Refrain from relying on benami proceedings against Satyendar Jain: Delhi HC directs Income Tax Department

The petitioner’s counsel referred to the Supreme Court judgment in the Union of India vs Ganpati Dealcom Private Limited which held that the new Benami Transactions Prohibition Amendment Act, 2016, will have a prospective effect.

He referred to paragraph 18 of the judgment which reads…”e) Concerned authorities cannot initiate or continue criminal prosecution or confiscation proceedings for transactions entered into prior to the coming into force of the 2016 Act, viz., 25.10.2016. As a consequence of the above declaration, all such prosecutions or confiscation proceedings shall stand quashed.”

“We are concerned about two things; we don’t want this to continue because the Supreme Court order says quashed, and two we don’t want this to be used in collateral proceedings against us..,” he submitted.

The High Court after hearing the parties observed, “The writ petitions state that in view of India UOI v Ganpati Dealcom Pvt. Ltd., the proceedings qua the writ petition needs to be allowed and all prosecutions should be quashed…”

The High Court observed the Income Tax department’s standing counsel had submitted that the Additional Solicitor General leading him in the matter was unavailable and the matter was at his request renotified for November.

The High Court, however, clarified that the respondent had in another connected matter already been directed not to take any coercive action against the petitioner under the Benami Transactions Prohibition Amendment Act and the petitioner was “adequately protected”.

As the petitioner’s counsel submitted that the “factum of present proceedings are being used in other collateral proceedings”, the High Court directed that “since prima facie the observation of the Hon’ble Supreme Court are applicable to the facts of the present proceeding…the respondent shall not rely upon the impugned order…in other collateral proceedings…”

The matter will be next heard on November 25.

In a connected matter pertaining to pleas challenging proceedings initiated against the petitioner under the Benami Transactions Prohibition Amendment Act, 2016, on September 20, the High Court had held that no coercive steps would be taken by the authorities against Jain under the amended Act.