What the courts have decided on section Benami Amendment Act 2016, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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Mangathai Ammal v Rajeswari
Supreme CourtHelps taxpayerNo later treatment found
The officer says my wife's property is mine because the money came from my account. Is that enough to make it benami?
No, not by itself. The burden of proving that a purchase is benami rests throughout on the person asserting it, and the source of the purchase money has never been the sole consideration. What decides the question is the intention of the person who put up the money, drawn from the relationship of the parties, the motive for the arrangement and their conduct afterwards.
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Nexus Feeds Ltd v ACIT
High CourtHelps taxpayerNo later treatment found
The transaction the Department calls benami was done in 2011. Can it use the 2016 definitions against me?
No, on this judgment. The Telangana High Court held that ss.2(9)(A) and 2(9)(C) are substantive, offence-creating provisions and not machinery provisions, that the 2016 Amendment Act was brought into force on 1 November 2016 by the notification of 25 October 2016 with nothing to give it effect from an earlier date, and that applying those definitions to a transaction of December 2011 would offend Article 20(1). All the writ petitions were allowed.
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Niharika Jain v Union of India
High CourtCuts both waysUnder appeal
The property was bought years before November 2016 and the benami notice came after. Can the amended Act reach back?
This is the writ batch in which the Rajasthan High Court framed that question directly - whether the Benami Amendment Act 2016 applies retrospectively - after a search under s.132 threw up show-cause notices under s.24(1) and provisional attachments under s.24(3) for pre-amendment land purchases. The judgment runs to 160 pages and the concluding part could not be reached in the copy available; what can be established from the document is the framing of the issue at para 19 and the rival cases on either side.
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Union of India v Ganpati Dealcom P Ltd
Supreme CourtCuts both waysOverruled
Can benami proceedings be taken against me for a property bought before October 2016?
On the current position, yes, because the judgment that said otherwise has gone. In 2022 the Supreme Court held that the 2016 amendment to the Prohibition of Benami Property Transactions Act created new substantive offences and could not operate on transactions before 25 October 2016, struck down s.3(2) and s.5 of the un-amended 1988 Act, and directed pre-amendment prosecutions and confiscations to be quashed. On 18 October 2024 it recalled that judgment in its entirety, holding that constitutional validity had been decided with no lis and no contest between the parties, and restored the appeal for fresh hearing.
Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.
