The Adjudicating Authority has dropped my client as beneficial owner and recast him as an abettor, but kept the attachment on his own property. Can it?
No. The Appellate Tribunal held that the Act allows attachment of benami property in the hands of the benamidar or the beneficial owner, and does not allow property to be attached merely because it is in the hands of an abettor without a finding that the property itself is benami. Once the Adjudicating Authority accepted that the appellant was an abettor and that someone else was the beneficial owner, the continued attachment of his personal assets could not stand and the appeal was allowed.
Decided by the ITAT (Balesh Kumar, Member, and Rajesh Malhotra, Member) on 2026-04-30, reported as FPA-PBPT-761/AHD/2019; MP-PBPT-693/AHD/2019. It bears on section Benami s.2(9), section Benami s.3, section Benami s.24(4)(b)(i), section Benami s.26(3), section Benami s.26(5), section Benami s.26(6), section Benami s.53 of the Income Tax Act 1961, in Evidence & Burden of Proof and Appeals matters.
Reclassification during adjudication is common — the Initiating Officer applies to move a person from beneficial owner to abettor and the attachment is left undisturbed. This is the answer to that: attachment under the Act follows the benami character of the property, and abetment attracts the penal consequences in s.53, not attachment of the abettor's own assets.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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The appellant was initially treated as the beneficial owner in a benami transaction involving Rs. 59 lakhs moved through several entities, and the Initiating Officer provisionally attached his personal bank accounts, investments, insurance policies and immovable property under s.24(4)(b)(i). During the adjudication the Initiating Officer applied to recast his role from beneficial owner to abettor, naming Smt. Shital Paresh Soni, proprietor of Shital Jewellers, as the beneficial owner. The Adjudicating Authority accepted the reclassification but allowed the provisional attachment of the appellant's own properties to continue.
The appeal was allowed and pending applications disposed of (para 11). Continuance of the provisional attachment of the property of a person found to be an abettor and not the beneficial owner, in the absence of any specific finding that the property was benami, cannot be sustained (para 10).
The Tribunal held that the Act provides for attachment of benami property in the hands of either the benamidar or the beneficial owner, and does not provide for attachment of property merely because it is in the hands of an abettor unless the property is itself benami (para 10). The Adjudicating Authority having itself accepted, on the Initiating Officer's own application, that the appellant was an abettor and that the beneficial owner was another person, and having made no finding that the attached assets were benami property, the basis on which they had been attached had fallen away (para 10).
the Act does not provide for attachment of a property merely because it is in the hands of the abettor
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Handle my notice → Ask a CA on WhatsAppNo. The Appellate Tribunal held that the Act allows attachment of benami property in the hands of the benamidar or the beneficial owner, and does not allow property to be attached merely because it is in the hands of an abettor without a finding that the property itself is benami. Once the Adjudicating Authority accepted that the appellant was an abettor and that someone else was the beneficial owner, the continued attachment of his personal assets could not stand and the appeal was allowed. This was decided by the ITAT (Balesh Kumar, Member, and Rajesh Malhotra, Member) and bears on section Benami s.2(9), section Benami s.3, section Benami s.24(4)(b)(i), section Benami s.26(3), section Benami s.26(5), section Benami s.26(6), section Benami s.53 of the Income Tax Act 1961. It is reported as FPA-PBPT-761/AHD/2019; MP-PBPT-693/AHD/2019. Reclassification during adjudication is common — the Initiating Officer applies to move a person from beneficial owner to abettor and the attachment is left undisturbed. This is the answer to that: attachment under the Act follows the benami character of the property, and abetment attracts the penal consequences in s.53, not attachment of the abettor's own assets. If it applies to you, the first step is this: Read the adjudication order for the precise role finally assigned to your client — benamidar, beneficial owner or abettor — and quote it.
The appellant was initially treated as the beneficial owner in a benami transaction involving Rs. 59 lakhs moved through several entities, and the Initiating Officer provisionally attached his personal bank accounts, investments, insurance policies and immovable property under s.24(4)(b)(i). During the adjudication the Initiating Officer applied to recast his role from beneficial owner to abettor, naming Smt. Shital Paresh Soni, proprietor of Shital Jewellers, as the beneficial owner. The Adjudicating Authority accepted the reclassification but allowed the provisional attachment of the appellant's own properties to continue. The matter was decided on 2026-04-30 by the ITAT (Balesh Kumar, Member, and Rajesh Malhotra, Member). On those facts the ITAT held as follows. The appeal was allowed and pending applications disposed of (para 11). Continuance of the provisional attachment of the property of a person found to be an abettor and not the beneficial owner, in the absence of any specific finding that the property was benami, cannot be sustained (para 10).
The Tribunal held that the Act provides for attachment of benami property in the hands of either the benamidar or the beneficial owner, and does not provide for attachment of property merely because it is in the hands of an abettor unless the property is itself benami (para 10). The Adjudicating Authority having itself accepted, on the Initiating Officer's own application, that the appellant was an abettor and that the beneficial owner was another person, and having made no finding that the attached assets were benami property, the basis on which they had been attached had fallen away (para 10). In the words reproduced by the source cited on this page: "the Act does not provide for attachment of a property merely because it is in the hands of the abettor"
It was decided by the ITAT on 2026-04-30 and is reported as FPA-PBPT-761/AHD/2019; MP-PBPT-693/AHD/2019. Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section Benami s.2(9), section Benami s.3, section Benami s.24(4)(b)(i), section Benami s.26(3), section Benami s.26(5), section Benami s.26(6), section Benami s.53, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The appeal was allowed and pending applications disposed of (para 11). Continuance of the provisional attachment of the property of a person found to be an abettor and not the beneficial owner, in the absence of any specific finding that the property was benami, cannot be sustained (para 10). It arises in Evidence & Burden of Proof and Appeals matters, on section Benami s.2(9), section Benami s.3, section Benami s.24(4)(b)(i), section Benami s.26(3), section Benami s.26(5), section Benami s.26(6), section Benami s.53 of the Income Tax Act 1961, and was decided by Balesh Kumar, Member, and Rajesh Malhotra, Member. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. If the finding is abetment, ask where the order finds that the attached property is itself benami; if there is no such finding, the attachment has no foundation. Object at the adjudication stage when the Initiating Officer applies under s.26(5) or s.26(6) to recast roles, and insist that the consequences for the attachment be dealt with in the same order. Keep the abetment exposure separate — s.53 carries its own consequences and is not answered by this point.
Searched for later treatment; none was found. That is not the same as a source affirming it. Decided in April 2026; no later decision applying, affirming, doubting or overruling it was found. Searches of the Appellate Tribunal's own site did not reach this order, and it is not carried on the general case-law databases, so nothing follows from the absence of later treatment. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
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The appeal was allowed and pending applications disposed of (para 11). Continuance of the provisional attachment of the property of a person found to be an abettor and not the beneficial owner, in the absence of any specific finding that the property was benami, cannot be sustained (para 10).
TaxSphere, “Shrenik Shah v Initiating Officer, DCIT BPU, Ahmedabad”, https://taxnotice.vittsphere.com/caselaw/case/shrenik-shah-v-initiating-officer-benami-24-abettor-property-not-attachable/ (validity last checked 2026-09-16)
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