Lord Jagannath Eastcon Pvt. Ltd. Vs Initiating Officer (Appellate Tribunal Under SAFEMA Delhi)
Pre-2016 Transfer Still Benami if Property ‘Held’ Post-Amendment: SAFEMA Tribunal Upholds Attachment
The Appellate Tribunal under SAFEMA, New Delhi in M/s Lord Jagannath Eastcon Pvt. Ltd. vs. Initiating Officer, BPU, Bhubaneswar (FPA-PBPT-2589/BBS/2023, final order dated 10-12-2025) dismissed the appeal and upheld provisional attachment, holding that a benami transaction is made out even if the transfer took place prior to the 2016 amendment, provided the property continued to be “held” by the benamidar after the amendment.
The case involved purchase of land in the name of Mr. Bidya Dhar Mallick (benamidar), while entire consideration of ₹56.55 lakh was admittedly paid by Mr. Babu Singh, the beneficial owner, who later caused the property to be transferred for the benefit of M/s Lord Jagannath Eastcon Pvt. Ltd., a company under his control. The explanation that land was purchased in the name of Scheduled Caste persons due to local legal constraints was rejected as a clear indicator of benami structuring.
The Tribunal rejected the technical objection that provisional attachment u/s 24(3) was invalid because the order was passed by a JCIT, holding that the officer was administratively directed by CBDT to discharge functions of DCIT, which is permissible and does not violate the Act. Section 59 was held inapplicable to routine administrative control.
On applicability of the 2016 amendment, the Tribunal followed its own detailed reasoning in Prism Scan Express Pvt. Ltd., holding that Section 2(9)(A) has two limbs — “transfer” and “held”. Even if the transfer occurred prior to 01-11-2016, continued holding of property post-amendment by a benamidar squarely attracts the amended law. The plea that amended provisions are purely prospective was thus rejected.
The Tribunal further held that once a property is found to be benami, any subsequent transfer is hit by Section 6, and transfer to a company controlled by the beneficial owner does not cleanse the taint. The plea of fiduciary exception was also rejected, as the transaction was clearly structured to circumvent statutory restrictions and retain beneficial ownership.
Accordingly, finding overwhelming evidence of payment by beneficial owner, lack of means of benamidar, and ultimate benefit to the appellant-company, the Tribunal upheld the attachment and dismissed the appeal, reaffirming that benami law targets substance over form and cannot be defeated by timing or layering of transfers.
FULL TEXT OF THE JUDGMENT APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI
This appeal has been filed to challenge the order dated 30.03.2023 passed by the Adjudicating Authority confirming the provisional attachment and answering the references sent by the Initiating Officer.
