Arpit Jagga Vs DCIT (Allahabad High Court)
The Allahabad High Court has issued a stay on proceedings initiated under Section 24 of the Prohibition of Benami Property Transactions Act, 1988, against Arpit Jagga. The petitioner, Arpit Jagga, challenged the notice, arguing that it was issued without jurisdiction. The primary contention is that the same amount of cash, which is the subject of the benami proceedings, has already undergone assessment under Section 69 of the Income Tax Act, 1961. This suggests a potential overlap or double jeopardy, where the tax authorities are pursuing two different legal avenues for the same financial matter. The petitioner’s counsel emphasized that once an income is assessed under the Income Tax Act, applying the Benami Act to the same amount of cash might be procedurally incorrect.
Furthermore, the petitioner argued that cash itself does not fall within the definition of “benami transaction” as per Section 2(9) of the Benami Act. The Act typically defines benami transactions in relation to property held by one person for the benefit of another, implying tangible or intangible assets that can be formally owned or transferred. The core argument here is that liquid cash, by its nature, may not fit this definition. Additionally, the petitioner’s counsel highlighted that since the respondent’s case appears to be that the cash belongs to the petitioner, the petitioner would not qualify as a “benamidar” under Section 2(10) of the Act. A benamidar is defined as the person in whose name the benami property is held, or a person who allows their name to be used for such a transaction. If the cash is asserted to be the petitioner’s own, the fundamental premise of a benami transaction, involving a beneficial owner and a benamidar, would be absent. The High Court acknowledged that the “matter requires consideration” and has requested a counter-affidavit from the respondents by the next hearing date, scheduled for August 4, 2025. In the interim, all further proceedings pursuant to the notice dated February 25, 2025, have been stayed.
