Vittal Sait Popat Vs ACIT (BPU) (Kerala High Court)
Summary : The Kerala High Court examined whether the issuance of show-cause notices under Section 24(1) of the Prohibition of Benami Property Transactions Act, 1988 (PBPT Act) against the petitioners, who had already disclosed income and paid tax under the Income Tax Act, 1961, was valid. The petitioners challenged the notices (Exts. P10 and P11) on the grounds that there was no adequate material to justify proceedings under the PBPT Act and that their disclosure of income and tax payment should preclude further inquiry.
The case arose when the police at Thrithala seized ₹88,77,000 in cash from the second petitioner on May 9, 2019. The police registered a criminal case, and the Income Tax Department issued summons under Section 131, seeking an explanation and supporting documents. The petitioners submitted a joint affidavit stating that the amount represented sale proceeds from gold sold at Coimbatore and later reflected this amount as “cash in hand” in their revised income tax returns for the assessment year 2019–2020. Despite these disclosures, the Initiating Officer issued notices under Section 24(1) of the PBPT Act, directing the petitioners to explain why the cash should not be treated as benami property.
