Cash Seized Without Verifiable Source Can Be Treated as Benami Property; Filing ITR Later Doesn’t Bar Action: SAFEMA Appellate Tribunal

The Appellate Tribunal under the Prohibition of Benami Property Transactions (PBPT) Act has dismissed an appeal challenging attachment of ₹50.13 lakh cash seized by authorities, holding that unaccounted cash with an unexplained source can fall within the ambit of “benami property” under the PBPT Act and that a subsequent willingness to declare the amount in an Income Tax Return (ITR) does not shield an individual from benami proceedings. The bench of Balesh Kumar (Member) and Rajesh Malhotra (Member) has observed that the appellant himself admitted ownership of the cash while simultaneously claiming that it had been collected from unnamed relatives and friends. Since no supporting details or evidence regarding those alleged contributors were provided, authorities were justified in invoking Section 2(9)(D), which applies where the person providing consideration is fictitious or not traceable. The case arose from the seizure of ₹50.13 lakh by police officials from the possession of Yoosaf N.A. and another person during a vehicle check in Kozhikode. Since the individuals were unable to explain the source of the cash at the time of seizure, the amount was taken into custody and later transferred to the Income Tax Department. The investigating authorities noted that neither individual produced legal evidence regarding ownership of the money, nor had they filed income tax returns. During subsequent proceedings, Yoosaf claimed sole ownership of the amount and stated that the money had been pooled from friends and relatives for investment in real estate. He further filed an affidavit declaring the entire seized amount as his income for Assessment Year 2017–18 and expressed willingness to pay applicable tax and receive the balance refund. However, no supporting documentary evidence was produced to substantiate the alleged contributions from relatives and friends. The Income Tax investigation concluded that the explanation remained unsupported and considered the amount as arising from undisclosed sources. Consequently, the Initiating Officer invoked provisions of the PBPT Act and issued a Provisional Attachment Order treating the cash as benami property under Section 2(9)(D). Before the Tribunal, the appellant argued that proceedings under Section 24 of the PBPT Act could not be initiated merely because the source of cash was not satisfactorily explained. The appellant contended that the concept of a benami transaction necessarily involves a property transaction, a benamidar, and a beneficial owner, and that mere possession of unexplained cash does not establish such a transaction. It was also argued that the legislature never intended simple unexplained cash to be brought within the PBPT framework, particularly where provisions under the Income Tax Act already address unexplained money through Sections 68 and 69. The Tribunal, however, rejected these submissions and examined whether cash could be considered “property” under the Act. It held that cash constitutes tangible movable property and falls within the broad scope of property contemplated under Section 2(26) of the PBPT Act. The Tribunal emphasized that the legislative purpose behind the statute is to curb black money and discourage benami arrangements. Referring to parliamentary discussions surrounding the 2016 amendments, the Tribunal observed that the principal objective of the Act is to discourage benami transactions and combat black money. It stated that unaccounted cash or cash lacking identifiable ownership cannot escape scrutiny under the PBPT framework. The Tribunal also rejected the appellant’s argument that a benami transaction necessarily requires three parties. It clarified that the statutory scheme only requires a benamidar and a beneficial owner and that the existence of a third person is not a prerequisite for constituting a benami transaction. The Tribunal further held that the appellant’s willingness to file an Income Tax Return after proceedings had commenced appeared to be an afterthought. It emphasized that the Income Tax Act and PBPT Act operate in different fields. While the Income Tax Act focuses on tax collection, the PBPT Act aims at prohibiting benami holdings and enabling confiscation of such property. Therefore, merely offering to disclose seized cash in an ITR cannot defeat action under the PBPT Act where the source remains unexplained. Finding no merit in the appellant’s challenge, the Tribunal upheld the attachment and dismissed the appeal. Case Details Case Title: Yoosaf N A. Versus The Initiating Officer, (BPU), Kochi Case No.: FPA-PBPT-1005/KOCHI/2019 Date: 14.05.2026 Counsel For Appellant: Vandana Sharma Bhandari, Advocate Counsel For Respondent: Kanhaiya Singhal, Advocate Click Here To Read Order Read More: ICT@School Services Exempt from Service Tax, Holds Computer Education Contracts as Naturally Bundled Educational Services: CESTAT

Cash Seized Without Verifiable Source Can Be Treated as Benami Property; Filing ITR Later Doesn’t Bar Action: SAFEMA Appellate Tribunal

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