INTRODUCTION
Benami property means any property which is the subject matter of a Benami transaction and also includes the proceeds from such property
Benami transaction
As par section 2(9) "benami transaction" means,—
(A) A transaction or an arrangement—
(a) Where a property is transferred to or is held by, a person and the consideration for such property has been provided, or paid by, another person; and
(b) the property is held for the immediate or future benefit, direct or indirect, of the person who has provided the consideration,
(B) a transaction or an arrangement in respect of a property carried out or made in a fictitious name; or
(C) a transaction or an arrangement in respect of a property where the owner of the property is not aware of, or, denies knowledge of, such ownership
(D) A transaction or an arrangement in respect of a property where the person providing the consideration is not traceable or is fictitious
Transactions will not be regarded as Benami transactions:
• HUF paid for Karta or a member of HUF.
• A person is standing in a fiduciary capacity for the benefits of others like trustees, executors, partners, directors, a depository.
• In the name of spouse or child out of known sources.
• In the name of brother, sister, lineal ascendant or descendent and the individual is joint owner and the consideration has been provided out of known sources.
it is hereby declared that Benami transaction shall not include any transaction involving the allowing of possession of any property to be taken or retained in part performance of a contract referred to in section 53A of the Transfer of Property Act, 1882 (4 of 1882), if, under any law for the time being in force,
Consideration for such property has been provided by the person to whom the possession of a property has been allowed but the person who has granted possession thereof continues to hold ownership of such property;
Stamp duty on such transaction or arrangement has been paid, and The contract has been registered
PROPERTY MEANS
Assets of any kind, whether movable or immovable, tangible or intangible, corporeal or incorporeal and includes any right or interest or legal documents or instruments evidencing to title to or interest in the property and where the property is capable of conversion into other forms, then the property in the converted form and also includes proceeds from the property.
Authorities under Benami Property Act,
Namely:—
(a) The Initiating Officer
(b) The Approving Authority
(c) The Administrator
(d) The Adjudicating Authority
(e) Appellate Tribunal
Adjudication process under Benami Act
If Initiating Officer has reason to believe that any person is a benamidar in respect of a property, he may, issue a notice to the person to show cause why the property should not be treated as benami property within the time specified in the notice. He must record the reasons in writing.
On receipt of reference u/s 24(5), the adjudicating authority issue notice within 30 days from the date of reference to
a) Benamidar
b) Beneficial owner
c) Any interested party including banking company
d) Any person who has made claim of property.
If the property is held jointly, notice to all such persons
Attachment of property provisionally
if the Initiating Officer has reason to believe that the property held is a benami property and the notified person may alienate such property during the period specified in the notice, he may, by order in writing, attach provisionally the property in the manner as may be prescribed, for a period not exceeding ninety days from the date of issue of notice
Refer to Adjudicating Authority:
Where the Initiating Officer passes an order continuing the provisional attachment of the property or passes an order provisionally attaching the property, he shall, within fifteen days from the date of the attachment, draw up a statement of the case and refer it to the Adjudicating Authority.
ISUUE NOTICE
Adjudicating Authority shall issue notice within a period of thirty days from the date on which a reference has been received by Initiating Officer
Where the property is held jointly by more than one person, the Adjudicating
Authority shall serve notice to all persons holding the property:
Retain books and account
Where any books of account or other documents are produced before the authority in any proceedings under this Act and the authority in this behalf has reason to believe that any of the books of account or other documents are required to be impounded and retained for any inquiry under this Act, it may impound and retain the books of account or other documents for a period not exceeding three months from the date of order of attachment.
Where the Adjudicating Authority is satisfied that some part of the properties in respect of which reference has been made to him is benami property, but is not able to specifically identify such part, he shall record a finding to the best of his judgment as to which part of the properties is held benami.
A subsequent reasonable opportunity of hearing to the benamidar the Adjudicating Authority may pass an order either revoking or confirming the order of Attachment. The Adjudicating Authority shall, after giving an opportunity of being heard to the person concerned, make an order confiscating the property held to be a benami property.
Where an order of confiscation has been made, all the rights and title in such property transfer to the Central Government, and no compensation shall be payable in respect of such confiscation.
Administrator
The Administrator shall have the power to receive and manage the property, in relation to which an order of confiscation is made. He also has the powers to enforce possession by giving reasonable notice to the occupier of such property.
Appeal against the order
An appeal from the order of the Adjudicating Authority can be made to the Appellate Tribunal established under the Act, within 45 days of the date of such order.
The Appellate Tribunal, as far as possible, may hear and finally decide the appeal within a period of one year from the last date of the month in which the appeal is filed
APPEAL TO HIGH COURT
Any party aggrieved by any decision or order of the Appellate Tribunal may file an appeal to the High Court within a period of sixty days from the date of Communication of the decision or order of the Appellate Tribunal to him..
The High Court may determine any issue which—has not been determined by the Appellate Tribunal; or has been wrongly determined by the Appellate Tribunal
Consequences of entering into Benami transactions
- As per the provisions of Prohibition of Benami Property Transactions Act, entering into benami transactions is prohibited.
- This Act further provides that whosoever enters into any benami transactions shall be punishable with rigorous imprisonment for a term which shall not be less than one year and shall not exceed seven years.
- In addition to this, fine of 25% of the fair market value of the property shall be payable.
- Properties that are held as benami are liable to be confiscated by the Government without payment of any compensation.
Settlement Commission u/s 245H grants immunity under FEMA, PMLA and Income Tax Act but there is no immunity under Benami Properties Act.
Section 67 of the Benami Properties Act has over riding effect over any other laws.
