Approval Before Section 24(1) Notice Invalidates Benami Attachment: SAFEMA

Ashesh Nanalal Doshi Vs Initiating Officer (Appellate Tribunal under SAFEMA, New Delhi)

Approval Obtained Before Section 24(1) Notice Vitiates Benami Attachment—Statutory Sequence Cannot Be Reversed: SAFEMA Tribunal

The Prohibition of Benami Property Transactions Act, 1988 prescribes a specific statutory sequence for notice and provisional attachment of property alleged to be benami. In the present case, the Appellate Tribunal under SAFEMA quashed the attachment of jewellery worth approximately ₹1.07 crore, holding that approval obtained from the Approving Authority before issuing the show-cause notice under Section 24(1) was contrary to the mandatory statutory procedure.

The Income-tax Department had conducted a search on December 3, 2021 at Sumangal Safe Deposit Vault LLP, where jewellery valued at ₹1,07,33,434 was found in Locker No. F-727 registered in the name of Parth Yoginbhai Patel. In his statement under Section 132(4) of the Income-tax Act, Parth stated that the locker had been opened on the instructions of his employer, Prarambh Shah, and that the jewellery belonged to Ashesh Nanalal Doshi. Ashesh Doshi, a partner of Sumangal Safe Deposit Vault LLP, subsequently stated that the jewellery was family jewellery handed over to his son-in-law, Prarambh Shah, who kept it in the locker registered in the name of his employee, Parth Patel. The Initiating Officer treated the jewellery as benami property and passed a provisional attachment order, which was confirmed by the Adjudicating Authority on May 1, 2023.