[Opinion] Need to Transfer the Jurisdiction of Benami Cases to ITAT

Parveen Kumar Bansal & Ruchesh Sinha – [2026] 185 taxmann.com 40 (Article)

I. Introduction

The evolution of India’s tribunal system reflects a continuous effort by the legislature and the executive to balance specialisation, efficiency, and accessibility in the delivery of justice. Over the years, multiple tribunals have been constituted, merged, and restructured to streamline adjudication in complex domains such as taxation, financial crimes, and property forfeiture. However, with changing legal landscapes and increasing overlap between statutory frameworks, it becomes imperative to periodically reassess whether existing institutional arrangements continue to serve their intended purpose effectively.

One such area requiring urgent reconsideration is the appellate mechanism under the Prohibition of Benami Property Transactions Act, 1988 (“PBPT Act”). The Benami Tribunal constituted under Section 30 of the PBPT Act presently functions within the consolidated “Appellate Tribunal” constituted under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (“SAFEMA”). However, given the nature of its functions, which are adjudicatory, quasi-judicial, and appellate in character, there is a compelling need to reconsider this administrative positioning for enhanced accessibility, expertise, efficiency and improved Ease of Justice.

This issue assumes particular importance in the broader context of ongoing reforms aimed at strengthening India’s tribunal system and ensuring that specialised disputes are adjudicated by forums best equipped in terms of subject-matter expertise and institutional capacity.

This article is firmly rooted in and fully aligned with the thought process that justice must be accessible, affordable, and delivered in a timely manner, regardless of economic or social background, and that Ease of Justice is an essential pillar supporting Ease of Doing Business and Ease of Living. There is a need for decentralisation, simplification of legal processes, reduction of litigation burdens, and enhancement of citizen-centric justice delivery.

In this context, the present article examines the historical evolution, current structure, and practical challenges of the existing appellate framework, and makes a compelling case for transferring jurisdiction over benami matters to the Income Tax Appellate Tribunal (ITAT), a body uniquely equipped in terms of expertise, infrastructure, and nationwide presence to handle such disputes.

II. Background and Evolution of the Appellate Framework

The Appellate Tribunal was originally constituted in the year 1977 as the Appellate Tribunal for Forfeited Property (“ATFP”) under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976(“SAFEMA”). Being constituted in the late 1970s, it is among the earliest tribunals established in India. SAFEMA applies to persons convicted under the Sea Customs Act, 1878 or the Customs Act, 1962, as well as persons covered under the Foreign Exchange Regulation Act, 1947 (FERA) and FERA, 1973. The SAFEMA Act also extends to persons detained under The Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (“COFEPOSA”), whose detention orders have not been revoked or set aside, subject to conditions prescribed in Section 2 of the SAFEMA Act. The SAFEMA Act primarily deals with forfeiture of illegally acquired properties of such persons, and includes within its ambit their relatives, associates, and holders of such properties unless they can prove that they are bona fide transferees for adequate consideration.

In 1985, the Narcotic Drugs and Psychotropic Substances Act (“NDPS Act”) was enacted to create a comprehensive legal framework to address narcotic drugs, psychotropic substances, trafficking offences, and to implement international conventions. The Act was amended in 1989, introducing Chapter VA relating to seizure, freezing, and forfeiture of illegally acquired properties derived from narcotics-related offences. The provisions of this Chapter were analogous to those under SAFEMA, and the ATFP was consequently vested with jurisdiction to hear cases arising under the NDPS Act as well.

In 2003, the Prevention of Money Laundering Act (“PMLA”) was enacted, following the introduction of the Prevention of Money-Laundering Bill, 1998 and subsequent parliamentary review. Section 25 of the PMLA mandated the Central Government to establish an Appellate Tribunal for hearing appeals against the Adjudicating Authority and other authorities under the Act.

The Finance Act, 2016 introduced significant reforms relating to the merger of various tribunals. It substituted Section 25 of PMLA with a new provision designating the Appellate Tribunal constituted under SAFEMA as the Appellate Tribunal for hearing appeals under PMLA with effect from 01.06.2016. The same Act also renamed the “Appellate Tribunal for Forfeited Property” as simply the “Appellate Tribunal”.

In the same year, following the enactment of the Benami Transactions (Prohibition) Amendment Act, 2016, a notification dated 25.10.2016 was issued by the Central Board of Direct Taxes (“CBDT”) stating that the Appellate Tribunal established under Section 25 of the PMLA shall also discharge the functions of the Appellate Tribunal under the PBPT Act.

Subsequently, the Finance Act, 2017 merged the Appellate Tribunal for Foreign Exchange (“ATFE”), constituted under Section 18 of the Foreign Exchange Management Act, 1999 (“FEMA”) with the Appellate Tribunal under SAFEMA.

As a result of this series of legislative developments and mergers, the present Appellate Tribunal represents a consolidated adjudicatory body comprising the tribunals originally established under SAFEMA, PMLA, and FEMA. It now hears appeals under five central Acts, namely SAFEMA, NDPS Act, PMLA, PBPT Act (as amended in 2016), and FEMA.

The Appellate Tribunal adjudicates appeals and related petitions arising from attachment and forfeiture orders passed by the Competent Authority under SAFEMA and the NDPS Act, orders of the Adjudicating Authority and other authorities under PMLA, orders issued by the Income Tax Department under the PBPT Act, and orders imposing penalties or fines under FEMA issued by Financial Intelligence Unit, India and other authorities. It is a national-level tribunal headquartered in New Delhi and presently has no permanent benches elsewhere, comprising a Chairman and four Members.

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