case is made out forinterference." (Emphasis supplied) 16. This order of writ court was unsuccessfully challenged bypetitioner therein by filing WA No. 704/2017. The divisionbench