Background: This Act called The Prohibition of Benami Property Transaction Act 1988 (w.e.f Sept-1988) subsequently name substituted by THE Benami Transaction (Prohibition) Amendment Act, 2016 ( w.e.f Nov-2016).
Benami Transaction (As Amended By Finance (No. 2) Act 2019)
DEFINITION (u/s 2)
BENAMI PROPERTY: Any property which is subject matter of Benami transaction. It also included any property.
3. Tangible and,
4. Intangible etc.
5. Corporeal or incorporeal.
BENAMIDAR: Any person or a fictitious person in whose name the Benami Property Transferred or held , it includes a person who lends his Name.
BENEFICIAL OWNER: A person whether his identity known or not, for whose benefit the Benami property held by a Benamidar.
BENAMI TRANSACTION: Is a transaction or arrangement
A) Where the property is transferred to or held by person (Benamidar) and consideration for such property has been provided or paid by another person (Beneficial owner). And
The property is held for the immediate or future benefit directly or indirectly to the person (Beneficial owner) providing the consideration.
Eg : A property purchased and registered in the name of Mr B (Benamidar ) and consideration is provided or paid by Mr C ( Beneficial owner). Therefore Mr B is only agree to hold the property Point to remember before deciding Benami Transaction.
1. Transferred of property actually take place;
2. Consideration is paid or provided by Beneficial owner;
3. Both Benamidar and Beneficial owner is real & not Fictitious or non-existent,
4. Benamidar is aware about transferred of property.
Exception to above is;
1. Karta or member of HUF hold property, and property is held for his benefit or benefit of member of HUF & consideration paid from known source.
2. Property held by a person in Fiduciary capacity (i.e. trustee, executor, partner, agent etc.) for the benefit of other person.
3. Property held by Individual in name of Spouse or Child & consideration paid from known source.
4. Property held by individual in joint names of self & brother/sister/lineal etc.
B) A transaction or an arrangement in respect of property carried out or made in fictitious name.
C) Owner of property (Benamidar) is not aware or denies knowledge of transaction.
D) A person (Beneficial owner) providing the consideration is not traceable or is fictitious.
PROHIBITION OF BENAMI TRANSACTION
Where any person enters into a benami transaction in order to defeat the provisions of any law or to avoid payment of statutory dues or to avoid payment to creditors, the beneficial owner, benamidar and any other person who abets or induces any person to enter into the benami transaction, shall be guilty of the offence of benami transaction.
Such person if found guilty of the offence of benami Transaction shall be punishable with rigorous imprisonment for a term which shall not be less than one year, but which may extend to seven years and shall also be liable to fine which may extend to twenty-five per cent. of the fair market value of the property.
Any person who is required to furnish information under this Act knowingly gives false information to any authority or furnishes any false document in any proceeding under this Act.
Shall be punishable with rigorous imprisonment for a term which shall not be less than six months but which may extend to five years and shall also be liable to fine which may extend to ten per cent. of the fair market value of the property .
ATTACHMENT, ADJUDICATION AND CONFISCATION (u/s 24)
Where the Initiating Officer,
On the basis of material fact in his possession
Has reason to believe that any person is a benamidar in respect of a property, he may, after recording reasons in writing, issue a notice to the person to show cause within such time as may be specified in the notice.
A copy of notice also issued to beneficial owner if his identity is known
If Initiating officer is of the opinion that the person in possession of the property held benami may alienate (Transfer ownership of (property rights) to another person or group)the property during specified period in the notice With prior Approval of Approving Authority, Initiating officer provisionally attach the property in the manner as prescribed.
But not exceeding 90 days (from last day of the month in which notice Serve)
MANNER OF SERVICE OF NOTICE (u/s25)
A notice may be served on the person either by
Notice may be addressed to
PROHIBITION ON TRANSFER OF PROPERTY BY BENAMIDAR (u/s 6)
CONFISCATION (u/s 27)
Where an order is passed in respect of any property under sub-section (3) of section 26 holding such property to be a benami property, 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 under sub-section (1),
1. All the rights and title in such property shall vest absolutely in the Central Government free of all encumbrances and no compensation shall be payable in respect of such confiscation.
2. Any right of any third person created in such property with a view to defeat the purposes of this Act shall be null and void.
3. Where no order of confiscation is made upon the proceedings under this Act attaining finality, no claim shall lie against the Government.
4. The Administrator shall have the power to receive and manage the property, in relation to which an order of confiscation under sub-section (1) of section 27 has been made, in such manner and subject to such conditions, as may be prescribed.
5. The Central Government may, by order published in the Official Gazette, notify as many of its officers as it thinks fit, to perform the functions of Administrators.
6. The Administrator shall also take suh measures, as the Central Government may direct, to dispose of the property which is vested in the Central Government under sub-section (3) of section 27, in such manner and subject to such conditions as may be prescribed.
POSSESSION OF PROPERTY (u/s 29)
Where an order of confiscation in respect of a property has been made,
1. The Administrator shall proceed to take the possession of the property.
2. The Administrator shall,—
3. by notice in writing, order within seven days of the date of the service of notice to any person( Benamidar)
4. To surrender or deliver possession thereof to the Administrator or any other person duly authorised in writing by him in this behalf;
5. In the event of non-compliance of the order referred to in clause (a), or if in his opinion, taking over of immediate possession is warranted,
APPEALS TO APPELLATE TRIBUNAL (AT) (u/s 46)
1 .Any person
2. Initiating Officer,
3. Person (Benamidar or Beneficial owner)
Aggrieved by an order of the Adjudicating Authority may appeal within 45 days from the date of that order, in such form & along with such fees as may be prescribed to the Appellate Tribunal against the order of Adjudicating Authority.
2.The Appellate Tribunal may entertain any appeal after the said period of 45 days,if it is satisfied that the appellant was prevented , by sufficient cause
3.Appellate Tribunal may after giving the parties to the appeal an opportunity of being heard, pass such orders thereon as it think fit.
4. An AT shall have the power to
1. To determine a case finally.
2. To ask of additional evidence
3. To require any document or witness to be examined
4. To frame issue
5. To pass final order and affirm
5. The AT as far as possible may hear & finally decide the appeal within a period of 1 year from the last date of the month in which appeal is filed.
RECTIFICATION OF MISTAKES (u/s 47)
1) The Appellate Tribunal or the Adjudicating Authority may, in order to rectify any mistake apparent on the face of the record, amend any order made by it within a period of one year from the end of the month in which the order was passed.
2) No amendment shall be made under sub-section (1), if the amendment is likely to affect any person prejudicial, unless he has been given notice of intention to do so and has been given an opportunity of being heard.