The Supreme Court’s recent recall of its earlier judgement, which had struck down the retrospective implementation of the Benami Transactions (Prohibition) Amendment Act, 2016, has rekindled a staggering 4,800 benami transaction cases that were gathering dust at the Income Tax department offices across the country.

Exclusive data accessed by businessline reveals that these cases involve ₹12,000 crore worth of Benami assets, which were at different stages of probe and attachment proceedings initiated by the Income Tax’s ‘Benami Prohibition Units’.

The cases relate to transactions that took place over 28 years, from 1988 to 2016 after Parliament amended the law.

In addition to the 4,800 cases, I-T sleuths are also probing 3,850 more benami transaction cases from 2016 to 2024, valued at ₹8,000 crore, government sources said.

Action Resumes

The I-T Department has picked up the thread of investigation since October 18 this year, when a three-member bench of the Apex Court headed by the then Chief Justice DY Chandrachud through an interim verdict recalled an earlier judgement of August 23, 2022, which had declared provisions and amendments made by Parliament in the benami property law in 2016 “unconstitutional and manifestly arbitrary”.

These provisions relate to amendments introduced by Parliament, which broadened the statute to include imprisonment and fines for those who engaged in benami transactions between September 5, 1988, and October 25, 2016.

The amended Act stipulated that a person could be sent behind bars for benami transactions prior to the amendments came into existence.

The law was first enacted in 1988, but it was largely unenforceable as the Central Governments did not create any effective mechanism to implement it.

After a gap of 28 years, the government expanded the statute in 2016 with the intent to tighten the net around Benami transactors and the Income Tax Department was made the nodal agency for implementation.

Accordingly, the I-T Department sprang into action, issuing notices to companies and individuals, working within the premise of the retrospective clause of the Act.

Crackdown Halted

However, in 2022, the Supreme Court ruled that the law does not have any retrospective application, and the authorities cannot initiate or continue criminal prosecution or confiscation proceedings for transactions entered into before the legislation came into force in 2016.

The I-T Department had to halt the crackdown on black money through benami transactions of businessmen, politicians and bureaucrats.

However, triggered by the October 18, 2024, interim verdict that recalls the 2022 judgement, the Department is analysing cases again but will have to wait for the final judgement to initiate action.

However, after a lapse of eight years since 2016, the Department may strain to recover properties under the scanner or to track the proceeds of financial crimes. “Many entities used for such benami transactions would have either liquidated or dissolved or have been struck off from the Ministry of Corporate Affairs roaster making it difficult to identify them for attachment proceedings,” said sources remarked.

Regional Focus

Of the 4,800 cases in which the probe will restart, the Central region covering the I-T department’s jurisdiction over Madhya Pradesh and Chhattisgarh accounts for about 1,500 benami cases, followed by 1,200 in the Southern region, which includes Tamil Nadu, Karnataka and Andhra Pradesh and Telangana. The Northern region, which spans Delhi, Punjab, Haryana, UP and Rajasthan has 900 cases, the Western region of Maharashtra and Gujarat has 800 cases, and the Eastern region covering West Bengal, Bihar and North-eastern States has 400 cases.

Though the number of cases registered was maximum in the Central region, its share in terms of value of attached benami assets was the lowest at ₹200 crore. The value of assets seized at ₹3,100 crore was maximum in the Northern region, and the value of assets in the Southern region was ₹2,300 crore.