The Initiating Officer has issued a s.24 notice and attached my accounts on the strength of a spreadsheet found in someone else's search. Will the High Court interfere now?
Not where the officer has set out his material. The Delhi High Court dismissed the writ petition, holding that the Initiating Officer had written in detail the reasons for believing the petitioner to be a benamidar — spreadsheets of bogus expenses recovered in a search, corroborated by statements of the beneficial owners — and that the Court would not interfere with that opinion when an efficacious remedy lay before the Adjudicating Authority under s.26, which can also revoke the attachment.
Decided by the High Court (V. Kameswar Rao J and Vinod Kumar J, judgment delivered by Vinod Kumar J) on 2025-11-19, reported as W.P.(C) 17000/2025 with CM Appl. 69879/2025. It bears on section Benami s.24(1), section Benami s.24(3), section Benami s.24(4), section Benami s.26, section Benami s.26(1), section Benami s.2(9)(A), section 132, section 132(4), section Constitution Art. 226, section Constitution Art. 300A of the Income Tax Act 1961, in Evidence & Burden of Proof and Search, Survey & Block Assessment matters.
It is the other side of Meera Pandey. Where the officer has material and has recorded it, the writ court declines to weigh its sufficiency or quality at the s.24 stage, and objections about identity, admissibility and approval are sent to the Adjudicating Authority.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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The petitioner is the proprietor of M/s Shyam Air Courier, a transport and courier business run since 2009, which had provided services to Vestige Marketing Pvt. Ltd. since 2014. On 20 September 2023 a search under s.132 of the Income-tax Act was carried out on Vestige Marketing, its directors Gautam Bali, Kanwar Bir Singh and Deepak Sood, and its auditor Deepak Choudhary. Excel sheets titled 'Bogus Expenses Employee-Wise' were found on a pen drive at the company's head office at A-89, Phase II, Okhla Industrial Area, New Delhi. They recorded payments made for services never received, with cash returned to the promoters, and listed 'Shyam Sunder Choudhary' as receiving bogus payments from the financial year 2018-19 to 2022-23. The directors admitted the arrangement in statements on oath under s.132(4). A show-cause notice under s.24(1) and a provisional attachment under s.24(3) were issued on 21 March 2025, a further provisional attachment under s.24(4) on 30 July 2025, and a notice under s.26(1) on 29 August 2025. The petitioner contended that the name in the spreadsheet was not his, that his dealings with the company were genuine and supported by bank statements and ledger accounts, that the Initiating Officer had made no independent inquiry and had no reason to believe, that freezing his accounts offended Article 300A, that the spreadsheets were inadmissible without a certificate under s.65B of the Evidence Act, and that he had been given no hearing.
The writ petition was dismissed and the pending application disposed of as infructuous (para 42). The Initiating Officer had written in detail the reasons for believing the petitioner to be a benamidar, and that opinion could not be interfered with by the Court, particularly when an efficacious remedy lay before the Adjudicating Authority under s.26 (para 37). The petitioner's complaint that all his accounts stood attached leaving him unable to pay salaries or carry on business was one to be raised before the Adjudicating Authority, who is empowered to revoke the attachment under s.26 (para 42).
On a challenge to a s.24(1) notice the Court's attention is directed to the material in the Initiating Officer's possession; the inquiry is objective and does not extend to the sufficiency or quality of the material (para 31). Where the officer has documents corroborated by the statements of beneficial owners, the first condition is satisfied (para 32). 'Reason to believe' is a subjective standard — a person has reason to believe a thing if he has sufficient cause to believe it and not otherwise — pitched higher than reasonable suspicion but short of a prima facie case (para 33, drawing on s.2(29) of the Bharatiya Nyaya Sanhita, 2023 and s.35 of the Bharatiya Nagarik Suraksha Sanhita, 2023). The identity objection failed because there was no person named Shyamsundar other than the petitioner with whom the searched person had dealings, and the identification came not only from the pen drive but from the statements of Deepak Choudhary and Gautam Bali (paras 35 and 36). At the initial stage the Court would not enter into the complexities of the merit and evidence for the purpose of determining a benami transaction (para 40), and questions such as prior approval of the Approving Authority were for the Adjudicating Authority (para 41). Amarendra Kumar v Union of India was applied for the four conditions on which the officer's opinion becomes conclusive. V.C. Shukla on the onus of proving benami, and Chandrabhan Sudam Sanap on the s.65B certificate, were held inapplicable at the show-cause stage. Directorate of Enforcement v Poonam Malik was distinguished on the footing that freezing there rested on suspicion without material, whereas here the officer had material and had considered the reply.
This opinion cannot be tinkered with by the Court.
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Handle my notice → Ask a CA on WhatsAppNot where the officer has set out his material. The Delhi High Court dismissed the writ petition, holding that the Initiating Officer had written in detail the reasons for believing the petitioner to be a benamidar — spreadsheets of bogus expenses recovered in a search, corroborated by statements of the beneficial owners — and that the Court would not interfere with that opinion when an efficacious remedy lay before the Adjudicating Authority under s.26, which can also revoke the attachment. This was decided by the High Court (V. Kameswar Rao J and Vinod Kumar J, judgment delivered by Vinod Kumar J) and bears on section Benami s.24(1), section Benami s.24(3), section Benami s.24(4), section Benami s.26, section Benami s.26(1), section Benami s.2(9)(A), section 132, section 132(4), section Constitution Art. 226, section Constitution Art. 300A of the Income Tax Act 1961. It is reported as W.P.(C) 17000/2025 with CM Appl. 69879/2025. It is the other side of Meera Pandey. Where the officer has material and has recorded it, the writ court declines to weigh its sufficiency or quality at the s.24 stage, and objections about identity, admissibility and approval are sent to the Adjudicating Authority. If it applies to you, the first step is this: Read the s.24(1) notice for what material is recited — the Court's inquiry is whether material exists and is objectively connected, not whether it is sufficient or good.
The petitioner is the proprietor of M/s Shyam Air Courier, a transport and courier business run since 2009, which had provided services to Vestige Marketing Pvt. Ltd. since 2014. On 20 September 2023 a search under s.132 of the Income-tax Act was carried out on Vestige Marketing, its directors Gautam Bali, Kanwar Bir Singh and Deepak Sood, and its auditor Deepak Choudhary. Excel sheets titled 'Bogus Expenses Employee-Wise' were found on a pen drive at the company's head office at A-89, Phase II, Okhla Industrial Area, New Delhi. They recorded payments made for services never received, with cash returned to the promoters, and listed 'Shyam Sunder Choudhary' as receiving bogus payments from the financial year 2018-19 to 2022-23. The directors admitted the arrangement in statements on oath under s.132(4). A show-cause notice under s.24(1) and a provisional attachment under s.24(3) were issued on 21 March 2025, a further provisional attachment under s.24(4) on 30 July 2025, and a notice under s.26(1) on 29 August 2025. The petitioner contended that the name in the spreadsheet was not his, that his dealings with the company were genuine and supported by bank statements and ledger accounts, that the Initiating Officer had made no independent inquiry and had no reason to believe, that freezing his accounts offended Article 300A, that the spreadsheets were inadmissible without a certificate under s.65B of the Evidence Act, and that he had been given no hearing. The matter was decided on 2025-11-19 by the High Court (V. Kameswar Rao J and Vinod Kumar J, judgment delivered by Vinod Kumar J). On those facts the High Court held as follows. The writ petition was dismissed and the pending application disposed of as infructuous (para 42). The Initiating Officer had written in detail the reasons for believing the petitioner to be a benamidar, and that opinion could not be interfered with by the Court, particularly when an efficacious remedy lay before the Adjudicating Authority under s.26 (para 37). The petitioner's complaint that all his accounts stood attached leaving him unable to pay salaries or carry on business was one to be raised before the Adjudicating Authority, who is empowered to revoke the attachment under s.26 (para 42).
On a challenge to a s.24(1) notice the Court's attention is directed to the material in the Initiating Officer's possession; the inquiry is objective and does not extend to the sufficiency or quality of the material (para 31). Where the officer has documents corroborated by the statements of beneficial owners, the first condition is satisfied (para 32). 'Reason to believe' is a subjective standard — a person has reason to believe a thing if he has sufficient cause to believe it and not otherwise — pitched higher than reasonable suspicion but short of a prima facie case (para 33, drawing on s.2(29) of the Bharatiya Nyaya Sanhita, 2023 and s.35 of the Bharatiya Nagarik Suraksha Sanhita, 2023). The identity objection failed because there was no person named Shyamsundar other than the petitioner with whom the searched person had dealings, and the identification came not only from the pen drive but from the statements of Deepak Choudhary and Gautam Bali (paras 35 and 36). At the initial stage the Court would not enter into the complexities of the merit and evidence for the purpose of determining a benami transaction (para 40), and questions such as prior approval of the Approving Authority were for the Adjudicating Authority (para 41). Amarendra Kumar v Union of India was applied for the four conditions on which the officer's opinion becomes conclusive. V.C. Shukla on the onus of proving benami, and Chandrabhan Sudam Sanap on the s.65B certificate, were held inapplicable at the show-cause stage. Directorate of Enforcement v Poonam Malik was distinguished on the footing that freezing there rested on suspicion without material, whereas here the officer had material and had considered the reply. In the words reproduced by the source cited on this page: "This opinion cannot be tinkered with by the Court." The decision followed or applied Amarendra Kumar v Union of India, Civil Appeal Nos. 11473-11474 of 2018 — applied; V.S.J. Dinakaran v DCIT (Benami Prohibition), (2023) 146 taxmann.com 7 (Madras) — applied; Dinesh Chand Surana v DCIT, [2022] 142 taxmann.com 494 (Madras) — applied; Krishna Sudama Marketing Pvt. Ltd. v Union of India, [2024] 160 taxmann.com 724 (Calcutta) — applied; Directorate of Enforcement v Poonam Malik, 2025 SCC OnLine Del 8397 — distinguished; CBI v V.C. Shukla — held inapplicable at the show-cause stage; Chandrabhan Sudam Sanap v State of Maharashtra, Criminal Appeal No. 879 of 2019 — held inapplicable at the show-cause stage.
It was decided by the High Court on 2025-11-19 and is reported as W.P.(C) 17000/2025 with CM Appl. 69879/2025. Binding within that High Court's jurisdiction. Persuasive elsewhere. A High Court decision binds the assessing officer, the Commissioner (Appeals) and the Income Tax Appellate Tribunal within that state, and is persuasive elsewhere. If your assessment is in a different jurisdiction, check whether your own High Court has taken the same view before relying on it. On section Benami s.24(1), section Benami s.24(3), section Benami s.24(4), section Benami s.26, section Benami s.26(1), section Benami s.2(9)(A), section 132, section 132(4), section Constitution Art. 226, section Constitution Art. 300A, 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 department, and it appears in this library for that reason — you need to know what the Assessing Officer will cite against you. The writ petition was dismissed and the pending application disposed of as infructuous (para 42). The Initiating Officer had written in detail the reasons for believing the petitioner to be a benamidar, and that opinion could not be interfered with by the Court, particularly when an efficacious remedy lay before the Adjudicating Authority under s.26 (para 37). The petitioner's complaint that all his accounts stood attached leaving him unable to pay salaries or carry on business was one to be raised before the Adjudicating Authority, who is empowered to revoke the attachment under s.26 (para 42). It arises in Evidence & Burden of Proof and Search, Survey & Block Assessment matters, on section Benami s.24(1), section Benami s.24(3), section Benami s.24(4), section Benami s.26, section Benami s.26(1), section Benami s.2(9)(A), section 132, section 132(4), section Constitution Art. 226, section Constitution Art. 300A of the Income Tax Act 1961, and was decided by V. Kameswar Rao J and Vinod Kumar J, judgment delivered by Vinod Kumar J. 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 notice recites only an uncorroborated statement, Meera Pandey is the case to take; if it recites documents plus corroborating statements, expect to be sent to the Adjudicating Authority. Raise identity, s.65B certification and prior approval of the Approving Authority before the Adjudicating Authority, not in the writ petition; the Court held those are for adjudication. Where accounts are frozen and the business cannot run, apply to the Adjudicating Authority to revoke the attachment under s.26 rather than to the writ court.
Searched for later treatment; none was found. That is not the same as a source affirming it. Decided 19 November 2025. No decision applying, affirming, doubting or overruling it was located. The judgment does not refer to Union of India v Ganpati Dealcom or to its recall, and nothing in it turns on them: the transactions in issue run from the financial year 2018-19 to 2022-23, all after the 2016 Amendment Act came into force on 1 November 2016, so the prospectivity question that the recall has reopened does not arise on these facts. 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.
The judgment was read through to the disposition. It is an oral judgment, delivered by Vinod Kumar J. It does not discuss Meera Pandey Thru. Her Attorney v Union of India; the contrast drawn in this entry between the two is the editor's, not the Court's. The reasoning on 'reason to believe' borrows its definition from s.2(29) of the Bharatiya Nyaya Sanhita, 2023 rather than from the Prohibition of Benami Property Transactions Act itself, which does not define the expression. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The writ petition was dismissed and the pending application disposed of as infructuous (para 42). The Initiating Officer had written in detail the reasons for believing the petitioner to be a benamidar, and that opinion could not be interfered with by the Court, particularly when an efficacious remedy lay before the Adjudicating Authority under s.26 (para 37). The petitioner's complaint that all his accounts stood attached leaving him unable to pay salaries or carry on business was one to be raised before the Adjudicating Authority, who is empowered to revoke the attachment under s.26 (para 42).
TaxSphere, “Shyamsundar Sharma v ACIT”, https://taxnotice.vittsphere.com/caselaw/case/shyamsundar-sharma-v-acit-benami-24-material-relegation/ (validity last checked 2026-09-16)
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