Madras High Court
Pyari Ben (Deceased) vs The Appellate Tribunal For on 31 January, 2025
Author: S.M.Subramaniam
Bench: S.M.Subramaniam
W.P.Nos.3966 & 5639 of 2000
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Reserved on : 27.01.2025
Pronounced on : 31.01.2025
CORAM:
THE HONOURABLE MR.JUSTICE S.M.SUBRAMANIAM
and
THE HONOURABLE MR.JUSTICE M.JOTHIRAMAN
W.P.Nos.3966 & 5639 of 2000
and W.M.P.Nos.6124 & 8549 of 2000
1. Pyari Ben (Deceased)
2. A.Shan Ben
3. Jarina Begum
4. Parveen Begum ...Petitioners in both WP's
(P2 cause title amended as per order (Memo filed dated 27.12.2024 in
URS No.797 of 2025) dated 22.01.2025 in W.P.No5639 of 2000 by
SMSJ and MJRJ)
(P2 to P4 are substituted as LR'S of Deceased P1, As per Order (Memo
filed dated 27.12.2024 in USR 796 & 797 of 2025) Dated 22.01.2025 in
W.P.Nos.3966 & 5639 of 2000 by SMSJ and MJRJ)
-vs-
1.The Appellate Tribunal for
Forfeited Property,
'C' Wing, Lok Nayak Bhavan,
Khan Market, New Delhi.
2.The Competent Authority,
SAFEM (FOP) & NDPS Act,
Utsav Buildings,
No.64/1, G.N.Chetty Street,
T.Nagar, Chennai 600 017.
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W.P.Nos.3966 & 5639 of 2000
...Respondents in both WP's
PRAYER in W.P.No.3966 of 2000: Writ petition filed under Article
226 of Constitution of India to issue a Writ of Certiorari, calling for the
records of the first respondent passed in F.P.A.No.48/MDS/95 dated
29.11.1999 and quash the same.
PRAYER in W.P.No.5639 of 2000: Writ petition filed under Article
226 of Constitution of India to issue a Writ of Certiorari, calling for the
records of the first respondent passed in F.P.A.No.49/MDS/95 dated
29.11.1999 and quash the same.
For Petitioners : Mr.B.Kumar, Senior Counsel
in both WP's for Mr.V.Ramesh
For Respondents : Mr.ARL.Sundaresan,
in both WP's Additional Solicitor General of India
Assisted by Mr.Prasad Vijayakumar,
Senior Panel Counsel
COMMON ORDER
(The Order of the Court made by Justice M.JOTHIRAMAN)
These petitions have been filed to calling for the records of the
first respondent passed in F.P.A.Nos.48 & 49/MDS/95 dated 29.11.1999
and quash the same. The unsuccessful appellants before the Tribunal
have preferred these writ petitions before this Court. Since the issues
involved for the present writ petitions are one and the same and hence
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both the writ petitions were heard together and disposed of by this
common order. Pending writ petitions, the petitioner died and her legal
heirs were substituted as parties.
2. The case of the petitioners is as follows:
The deceased first petitioner's husband late Sri.R.Yusuf Khan was
arrested and detained under the provisions of maintenance of Internal
Security Act and thereafter the first petitioner's husband was arrested
under the provisions of Conservation of Foreign Exchange and
Prevention of Smuggling Activities by an order dated 05.02.1976. The
competent authority issued a notice dated 21.01.1978 under Section 6(1)
of the Smugglers and Foreign Exchange Manipulators (Forfeiture of
Property) Act, 1976 (hereinafter referred as SAFEMA). Calling her
husband to show cause why the following items of property should not
be forfeited to the Central Government:
A. Held in the name of Yusuf Khan:
(i) House property at Door No.19, Nadu-Swankara Street, Trichy.
(ii) House property at Door NO.24-A, Nadu-Allimal Street, Trichy.
(iii) Right, title and interest in the firm, M/s.Basha Jewellery,
No.178, Big Bazar Street, Trichy including the capital and current
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accounts as on 31.03.1976.
B. Held in the name of Pyari Ben:
(iv) House property at Door No.8, Swankara Street, Trichy.
(v) Land in Survey No.32/2 and 189/1, Thiruverumbur.
2(i). The deceased first petitioner's husband challenged of
SAFEMA and the detention in W.P.No.3098 of 1978 and obtained stay
of further proceedings. However, the validity of the Act was upheld by
the Hon'ble Supreme Court. The petitioner submitted detailed objection
to the notices, the property bearing Door No.19, Nadu Swankara Street,
Trichy was purchased on 07.10.1958 by the deceased first petitioner's
husband for a sum of Rs.7,500/-. He was carrying on business in
artificial diamond jewellery from 1942 onwards. The competent
authority failed to consider that it was not possible in 1977 to produce
the accounts from the year 1942 when the business was established to the
year 1958 when the property was purchased.
2(ii). As far as the property bearing Door No.24-A, Allimal Street
was concerned, it was explained and it was purchased for Rs.7,675/-
including stamp charges by a sale deed dated 25.12.1967. The Income
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Tax Proceedings were submitted before the competent authority. The
deceased first petitioner's husband explained that the property was
purchased out of the income declared in the return for the assessment
year 1968-69 in which a sum of Rs.11,850/- was shown as income. It
may also pertinent to note that a loan of Rs.4,250/- had been taken and a
loan of Rs.7,000/- on the mortgage of the property to one
Smt.Sivakumari Ammal.
2(iii). Insofar as the fourth item of property bearing Door No.8,
Swankara Street, Trichy was concerned, the petitioner had purchased the
same on 12.02.1965 for a sum of Rs.5,000/-. The petitioner had saved
Rs.3,000/- from out of earnings through rolling Beedis. A sum of
Rs.2,000/- was contributed by her husband. The competent authority has
held that her husband had not explained the source for savings of
Rs.2,000/- due to past of time the accounts were not available. The
notice was issued in 1977, whereas the purchase had taken place in 1965.
2(iv). The last property agricultural land was purchased by the
petitioner in 1975 for a sum of Rs.5,400/-. The petitioner had explained
before the competent authority by an order dated 29.03.1995 ordered the
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forfeiture of all the properties under Section 7(1) of SAFEMA. Two
separate appeals were filed by the petitioner and her husband before the
appellate tribunal in the year 1995 and pending the appeal the deceased
first petitioner's husband died on 17.06.1998. Thereafter, their three
daughters were impleaded as parties in the appeal.
2(v). Even while appeal was pending, the deceased first petitioner's
husband had filed an application to receive additional evidence the
appellate tribunal sought for comments from the Departmental
Authorities, then the petitioner had filed an another affidavit along with
the application to receive the additional evidence relating to the Income
Tax Assessment Proceedings and orders. The appellate tribunal rejected
the application on the erroneous ground that the documents were being
sought to be filed after long number of years. The appellate tribunal
dismissed the appeals vide order dated 29.11.1999, aggrieved over the
same, the present writ petitions have been filed.
3. Mr.B.Kumar, learned senior counsel appearing on behalf of the
petitioners would submit that the appellate tribunal committed serious
error of law in rejecting the additional evidence solely on the ground of
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delay without considering the circumstances under which the same were
not produced at the earliest point of time. The authorities have come to
the conclusion on the basis of order of the Commissioner of Income Tax
dated 26.05.1981 which was made under Section 264 of the Income Tax
Act. The issue was relating to the assessment year 1968-69. The
authorities have overlooked the fact that it was the revision under Section
264 of the Income Tax Act in which the amount involved is Rs. 3,389/-.
He would submit that one of the property was purchased in 1958, another
in 1965, the third in 1967 and the fourth in 1975. The authorities could
not expect the first petitioner and her husband to preserve the books of
accounts pertaining to transactions several years prior to the impugned
notice. In fact the first petitioner's husband was a partner in Basha
Jewellery besides the business in artificial diamond jewellery and earned
business income and hence the other properties were purchased in and
out of income. The adverse findings of the Income Tax Department
ought not to have been taken as a ground to forfeit the properties without
considering the facts and evidence in proper prospective under the
provisions of SAFEMA and therefore the findings are bias. The
petitioner had established that she had savings to an extent of Rs.3,000/-
for the property which was purchased for a sum of Rs.5,000/-. The
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source from her husband was Rs.2,000/- and even if that was disbelieved.
She was entitled to the property under Section 9 of the SAFEMA, which
was not exercised by the authorities. The learned senior counsel would
submit that the 6(1) notice dated 21.01.1978 was issued after lapse of 20
years. It would be unfair within Article 21 of the Constitution of India,
to require the person to produce account books, after 20 years. Even
where there is no time limit the proceedings will have to be taken within
a reasonable time.
4. The learned senior counsel to strengthen his contentions he has
relied upon the following judgments:
“1. (1989) 178 ITR 292, Rupchand Prasad v.
Competent Authority wherein it has been held that -
“..... There is no gainsaying that running of a
business and earning of profits are not entirely
dependent upon the capital investment. To an extent,
such investment may play a substantial role when
sophisticated or highcost machineries are involved. In a
mercantile business, where the initial investment was as
low as Rs.5,000 and the present business runs into lakhs
(the turnover of assessment year 1982-83 was Rs.4.6
lakhs), that investment hardly played any part. Such
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trading activities require business acumen, foresight,
reputation, insight into market conditions, personal
contacts, hard labour, location, etc., etc. It is the sum
total and cumulative effect of various factors not
essentially co-relatable to initial investment only. It is
treated as valuable intangible asset and can draw from
personal reputation, local reputation and objective
reputation of the products of the business......”
2. Vijas Chand v. Competent Authority dated
14.08.1989 wherein it has been held that -
“.... A copy of the income-tax assessment order for
the year 1976-77 dated March 30, 1979, is available at
pages 102 to 104 of the paper book. From this order, it
is apparent that the Income-tax Officer has included the
old property income but not any income from the newly
constructed property. Paragraph 3 of the assessment
order shows that the Income-tax officer had applied his
mind to the investment made in the new house. He has
included Rs.17,885 as income from smuggling activities
under the head “Other sources'.
The Competent Authority has observed in his
order that although the investments in the new
construction are recorded in the books of account of the
business, the business itself was an reasoning. The
Competent Authority has observed (page 24 of the paper
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book) that Rs.5,200 were held to be income from some
undisclosed source in the assessment year 1971-72 and
Rs.5,350 in the assessment year 1976-77. This much of
illegal income cannot convert the entire business income
into an illegal source out of the profits of which the
owner can withdraw for the purposes of other
investments. The existence of the business, at least since
the assessment year 1964-65 when the books of account
have been commenced, has not been challenged. The
business consisted of selling imported watches but the
major portion of the income was from repairs which was
essentially an activity not depending on the introduction
of capital. Therefore, the accumulated income from the
business which was withdrawn and invested in house
property cannot be described as tainted income. We,
therefore, hold that the explanation for the acquisition of
the house is quite probable and cannot be disbelieved in
the absence of any other evidence on record. The order
of the Competent Authority in respect of this asset is also
set aside. ......”
3. 1990(185) IT 605, Ramnath Prasad Banks v.
Competent Authority, Calcutta.
4. 1991(51) ELT 249 (Bom), Caprihans India
Ltd., v. Union of India.
5. (1991) 190 ITR 676, R.Rajagopal Kandiyar v.
Competent Authority.
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W.P.Nos.3966 & 5639 of 2000
6. AIR 1998 SC 688, M/s.Hindustan Times Ltd.,
v. Union of India and others.
7. 2002(64) DRJ 763 (DB), Bain Nath Agarwalla
v. Union of India & Ors.,
8. 2007(209) ELT 161 (SC), Commissioner of
C.EX., Hyderabad v. Novapan Industries Ltd.,
9. 2014(305) ELT 282 (Guj), E.I.Dupont India
Pvt. Ltd., v. Union of India.
10. 2015(2) SCC 727, South Central Railway
Employees Cooperative Credit Society Employees
Union v. B.Yashodabai and others.
11. 2022 SCC OnLine SC 1073, Union of India
and another v. Citi Bank, N.A.”
5. Mr.ARL.Sunderasan, the learned Additional Solicitor General
of India would submit that with regard to house property at Door No.19,
Nadu-Swankara Street was acquired on 07.10.1958 for Rs.7,500/-, the
person affected has not produced any evidence to prove the legal source
out of which the property was purchased and the property is also not
been disclosed to the Income Tax Authorities. The petitioner did not
produce valid evidence before the authorities concerned that she had
carried on business of rolling Beedis. Similarly no evidence was letting
to show that the first petitioner's husband had carried on business from
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1942. The burden of proof lies on person affected who has been issued
notice. He would submit that the petitioner did not establish the fact that
more than 50% of income was in legal source and therefore, the
petitioner is not entitled to invoke Section 9 of the Act. There is no
violation of natural justice and sufficient opportunities were given to the
petitioner under legal heirs to establish their case before the authorities
concerned. The burden of proof lies on the petitioner under Section 8 of
the Act, was not discharged.
6. We have considered the rival submissions made on either side
and perused the available records.
7. It is seen from records vide order dated 29.03.1995 under
Section 7(1) of SAFEMA, the competent authority forfeited five
properties, by issuing 6(1) notice for the forfeiture of property, three
properties which are held in the name of late Sri.R.Yusuf Khan. A
detenue under the Conservation of Foreign Exchange Prevention of
Smuggling Activities Act, 1974 and two properties were held in the
name of Smt.Pyari Ben the petitioner herein, wife of the detenue. The
properties are
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A. Held in the name of Yusuf Khan:
(i) House property at Door No.19, Nadu-Swankara Street, Trichy.
(ii) House property at Door NO.24-A, Nadu-Allimal Street, Trichy.
(iii) Right, title and interest in the firm, M/s.Basha Jewellery,
No.178, Big Bazar Street, Trichy including the capital and current
accounts as on 31.03.1976.
B. Held in the name of Pyari Ben:
(iv) House property at Door No.8, Swankara Street, Trichy.
(v) Land in Survey No.32/2 and 189/1, Thiruverumbur.
8. It is also seen that two appeals were filed before the appellate
tribunal for forfeited property on 29.09.1995, late Sri.R.Yusuf Khan had
filed an appeal number in FBA.49/MDS/95. The writ petitioner had filed
an appeal in FBA.48/MDS/95 pending appeals, the petitioner's husband
i.e., Sri.R.Yusuf Khan died on 17.06.1998. By an order dated
05.05.1999 the tribunal allowed the legal heirs of late R.Yusuf Khan
were impleaded as parties.
9. It is stated 6(1) notice, that the writ petitioner herein, i.e.,
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Smt.Pyari Ben has no independent source of income. It is also
mentioned that the details of Income Tax Assessment Returns and other
opportunities were provided, wherein it has been mention that there are
illegally acquired properties in terms of Section 3(1)(c)(iii)(iv) of
SAFEMA. A copy of notice under section 6(2) was issued to Smt.Pyari
Ben / first petitioner herein with regard to items 3 and 4. It is seen from
the order passed under Section 7(1) of the SAFEMA, wherein it is
mentioned that in support of the contentions made in defence, a copy of
order under Section 254 of the Income Tax Act passed by the
Commissioner of Income Tax, Madurai dated 26.05.1981, furnished. It
was also contended that for the properties at Serial No.3 and 5 under
notice, as seen from the order of Income Tax Commissioner, 50% of the
sources and the investment made therein have been accepted by the
Commissioner of Income Tax. Therefore, the person affected may be
given an option to pay a fine in lieu of forfeiture in terms of Section 9 of
the Act. The Competent Authority held that the properties in this case
had been purchased both in the name of person affected as well as in the
name of his wife. It is also held that the first property bearing Door
No.19, Nadu-Swankara Street, Trichy, acquired on 07.10.1958, for
Rs.7,500/-. The person has not produced evidence regarding the source
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out of which the property was purchased.
10. It was also contended that out of savings made from the
artificial diamonds business carried on him from the year 1942 onwards,
the person affected saved Rs.7,500/-, which was utilized for the purchase
of the property. This contention was not accepted by the Competent
Authority, as it was held that there was absolutely no evidence on record
to indicate that person affected was in fact carrying on artificial diamond
business, and that property was purchased out of savings made
therefrom. The Competent Authority came to the conclusion that he had
not discharged his liability under Section 8 of the Act. The house
property at 24A, Allimmal Street, Trichy had been purchased for
Rs.7,675/-, including stamp charges. The person affected had declared
an income of Rs.11,850/- for the said assessment year to the Income Tax
Authorities, and the said property was purchased out of such income.
However, the Competent Authority found that he has not furnished any
document to substantiate the purchase of the property and also the source
of income of Rs.11,850/- stated to have been declared to the Income Tax
Authorities. The Competent Authority held that the order of the Income
Tax Department indicated that the person affected had declared an
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income of Rs.11,850/- for the assessment year 1968-69. Apart from the
purchase of the house property under consideration for Rs.7,675/-, the
person affected had also spent on account of Rs.15,864/- on account of
renovating and making improvements in the house property at No.8,
Swankara Street, Trichy. Thus, against the income shown at Rs.11,850/-,
the person affected had made an expenditure of Rs.23,539/- in the
assessment year 1968-69.
11. The person affected had claimed to have availed of a loan to an
extent of Rs.4,250/- for meeting such excess expenditure. Allowing for
of this loan and treating an amount of Rs.6,000/- as out of past savings
from his wife, the Income Tax Officer computed the assessment of
income at Rs.14,389/- for the said assessment year. The Competent
Authority noted that the affected person had already become a partner in
the firm M/s.Basha Jewellery in 1964-65. It was obtained that there was
no reason why the income declared before the Income Tax Authorities
from the business should not have been supported by the books of
accounts maintained by the firm, particularly since it was a partnership
firm. No evidence had been produced to support the loan of Rs.4,250/-
claimed to have been taken by the person affected. The Competent
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Authority also observed that the person affected had claimed that the
property was mortgaged to one Smt.Sivakumari Ammal for a loan of
Rs.7,000/-. Accordingly, he claimed a deduction, which had been
rejected by the Commissioner of Income Tax for the reasons submitted in
that order. The Commissioner of Income Tax had rejected the claim of
the client for an amount of Rs.7,000/- a mortgage loan from the assessed
income for the year 1968-69.
12. It was also contended before the Competent Authority that
since 50% of the sources have been explained and accepted by the
Commissioner of Income Tax, the person affected may be given an
option to pay a fine in lieu of forfeiture. The Competent Authority did
not accept the same on the ground that the income shown from the
assessment year 1968-69 remains unexplained.
13. The Competent Authority held that the house at No.8,
Swankara Street, Trichy acquired on 12.02.1965, in the name of his wife,
the writ petitioner herein, at a cost of Rs.5,000/-. The explanation
tendered was that Rs.3,000/- was invested out of his wife's savings from
Beedi manufacturing labour work, and the remaining sum of Rs.2,000/-
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was contributed by him out of his own savings. The person affected
could not explain the source of savings of Rs.2,000/- and the Competent
Authority also rejected the contention that the wife would have
accumulated a savings of Rs.3,000/- in cash out of Beedi manufacturing
for labour work for about 25 years. The Competent Authority also held
that in the income tax return filed for the assessment year 1968-69, an
amount of Rs.9,389/- was claimed as invested in the renovation of the
house as out of past savings. It was held that the source of investment
remained unexplained, and the property was held to be illegally acquired.
The Competent Authority found that with regard to the property under
consideration, the person affected had a 44% share in the firm M/s.Basha
Jewellery, Trichy, but he did not explain how the investments were made
in this property. The person affected had been silent through out the
proceedings, including the affidavit which he filed before this Court in
W.P.No.3098 of 1978. The Competent Authority found that the person
affected never produced any books of accounts and records for the
assessment years 1975-76 and 1976-77. The Income Tax Officer had
added a sum of Rs.3,000/- for each of the years, as income out of
business.
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14. In the absence of any explanation regarding the investment
made in the firm, and thereafter, the income generated thereof not being
supported by any books of accounts and records, the Competent
Authority held that the said firm is liable for forfeiture under the Act.
The agricultural land in Thiruverumbur, acquired in May 1975 for
Rs.5,400/- was purchased in the name of his wife from her savings as
well as from his own savings. However, he did not explain what these
savings were and how they were made. The Income Tax Officer
considered the acquisition of the property as one with no explainable
sources and added a sum of Rs.3,000/- each for the years 1975-76 and
1976-77 to his income. The Competent Authority held that the sources
of the said property had been declared illegally acquired and the
properties were liable for forfeiture under the Act. It was also held that
the entire source for the said property had been declared as unexplained,
and the Income Tax Officer had added Rs.3,000/- for each of the years
1975-76 and 1976-77 to the income of person affected while considering
the assessment of the sources of this property. Therefore, the petitioner
was not entitled to remedy under Section 9 of the Act.
15. The learned Additional Solicitor General of India has referred
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several paragraphs about the detailed discussions recorded by the
Appellate Tribunal, with regard to each properties.
16. The burden of proving that any property specified in the notice
served under Section 6, is not illegally acquired property shall be on the
person affected under Section 8 of the Act. The Appellate Tribunal held
in paragraph 5 which states hereunder :-
“5. The house property at Door No.19, Nadu-
Swankara Street, Trichy, was purchased on 07.10.1958
for Rs.7500/-. The sources are stated to be savings
made by late R.Yusuf Khan from the artificial diamond
business carried on by him from 1942 onwards.
However, no evidence has been adduced in support of
the claims that the late R.Yusuf Khan was carrying on
the artificial diamond business and was able to save
Rs.7500/-. He had not kept his yearly savings in any
bank account. We agree with the Competent Authority
that in those days, the amount of Rs.7500/- was quite a
substantial amount for some one to keep in cash. In the
absence of any proof of legitimate business and savings,
we agree with the competent authority that R.Yusuf
Khan failed to discharge his liability u/s.8 of SAFEMA.
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17. The learned Senior Counsel appearing for the petitioners
would submit that the Commissioner's order is under Section 264 of the
Income Tax Act. The impact of the Section not noted under the Scheme
1961 Act, under Section 253, against the order of the Appellate Assistant
Commissioner can file an appeal under Section 263, Commissioner can
revise the order of the Income Tax Officer, even enhance it.
18. It is pertinent to mention that the Appellate Tribunal has
considered the Commissioner's Order and passed detailed order
paragraphs 6 to 11 which states hereunder :-
“6. Before considering the legality or otherwise of
the sources of the investment in the house property at
Door NO.24-A, it is necessary to consider the source of
investment in M/s.Basha Jewellery because it is
apparently income from this firm which has been used to
acquire the house property at No.24 A as well as some
other properties. Late R.Yusuf Khan had claimed to
have become a partner, with 44% share, in the Basha
Jewellery in 1964-65. In his order the Competent
Authority has stated that (a) no explanation of the
investment in the firm was furnished (b) Late R.Yusuf
Khan had been silent about this property all through the
proceedings under the SAFEMA (except when he
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appeared for personal hearing) as well as in the Writ
Petition No.3098/78 filed before the Madras High Court
and (c) even during personal hearing he (late R.Yusuf
Khan) did not furnish details of business till the
assessment year 1968-69 but filed only one page extract
of the Profit and Loss Account for the financial year
1975-76. Late R.Yusuf Khan never produced any books
of account of the firm before the competent Authority.
7. It is very significant that neither before the
Competent Authority nor before us the appellants
challenged the findings of the CIT. On the other hand,
in the grounds of appeal filed in May 1995, late R.Yusuf
Khan had claimed that “the source of income have been
properly reported to the Income Tax Authority and the
same has been accepted by the Income Tax
Department”. Nothing can be farther from truth. In his
order the CIT has also observed that late R.Yusuf Khan
had not made with drawals from his business income or
out of his past savings for domestic and personal
expenses. Obviously, late R.Yusuf Khan had much more
income than what he was declaring before the ITO but
he had difficulty in explaining the investments in the
properties. When he failed to convince the ITO that he
had savings to the extent of Rs.10000/- he went to the
CIT to claim that he had also mobilised Rs.7000/- by
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mortgaging a house property but could not convince the
CIT. We agree with the Competent Authority that the
source of investment remain totally unexplained and
house property No.24 A is illegally acquired.
8. The house property at No.8, Swankara Street,
Trichy, was purchased for Rs.5000/- on 12.02.1965 in
the name of Smt.Pyarben, Detenure's wife. The source
are stated to be Rs.3000/- saved by her out of beedi
manufacturing labour work over a period of 25 years
and Rs.2000/- contributed by the husband out of his own
savings. These explanations were rightly rejected by the
Competent Authority. There was no likelihood of
savings by Yusuf Khan from M/s.Bashs Jewellery which
was started in the year in which the property was
purchased. The Competent Authority rightly disbelieved
the story of saving of Rs.3000/- by Smt.Pyariben. Even
if, we give her benefit of doubt, for which there is no
basis, that she might have saved Rs.3000/- it is also to
be kept in view that late R.Yusuf Khan spent further a
sum of Rs.15864/- on the renovation and improvement of
this house and the source of this amount, which is
several times more than the purchase price, remains
unexplained. Therefore, the Competent Authority is
justified in forfeiting this house property.
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W.P.Nos.3966 & 5639 of 2000
9. The fifth and the last property ordered to be
forfeited is the agriculture land in S.No.32/2 and 189/1,
Thiruverumber, purchased in May 1975 for Rs.5400/- in
the name of Smt.Pyariben. The findings of the
Competent Authority was that it was purchased out of
detenue's income of Rs.6630/- during the financial year
1974-75 and savings of his wife. In his order the
Competent Authority has pointed out that the ITO
concerned had considered the acquisition of the
property as one with no explainable source of
investment in the agriculture lands must have come out
of the smuggling activities and justified additions made
by the ITO to the declared income. The orders of the
ITO and the observation of this CIT go against the claim
in the grounds of appeal that the Income Tax
Department had accepted the source of income reported
by late R.Yusuf Khan. Therefore, the forfeiture of this
property also is justified.
10. The Competent Authority rightly rejected the
claim as factually incorrect. Apart from the factual
incorrectness of the claim, it has also to be noted that
late R.Yusuf Khan's main claim was that he had made
investment out of income from M/s.Bashs Jewellery but
the Competent Authority has proved, and we agree with
the Competent Authority, that the source of investment
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W.P.Nos.3966 & 5639 of 2000
in the Bashs Jewellery itself remain unexplained and
that is why we are upholding the forfeiture of late
R.Yusuf Khan's right, title and interest in that firm. If
the firm was acquired with tainted money, the entire
income from that firm is also tainted and all the
properties Tax Department is concerned only with the
collection of tax on income, irrespective of the legal or
illegal nature of income. On the other hand, under the
SAFEMA illegally acquired properties are liable to be
forfeited.
11. All the properties had been acquired by late
R.Yusuf Khan either in his own name or in the name of
his wife and he had seventeen long years to explain the
source to the Competent Authority but failed.”
19. The facts relating to the case were elaborately adjudicated by
the Tribunal along with the assessment order passed by the Competent
Authority. The Tribunal concluded by stating that the nexus between the
forfeited property and the person affected was clearly established, and
consequently, confirmed the order of the Competent Authority.
20. We are of the considered opinion that the proceedings as
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W.P.Nos.3966 & 5639 of 2000
contemplated under Sections 6(1) and 7(1) of the SAFEMA were
complied with by the authorities, and, under Section 8 of the SAFEMA,
the burden of proof lies on the person affected. In the present cases,
neither the affected person nor the legal heirs, including the petitioners,
failed to discharge the burden, which resulted in forfeiting the properties
under the provisions of SAFEMA. The petitioners have also failed to
prove that more than 50% of the sources of income are from illegal
sources, and therefore, they are not entitled to seek any relief under
Section 9 of the SAFEMA.
21. The Competent Authority and Appellate Tribunal shall have all
the powers of a Civil Court, while trying a suit under the Code of Civil
Procedure, 1908 under Section 15 of the Act. Therefore, the Competent
Authority and Appellate Tribunal are fact finding Forums.
22. The rulings relied on by the learned Senior Counsel appearing
for the petitioners is not supported to their case and there is no force in
the submissions made by the learned Senior Counsel and we find there is
no merits in the writ petitions.
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W.P.Nos.3966 & 5639 of 2000
23. The power of judicial review under Article 226 of the
Constitution of India is to ensure that the processes, through which a
decision has been taken by the Competent Authority and Appellate
Tribunal are in consonance with the statute under rules in force, without
any perversity, but not on the decision itself. We have considered the
factual findings of the Competent Authority and Appellate Authority, as
well as the grounds raised between the parties. We do not find any
infirmity in respect to the orders impugned.
24. In the result, both the writ petitions are dismissed. The
impugned order dated 29.11.1999, passed by the Appellate Tribunal in
FBA Nos.48 & 49/MDS/95 are confirmed. Consequently, the connected
writ miscellaneous petitions are closed. No costs.
(S.M.S., J.) (M.J.R., J.)
31.01.2025
rna
Index : Yes / No
Internet : Yes / No
Neutral Citation: Yes / No
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W.P.Nos.3966 & 5639 of 2000
To
1.The Appellate Tribunal for
Forfeited Property,
'C' Wing, Lok Nayak Bhavan,
Khan Market, New Delhi.
2.The Competent Authority,
SAFEM (FOP) & NDPS Act,
Utsav Buildings,
No.64/1, G.N.Chetty Street,
T.Nagar, Chennai 600 017.
https://www.mhc.tn.gov.in/judis
W.P.Nos.3966 & 5639 of 2000
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W.P.Nos.3966 & 5639 of 2000
S.M.SUBRAMANIAM.J,
and
M.JOTHIRAMAN.J,
rna
Pre-Delivery Orders in
W.P.Nos.3966 & 5639 of 2000
and W.M.P.Nos.6124 & 8549 of 2000
31.01.2025
https://www.mhc.tn.gov.in/judis
