The Income Tax Department (TN & P), Chennai has obtained its first conviction under the Prohibition of Benami Property Transactions Act 1988 as amended by Benami Transactions (Prohibition) Amendment Act, 2016 (Act No.43 of 2016) (PBPTA).  This is apart from the nine convictions obtained during the current financial year for offences under the Income Tax Act, 1961.

On being informed by the police authorities that one Shri Mohammed Bayasudeen was found in possession of cash of Rs.34,60,000/-, the Investigation Wing, Chennai conducted enquiries with the accused regarding the source of the cash found in his possession and recorded his statement.  The accused in his sworn statement stated that the seized cash does not belong to him but it was given to him by one Mr.Sultan Faumi.  However, he was unable to produce Mr.Sultan Faumi even after sufficient opportunities were provided to him.  Subsequently, the case was handed over to the Benami Unit functioning under the Principal Director of Income Tax (Investigation) for a thorough investigation.

After conducting enquiry in terms of section 24(4) of the PBPTA and on being satisfied that the cash found in possession of the accused fell under the category of benami transaction as defined under section 2(9)(D) of PBPTA an order u/s.24(4) of PBPTA was passed treating the seized cash as benami property and the accused as Benamidar.

A prosecution complaint for offence u/s.53 of the PBPTA was filed against Shri Mohammed Bayasudeen on 30.03.2022 before the Hon’ble Principal Sessions Judge, City Civil Court, Chennai which was later transferred and heard in the Court of the Principal Special Judge for CBI Cases, VIIIth Additional City Civil Court, Chennai.  The Hon’ble Principal Special Judge framed the charges after taking cognisance of the offence committed by the assessee.  Mrs. Sheela Bhandari, Special Public Prosecutor represented the Income Tax Department during the trial proceedings in the above case.

On examination of the facts of the case and evidences on record, the Hon’ble Principal Special Judge held that prosecution has proved beyond all reasonable doubt that the accused had entered into benami transaction as defined under section 2(9) PBPTA in order to defeat the provisions of section 4 of Income Tax Act, 1961 for which, he is liable to be punished under section 53 of the PBPTA.  The guilt of the accused has been proved by the prosecution beyond all reasonable doubt and therefore, the accused is liable to be convicted under section 53 of the Probibition of Benami Property Transactions amended Act, 2016.

In the result, the Principal Special Judge has passed order of judgment holding that the accused is convicted under section 248(2) of Cr.P.C for the offence under section 53 of the Benami Transactions (Prohibition) Amendment Act, 2016 (Act No.43 of 2016) and the accused is sentenced to undergo Rigorous Imprisonment for a period of 2 years (two years) and to pay fine amount of Rs.8,65,000/- (Rupees eight lakhs sixty five thousand only) and in default the accused shall undergo six months Simple Imprisonment consequently.

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