Benami Property: Calcutta High Court Refuses to Quash Notice 

Aachman Marketing Private Limited & Anr. Vs DCIT (Calcutta High Court)

In a significant judgment, the Calcutta High Court has refused to quash a show-cause-notice under Section 24 of the Prohibition of Benami Property Transaction Act, 1988. The case, Aachman Marketing Private Limited & Anr. Vs DCIT, revolved around a notice issued to the petitioners regarding a property transaction. Instead of quashing the notice, the High Court has allowed an extension for the filing of objections and has permitted a re-hearing.

The petitioners challenged the impugned show-cause-notice based on jurisdictional grounds, invoking a Supreme Court decision for their defense. However, the petitioners did not avail the opportunity for a hearing, and filed the writ petition after the expiry of the date of filing a reply to the impugned show-cause-notice. The Court, taking into account the circumstances of the case, allowed an extension for filing an objection/response to the notice. Moreover, the Court directed the respondent authority to consider the objections in accordance with the law and to pass a reasoned order. The Court also extended the opportunity to the petitioners to challenge the final order, if they feel aggrieved.

This judgment of the Calcutta High Court represents a crucial balancing act between the rights of the petitioners and the need to uphold the law. The Court’s decision to permit a re-hearing and extend the time for filing objections illustrates its commitment to ensuring due process and fairness in legal proceedings. Further developments in this case may provide deeper insights into the application of the Prohibition of Benami Property Transaction Act.

FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT

Heard learned Advocates appearing for the parties.

By this writ petition, petitioners have challenged the impugned show-cause-notice dated 30t^h May, 2023, under Section 24 of the Prohibition of Behami Property Transaction Act, 1988 by which petitioners were asked to give reply to the same within 15 days from the date of receipt of the said show-cause-notice and a date of hearing was also fixed on 9^th June, 2023, which the petitioners did not avail and filed this writ petition on 28t^h June, 2023, after expiry of the date of filing of such reply to the impugned show-cause-notice and after the expiry of the date of hearing. Petitioners are challenging the impugned show-cause-notice on the ground of jurisdiction of the respondent authority concerned and petitioners rely on a decision of the Hon’ble Supreme Court in the case of Union of India vs. Ganpati Dealcom (P.) Ltd. reported in (2022) 141 taxmann. com 389 (SC). The allegation of the respondent authority is that the petitioners have invested in immovable property by purchasing the same registered on 14^th August, 2017 amounting to Rs. 2,75,34,720/- though Mr. Mazumder, learned senior Advocate appearing for the petitioners submits that the alleged transaction against which the impugned show-cause-notice has been issued relates back to the financial year 2014-15.

Considering the facts and circumstances of the case I am not inclined to interfere with the impugned show-cause-notice at this stage and extending the time to file objection/response to the aforesaid impugned show-cause-notice by a period of two weeks from date and the respondents authority concerned shall consider the same in accordance with law and pass a reasoned and speaking order after giving an opportunity of hearing to the petitioners of its authorised representative and shall also consider the applicability of the aforesaid judgment of the Hon’ble Supreme Court, namely Union of India vs. Ganpati Dealcom (P.) Ltd.(supra) and such final order on the impugned show-cause-notice will be passed by the respondents authority concerned within a period of four weeks form the date of receipt of such objection/response and the order so passed shall not be given effect to for a period of two weeks from the date of service of the same on the petitioners and the petitioners will be at liberty to challenge the same, if so aggrieved in accordance with law.

With this observation and direction this writ petition being WPA 15408 of 2023 is disposed of.