Sri. K.Praveen Kumar v. The Assistant Commissioner of lncome ax

ORDER Hon'ble Sri Justice N Bheema aka Heard Mrs. R. Sh a, learned counsel for petitioner, Sri N. Praveen ReddY, Ie ned Standing Counsel for Respondents 1 and 2 and Sri Ga Praveen Kumar, learned Dcputy Solicitor General on behalf of espondent No.3. 2 The conspectus of the i ts that are narrated in the Writ petition are that petitioner be me the co-owner of land admeasuring Acs. 25-Ob out of Acs. 7-00 in Survey No. 80/D, situated at Hafeezpet Village, Se gampally Mandal, R.R District, pursuant to a registered Settlement Deed bearing Document No. 2630 of 2016, dated 1O.3.2O 16. The settlement w,as execuled in petitioner's favour s he was instrumental in protecting the land from enc chments and incurred expenditure for its preservation while being ln peaceful possession of the same. Peti oner was a renowned international Badminton player and epresented India in several [ournaments. He was ranked No. 1 n the Country in the earlY 9Os. On account of Petitioner's suc ssful career in badminton, he garnered a fair name throughou India and had also made contacts with the creamy laYer o the Society. Because of 2 '...] petitioner's flourishing career, he was granted appointment in the State Bank of India and worked in the bank up to 2007, when petitioner resigned as the Assistant Manager in State Bank of India. Pursuant to petitioner's resignation in 20O8, he enterecl into the field of real estate and on his wife's request, petitioner visited Suruey No. 80 of Hafeezpet Village in order to localize and identify the property purchased by his wife K. Haritha and others uide registered Sale Deeds bearing Document Nos. 2667 of 2.006, 3669 of 2006, 3681 of 2006, dated 19.O1.2006, 3733 of 2006, 9233 of 2006, dated

20.O1.2006,9234 of 2006 and 9235 of 2006, dated 23.O1.2006 followed by registered Ractihcation Deeds bearing document Nos. 4421 of 2006, 4422 ol 2006, 4423 of 2006 and 4424 of 2006 all d.ated 28.02.2OO6, registered in the office of Joint Sub Registrar II Ranga Reddy in respect of lands in Sy.No.8O of Hafeezpet Village. Thereafter, petitioner entered onto the open land belonging to his wife u,hich was available in Survey No. 80 and had protected the same by making a compound wall over part of the available open land. From 2OO7 onwards till about 2O15, petitioner handled multiple attempts which were made to dispossess him. Once such instance is in and around 2007, at the behest of CPI Party, thousands of illegal huts q'ere sought to be erected on the land where petitioner was in possession. )-/ I I L ) J Petitioner/family members by fol wing due process of law, ensured that illegal huts were dis tled and removed. Apart from major incidents, on multiple casions, third parties tried to encroach upon the said land and tried to raise illegal structures/ attempt to dispossess titioner, but petitioner had resisted/ thwarted the said illegal ncroachmen ts/ attempts by using the remedies available under law and was able to protect thc land in petitioner's possession.

3. It was further stated that when in 2O 15, M/s Grcater Golconda Estates Private mited and others triecl to intcrfere with his peaceful possess n and enjoyment over the said land, such attempts to dispos ess the petitioner forcefully were legitimately resisted and re 1led. On noticing strong resistance and considering petitione 's possession over the said land, M/s Greater Golconda Estate Private Limited and others decided to amicably settle the ma ter with petitioner. It was further stated that petitioner re d the fact that though he ,"r,as in peaceful possession and enj ent of the said property, the flow of title by M/s Greater Golc nda Estates Private Limited and others was also found to be le ly-valid in the eye of law and as such, petitioner had eed for the proposal of M / s Greater Golconda Estates Pri ate Limited and others to settle the matter by way of compro ise as it would be in the I I i I l t I I 4 best interest of both the parties and the same would result not only in a legally-valid title but also peaceful possession and enjoyment. With this common understanding, a De ed of Settlement bearing Document No. 263O of 2016 of Book No.l, C.S. No. 27 a9 of 20 16, dated 10.O3.2016 was execLrted between the parties, whereunder it was agreed that in respect of land in Survey No. 80/D, admeasuring Acs. 50-00 Guntas, an extent of Acs. 25-OO is allotted in petitioner's favour in lieu o[ petitioner's peaceful possession and enjoyment. Further, it was speci[rcally sta[ed that in 2O2O, when Government olficials threatened to dismantle/demolish temporary structures which u,ere set up by petitioner for their cmployees on the said land and tried to dispossess, petitioner hled Writ Petition No.97O9 of 2O20 before this Court against the governmen[. When the claim made by Telangana State and Telangana State Waqf Board and tned to interfere with peaceful possession and occupation ol petitioner, claiming title through Gazette notification and proceedings i.e. Telangana State (iazette Part-ll bearing No. 79 dated 01 I 11, l2Ol4, wherein Munthaqhab entered in Book of Endowment, Volume II at Page No 1 59 at Sl No 37 in F. No. 1,6 / RR / Reg/ 20 13 dated 13 / 12 I 20 13 was published, petitioner was constrained to file Writ Petition No. 12548 of 2O2O against the Wakf Board and others. This Court, after hearing the matter C I at length, uide Common Order allo ed both the Writ Petitions with costs of Rs.50,0O0/- to each of Petitioners to be paid by the State of Telangana and the Telan na State Waqf Board. It is further stated that the Common rder in Writ Petitions No. 2O7O7 ot 2018, 9709 of 2O2O nd 12548 of 2020 dated

30.O3.2021 was challenged before t e Hon'ble Supreme Court of lnd,ia uide SLP Nos,7154 of 2021, 195 of 2O2r,7la6-7r88 of 202 1 and the Hon'ble Supreme C rt granted status quo by order dated 05.O7 .2021 in all respec s pertaining to the property covered under the Settlement Dee 1O.O3.20 i6 and the said matter is still pending for adjudicati n

4. [t is the specific conten ion of petitioner that when an order of Status quo granted by t e Supreme Court is still in force, no proceedings much les proceedings under the provisions of the Prohibition of Be ami Property Transactions Act, 1988 can be initiated in resp t of the property covered under the Settlement Deed dated 10. .2016. The outcome of the SLP would determine whether he property is private, government or waqf. Without det ination of rights being I taken place as to ownership of th said land and when the matter is sub-judice before the Hon'ble Supreme Court, initiating the present proceedings is uncalled for and is untenable in law. Further, it wa stated by petitioner that l l 6 pursuant to receipt of impugned show cause )lotice datcd

04.O3.2O25, petitioner uide letters dated 17.3 2025 and I9.3.2O25 requested a copy of the statement rr:cordecl on

12.01.2022 to enable petitioner to provide a comprehcnsive reply. Petitioner received the said statement daLed l2.Ol 2022 on 20.O3.2025 along with summons dated 20.O3 2025. It was further statcd that the impugned notice datecl 04.03.2025 erroneously claimed that petitioner had admit.ted in the statement rccorded on 12.O1.2022 that a sltm of Rs. 30,O0,O0O/- was paicl in cash for purchase of land zrdmeasuring Acs. 25-OO Guntas, after knowing the said erroncous claim of the I"t respondent that petitioner admitted pa-ymcnt of Rs.30 Lakhs in cash petitioner was put to severe shock. surprise and dismay, since he never admitted nor claimed to hztvc paid Rs.30 lakhs in the statement recorded on 12.01.2022. It is further stated that petitioner found that the 1"t respondent had already obtained st2tement from him on 12.l .2022 ,.r,herein he answered ce rtain queries raisecl by the 1"t respondenl arnd thereafter, no proceedings were initiated by the ls' respondent for three years as such petitioner understood that he u,eis saddled u,ith the impugned notice dated 04.O3.2025 with pre- meditation as the impugned show cause notice refers to the statement dated 12.O1.2022 referring that petitioner paid t ) 7 Rs.3O.OO Lakhs as consrderation for quiring Acs.25.OO of land in Sy.No.8O, Hafeezpet Village, Seri ingampalli Mandal, Ranga Reddy District which was never swor or stated by petitioner, as such the impugned show cause no ce was issued with a pre- me ditated mind only to rope in the petitioner under the provisions of Prohibition of Benami Property Transactions Act, 1988 5 It was further stated tha if the show cause notice is an order by itself and not a show ause notice and it is pre- meditated, then the Courts are entitl d to interfere with the said order. While stating so, petitioner re ed on 1) Siemens India a. State of Mahdrashtrd I2OO7\ 2OZ L.T. 168 (SC) and 2) sBQ Steels Ltd us. Commtssioner of orzns, Guntur (2014 (30O) ELT 185 (AP). It was further stat that Settlement Deed in question was executed on 1O.O3.2O 1 , which is prior to coming into force of the Benami Transactio s (Piohibition) Amendment AcL, 2016, which took effect on O 1 . I

1.2016. In the Amendment Act of 20 16 itself, it was clearly entioned that it would be operative w.e.f. O1.11.2O16. Ther ore, on the date of the transaction or commission of the eged offence, Section 2 (9) (A) or Section 2 (9) (C) were not in existence. It is the specific contention of petitioner that sinc the very j urisd icrion of Rrypondent No.l in issuing the s ow-cause notice has been I t t 8 questloned, besides pre-meditated mind to issue the said notice, the Writ Petition would be maintainable. Whilc stating so, petitioner has relied on M/s B.R.C. Construction Compang Prioate Limited as. unioll. oJ India [(2017) S.C C Online Cal. 16142l and Nexus Feeds Limited & Others us. The Assisfant Commissioner o.f Income fax. [W.P.No. 14695 of 2021 & Batchl.

6. Per Contra, learned Standing counsel for respondents states that . respondents have rightly invoked Sections 2(9)(A) and 2(9)(D) of Prohibition of Benami Property Transactions Act, 1988 and while supporting the contents of the show cause notice, stated that the 1"t respondent had taken statement from petitioner on 12.01.2022 that petitioner had paid consideration of Rs.30.00 Lakhs for acquiring Acs,25.OO of land in Sy.No.8O of Hafeezpet Village, as such, has rightly asked for source of the same. Further the Standing Counsel also contended that petitioner can avail the remedy of filing reply to the show cause notice, as such the present writ petition is not maintainable. 7 . The question that falls for consideration is whether the impugned show cause notice is a pre-meditated notice and calling for interference of this Court or not. -"' I

8. The facts which are not ln dispute are that petitioner became co-owner of land measuring Acs. 25-00 out of Acs. 47-00 in Survey No. 8O/D, s uated at Hafeezpet Village, Serilingampally Mandal, R.R. Distri t, pursuant to a registered Settlement Deed bearing Documen No. 263O of 2016, dated

10.3.2016. The settiement deed w s executed in petitioner's favor as he was instrumental in protecting the land from encroachments and had incu ed expenditure for its prescrvation while being in Peace I possession of the same When in 2015 M/s. Greater Golco and others tried to interfere da EsLates Private Limited ith petitioner's peaceful possession and enjoYment over the aid land, such attempts to dispossess him forcefully were legiti tely resisted and rePelled On noticing petitioner's strong res tance and considering his possession over the said land, M/ Greater Golconda Estates Private Limited and others decided amicably settle the matter with petitioner. So also petitioner alized the fact that though he was in peaceful Possession a d enjoyment of the said properfy, the flow of title bY M/ s Greater Golconda Estates Private Limited and others was al lound to be legallY-valid in the eye of law, as such Petitioner h d agreed for the proPosal of M/s Greater Golconda Estates Pri settle the matter bY waY of comPr mise as it would be in the ate Limited and others to I I l0 best interest of both the parties and the same would result not only in a legally-valid title but also peaceful possession and enjoyment. With this common understanding, a Dced of Setllement bearing Document No. 2630 of 2016 dat'cd 1O.03.2Oi6 was executed between the parties, rt'hereunder it vvas agreed that in respect of land in Survey No. 80/D, admeasuring Acs. 5O-0O Guntas, an extent ol Acs. 25 O0 Cuntas is allotted in petitioner's favour in lieu of his peaccful possession and enjoyment, It is also pertinent to note that in the entire Deed of Settlement dated 10.03.2016 there is no mcntion about petitioner parting with Rs.30 0O lakhs as claimed by the 1"t respondent. The contents of the said scttlement deed reveal that the extent was parted with petitioner in resolution of a dispute between the parties. It rvas also not in dispute that when the claim made by Telangana State and Telangana State Waqf Board over the subject property and tried to interfere with the peaceful possession and occupation of petitioner, claiming title through the Gazette notification and proceedings i.e. Telangana State Gazette Part II bearlng No 79 dated 01/l|l2ol4, wherein Munthaqhab entered in Book of Endou,ment, Volume II at Page No 159 at Sl. No 37 in F.No- 16/RR/Reg/2013 dated 13 I 12 12013 was published, petitioner was constrained to file Writ Petition No.12548 of 2020 against I I the Wakf Board and others. This Co at length, vide its Common Order in 9709 of 2O2O and 12548 of 2O2O allo Rs. 50,0O0/- to each of petitioners Telangana and the Telangana State Order in W.p. Nos. 2OZO7 of 2Ot8, g 2O20 was challenged before the Hon,b vide SLP Nos.7l54 of 2021, Z19S of and the Hon'ble Supreme Court has order dated S.Z .2021 in all respects covered under the Settlement Deed a pending for adjudication. 9. A perusal of the statement that the 1"t respondent had called petit recorded the statement of petitioner bv ls apposrte to extract the relevant portio

12.O1.2022. rt after hearing the matter W.P. Nos. 2OTOZ of 2018, ed the same wiLh costs of o be paid by the Srate of aqf Board. The Common 09 of 2O2O and 12548 ot e Supreme Court of India O21,7186-7t88 of 2O21 ranted a status quo vide rtaining to the property d the said matter is stili dated 12.01.2O22 shows oner on 12.0],.2022 and srng certain queries. It of the statement dated " e,No.l 1. Kindly furnish the deta of immovable property of 25 acres of land at response to Q.No.7 Ans: Here my family includes my wi brothers namely K. Naveen Kumar, K. Rajendra K. Kiran Kumar.My family gave money of approx to Rs.3O lakh (approx.) in cash for an undivided -year 2005 06 to numerous tenants who claime qqare of the transactions between the other two registratron of Acs.72_00 of land happened at s perttnent to the purchase Ilafeezpet Village stated in Smt. K. Haritha and my umar and K. Madhavi, w/o. Rs. 1 Lakh per acre totaljng hare of 30 acres of land in as title holders. I am not arties and the tenants. The RO Kukatpally and at the l2 I time of registration, all the three parties and numberotrs tenants \\ l.ro claimed as title holdcrs \!ere all present during execution of thc Salc deeds

10. [t is also apposite to extract the relevanr portion .rs to [ron- thc 1.1 respondent put the same in the impugned show cause notict: nearly after three years without there being zrny mention about thc delay caused in issuing the said notice. "

2. AND WHEREAS, in your sworn statemcnt recorded uncler Scr:tion 19 of the Act on '12.1.2022, you stated that -\'ou acqtrired the aforesai(l 25 acres of land during the linancial year 2005 06 lor a lotal considriration of 3O lakh, purportedly paicl entirelv in cash. You further slated that thc land.was purchased from certain tenants who were rn possession based on revenue records (Faisal Patti) and Higtl Court or(ler No. 107/70 (197O). Horvever, despite your assertion, n() documcntar! evidence has been submitted by your regarding the sourcc ol Rs.30 laklr allegedlv paid by you." n I 1. It is the specific contention of petitioner that hc understood that he uras saddled with the impugned notice with pre-mcditation as thc impugned show cause notice refers to the statement dated 12.O1.2022 referring that he paid Rs.3O.0O Lacs as consideration for acquiring Acs. 25 of land in Sy.No.80, Hafeezpet Vrllage, Serilingampalli Mandal, Ranga Reddy District $,hich \vas ltever sworn or stated by petitioner as such the I impugned show cause notice dated 04.O3.2025 was issued u,ith a pre lneditated mind only to rope in the petitioner under the provisions of Prohibition of Benami Property Transactions Act, 1988 --- I l3

12. On a bare perusal of he impugncd show causc notice, it is clearly discernable that e 1"t respondent refers to somcthing which has never been tated by petitioner in his statement dated 12.1.2022 given b fore the l.t respondent in terms of Section 19 of the Act, 1988 The answer given to qucry No. I 1 of the statement dated 12.1.2 22 does not pertain to the subjcct property i.e. Acs.25.O0 rther the statement also speaks about the family members i. petitioner's wife, brothers of petitioner giving Rs. 1 lac per a re for undivided share of Acs.3O.OO of land in 2OO5-2006 o numerous tenants who claimed title holders and petitione never stated that he had personally given Rs.30.0O lakhs tow s sale consideration Whereas Acs. 25.00 re erTe d to in the impugned show cause notice dated 04.03 2025 is related to the transaction i.e. the Settlement deed ated 10.03.2016 and there is no mention about Acs.25.O0 of land being acquired with consideration of Rs.3O Lac by petiti ner in the entire s[atement of thc petitioner recorded by ths 1"t respondent oo 12.01.2022 or the Settlement Deed dated 10.O .2016. Therefore, it is very clear that the l"t respondent is t ng to confront pet it ioncr g,ith definite conclusions of his alle d guilt, as such, the show CAU SC notice gets vitiated by un irness and bias and the subsequent proceedings become an t le ceremony - I t I I \L \ t+ 1A , r rs settled principle oI lau, rhat quasi_judicial authorities, u,hile acting in exercise of its statutorv power must act fairh_ and mlrst act with an open mind while initiating the shou caus_ procceding. A show cause noticc ri; meant to givc the person proceerled against a reasonable opportunity of making his objection against the proposecl charges rndicated in the notice . At the stage of show cause n( notlce' the person procceded against -u", n. ,^,r-.:" ,LaL{se be told the charges against him so that he can take his crelens ;e and prove his innocencc. At that stage, the authority issuing the charge sheet/show cause notice, cannot. instcad of tcll.tng him the charges, conlront him q,ith definite conclusions of his alleged guilt. If that is done, as has been done it-r the present case, the entire proceeding initiated by the shorv catrse rtotice gets vitiated by unfairness and bias ar_rd thc subsequent pr()ccedings become a1 idle ceremony. i5. ln Siemerrs Jndia u. fjtrrte of Maharashtra, the Hon,ble Supreme Court had held as under ordinarily a writ court ma "" n"" ,*.,,'n.,"same IO. Although drscretion:rry juri",r,.,i.;r';' ro show cause ,rress ,,," -tl"ttu'l'n, jurisdictio. or uttar pradesh v rlralrrn ,l Director and Anolher,. M"hnt 44o) andUnion of rrdia and : scALE 262r, brt ,h" q,,."tio1r:other ni'"'n ansre, vizjhen a norice is,"." u. ,,o;##nr,r" ;,;':,,:; ."'.:'"d ^r" inter alla appears to l o1l^'" co", i., iJ,ila"".,l,J"" sharma and o". ;;;;;"" Glruram "a";;;;r",,'sc t -.n o.r,r"r'o1l.J.:til::,,:: been without includins state e'+sl speciai i(2004) 3 scc j':::H . ..:;:;.:.."[T v -r"t";;";#er uirh pre-meditation, a w ,,en if the courts directs th- -,,t petition \vourd atutorl autltorit) _---.-E-_. l5 ORDER WP.No.15382 ot 2025 ALLOWING THE W.P WITHOUT COSTS. Y'