The Benami Transaction (Prohibition) Amendment Act received the assent of President on the 10th August, 2016.
The act defines “Benami property” as any property “which is the subject matter of a Benami transaction and also includes the proceeds from such property.”
Here “Benami transaction” means, “(a) A transaction or an arrangement, where a property is transferred to, or is held by, a person, and the consideration for such property has been 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, except when the property is held by the Karta, or a member of a Hindu undivided family.”
Under this act, there would be four authorities to look into the cases concerning Benami act, and undertake required investigations. For the purpose of same, the bill seeks to establish four authorities, namely, (a) the Initiating Officer; (b) the Approving Authority; (c) the Administrator; and (d) the Adjudicating Authority.
Coming to the point of confiscation and reproach, the bill states that if the “ Initiating Officer, on the basis of material in their possession, has reason to believe that any person is a benamidar”, and after conducting appropriate investigation finds someone at fault , can send a notice seeking hold of a property for a time period of 90 days. They also have the right to continue the ‘holding’ of the property by passing an order post 90 days time period.
Thereafter, if the initiating officer passes an order to continue holding the property, the case is referred to the adjudicating authority for further review. Upon thorough consideration of all the data and evidence gathered, they will take a decision as to whether or not declare any property Benami.
The bill seeks to “establish an Appellate Tribunal to hear appeals against the orders of the Adjudicating Authority under this Act.”
The bill, also, provisions term or penalty for “whoever is 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.”