THE BENAMI TRANSACTIONS (PROHIBITION) AMENDMENT BILL, 2015

THE BENAMI TRANSACTIONS (PROHIBITION)
AMENDMENT BILL, 2015
A
BILL
further to amend the Benami Transactions (Prohibition) Act, 1988.
BE it enacted by Parliament in the Sixty-sixth Year of the Republic of India as follows:—
1. (1) This Act may be called the Benami Transactions (Prohibition) Amendment
Act, 2015.
(2) It shall come into force on such date as the Central Government may, by notification
in the Official Gazette, appoint, and different dates may be appointed for different provisions
of this Act and any reference in any such provision to the commencement of this Act shall be
construed as a reference to the coming into force of that provision.
Short title and
commencement.
AS INTRODUCED IN LOK SABHA
Bill No. 156 of 2015
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2. In the Benami Transactions (Prohibition) Act, 1988 (hereinafter referred to as the
principal Act), before section 1, the following heading shall be inserted, namely:—
‘‘CHAPTER I
PRELIMINARY.’’
3. In section 1 of the principal Act, for sub-section (1), the following sub-section shall
be substituted, namely:—
“(1) This Act may be called the prohibition of Benami Property Transactions
Act, 1988.”.
4. For section 2 of the principal Act, the following section shall be substituted,
namely:—
2. In this Act, unless the context otherwise requires,—
(1) “Adjudicating Authority” means the Adjudicating Authority appointed
under section 7;
(2) “Administrator” means an Income-tax Officer as defined in clause (25)
of section 2 of the Income-tax Act, 1961;
(3) “Appellate Tribunal” means the Appellate Tribunal established under
section 30;
(4) “Approving Authority” means an Additional Commissioner or a Joint
Commissioner as defined in clauses under (1C) and (28C) respectively of
section 2 of the Income-tax Act, 1961;
(5) “attachment” means the prohibition of transfer, conversion, disposition
or movement of property, by an order issued under this Act;
(6) “authority” means an authority referred to in sub-section (1) of
section 18;
(7) “banking company” means a company to which the provisions of the
Banking Regulation Act, 1949, applies and includes any bank or banking
institution referred to in section 51 of that Act;
(8) “benami property” means any property which is the subject matter of
a benami transaction and also includes the proceeds from such property;
(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,
except when the property is held by—
(i) a Karta, or a member of a Hindu undivided family, as the case may
be, and the property is held for his benefit or benefit of other members in
the family and the consideration for such property has been provided or
paid out of the known sources of income of the Hindu undivided family;
(ii) a person standing in a fiduciary capacity for the benefit of another
person towards whom he stands in such capacity and includes a trustee,
executor, partner, director of a company, a depository or a participant as an
agent of a depository under the Depositories Act, 1996 and any other
person as may be notified by the Central Government for this purpose;
Insertion of 45 of 1988.
new heading
before
section 1.
Substitution of
new section
for section 2.
Definitions.
43 of 1961.
43 of 1961.
10 of 1949.
22 of 1996.
45 of 1988.
Amendment
of section 1.
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(iii) any person being an individual in the name of his spouse or in
the name of any child of such individual and the consideration for such
property has been provided or paid out of the known sources of income of
the individual;
(iv) any person in the name of his brother or sister or lineal ascendant
or descendant, where the names of brother or sister or lineal ascendant or
descendent and the individual appear as joint-owners in any document,
and the consideration for such property has been provided or paid out of
the known sources of income of the individual; or
(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;
(10)”benamidar” means a person or a fictitious person, as the case may
be, in whose name the benami property is transferred or held and includes a
person who lends his name;
(11) “Bench” means a Bench of the Adjudicating Authority or the Appellate
Tribunal, as the case may be;
(12)”beneficial owner” means a person, whether his identity is known or
not, for whose benefit the benami property is held by a benamidar;
(13) “Board” means the Central Board of Direct Taxes constituted under
the Central Boards of Revenue Act, 1963;
(14) “director” shall have the same meaning as assigned to it in clause (34)
of section 2 of the Companies Act , 2013;
(15) “executor” shall have the same meaning as assigned to it in clause (c)
of section 2 of the Indian Succession Act, 1925;
(16)”fair market value”, in relation to a property, means—
(i) the price that the property would ordinarily fetch on sale in the
open market on the date of the transaction; and
(ii) where the price referred to in sub-clause (i) is not ascertainable,
such price as may be determined in accordance with such manner as may
be prescribed;
(17) “firm” shall have the same meaning as assigned to it in section 4 of
the Indian Partnership Act, 1932 and shall include a limited liability partnership
as defined in the Limited Liability Partnership Act, 2008;
(18) “High Court” means—
(i) the High Court within the jurisdiction of which the aggrieved
party ordinarily resides or carries on business or personally works for
gain; and
(ii) where the Government is the aggrieved party, the High Court
within the jurisdiction of which the respondent, or in a case where there
are more than one respondent, any of the respondents, ordinarily resides
or carries on business or personally works for gain;
54 of 1963.
18 of 2013.
39 of 1925.
9 of 1932.
6 of 2009.
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(19) “Initiating Officer” means an Assistant Commissioner or a Deputy
Commissioner as defined in clauses (9A) and (19A) respectively of section 2 of
the Income-tax Act, 1961;
(20) “Member” means the Chairperson or the Member of the Adjudicating
Authority or the Appellate Tribunal, as the case may be;
(21) “notification” means a notification published in the Official Gazette
and the expression “notified” shall be construed accordingly;
(22) “partner” shall have the same meaning as assigned to it in section 4 of
the Indian Partnership Act, 1932, and shall include,—
(a) any person who, being a minor, has been admitted to the benefits
of partnership; and
(b) a partner of a limited liability partnership formed and registered
under the Limited Liability Partnership Act, 2008;
(23) “partnership” shall have the same meaning as assigned to it in section
4 of the Indian Partnership Act, 1932, and shall include a limited liability
partnership formed and registered under the Limited Liability Partnership
Act, 2008;
(24) “person” shall include—
(i) an individual;
(ii) a Hindu undivided family;
(iii) a company;
(iv) a firm;
(v) an association of persons or a body of individuals, whether
incorporated or not,
(vi) every artificial juridical person, not falling under subclauses
(i) to (v);
(25) “prescribed” means prescribed by rules made under this Act;
(26) “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 title to or interest in the property
and where the property is capable of conversion into some other form, then the
property in the converted form and also includes the proceeds from the property;
(27) “public financial institution” shall have the same meaning as assigned
to it in clause (72) of section 2 of the Companies Act, 2013;
(28) “Special Court” means a Court of Session designated as Special
Court under sub-section (1) of section 50;
(29) “transfer” includes sale, purchase or any other form of transfer of
right, title, possession or lien;
(30) “trustee” means the trustee as defined in the section 3 of the Indian
Trusts Act, 1882.
(31) words and expressions used herein and not defined in this Act but
defined in the Indian Trusts Act, 1882, the Indian Succession Act, 1925, the
Indian Partnership Act, 1932, the Income-tax Act, 1961, the Depositories Act,
1996, the Prevention of Money-Laundering Act, 2002, the Limited Liability
Partnership Act, 2008 and the Companies Act, 2013, shall have the same meanings
respectively assigned to them in those Acts.’.
43 of 1961.
9 of 1932.
9 of 1932.
18 of 2013.
2 of 1882.
2 of 1882.
39 of 1925.
9 of 1932.
43 of 1961.
22 of 1996.
15 of 2003.
6 of 2009.
18 of 2013.
6 of 2009.
6 of 2009.
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5. Before section 3 of the principal Act the following heading shall be inserted,
namely:—
“CHAPTER II
PROHIBITION OF BENAMI TRANSACTIONS”.
6. In section 3 of the principal Act,—
(a) sub-section (2) shall be omitted;
(b) sub-section (3) shall be re-numbered as sub-section (2) thereof;
(c) after sub-section (2) as so re-numbered, the following sub-section shall be
inserted, namely:—
“(3) Whoever enters into any Benami transaction on and after the date of
commencement of the Benami Transactions (Prohibition) Amendment Act, 2015,
shall, notwithstanding anything contained in sub-section (2), be punishable in
accordance with the provisions contained in Chapter VII.”;
(d) sub-section (4) shall be omitted.
7. In section 4 of the principal Act, sub-section (3) shall be omitted.
8. For sections 5 and 6 of the principal Act, the following sections shall be substituted,
namely:—
“5. Any property, which is subject matter of benami transaction, shall be liable to
be confiscated by the Central Government.
6. (1) No person, being a benamidar shall re-transfer the Benami property held
by him to the beneficial owner or any other person acting on his behalf.
(2) Where any property is re-transferred in contravention of the provisions of
sub-section (1), the transaction of such property shall be deemed to be null and void.”.
9. After section 6 of the principal Act, the following shall be inserted, namely:—
‘CHAPTER III
AUTHORITIES
7. The Central Government shall, by notification, appoint one or more
Adjudicating Authorities to exercise jurisdiction, powers and authority conferred by
or under this Act.
8. An Adjudicating Authority shall consist of a Chairperson and at least two
other Members.
9. (1) A person shall not be qualified for appointment as the Chairperson or a
Member of the Adjudicating Authority unless he,—
(a) has been a member of the Indian Revenue Service and has held the
post of Commissioner of Income-tax or equivalent post in that Service; or
(b) has been a member of the Indian Legal Service and has held the post
of Joint Secretary or equivalent post in that Service.
(2) The Chairperson and other Members of the Adjudicating Authority shall be
appointed by the Central Government in such manner as may be prescribed.
(3) The Central Government shall appoint the senior-most Member to be the
Chairperson of the Adjudicating Authority.
Amendment
of section 3.
Amendment
of section 4.
Substitution of
new sections
for sections 5
and 6.
Property held
benami liable
t o
confiscation.
Prohibition
on re-transfer
of property
by
benamidar.
Insertion of
new Chapters
III to VII.
Adjudicating
Authority.
Composition
of Authority.
Qualifications
for
appointment
of
Chairperson
and Members.
Insertion of
new heading
before section 3.
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10. (1) Subject to the provisions of this Act,—
(a) the jurisdiction of the Adjudicating Authority may be exercised by
Benches thereof;
(b) a Bench may be constituted by the Chairperson of the Adjudicating
Authority with two Members, as the Chairperson may deem fit;
(c) the Benches of the Adjudicating Authority shall ordinarily sit in the
National Capital Territory of Delhi and at such other places as the Central
Government may, in consultation with the Chairperson, by notification, specify;
(d) the Central Government shall, by notification, specify the areas in
relation to which each Bench of the Adjudicating Authority may exercise
jurisdiction.
(2) Notwithstanding anything contained in sub-section (1), the Chairperson
may transfer a Member from one Bench to another Bench.
11. The Adjudicating Authority shall not be bound by the procedure laid down
by the Code of Civil Procedure, 1908, but shall be guided by the principles of natural
justice and, subject to the other provisions of this Act, the Authority shall have
powers to regulate its own procedure.
12. The Chairperson and Members of the Adjudicating Authority shall hold
office for a term not exceeding five years from the date on which they enter upon their
office, or until they attain the age of sixty- two years, whichever is earlier and shall not
be eligible for re-appointment.
13. (1) The salary and allowances payable to, and the other terms and conditions
of service of the Chairperson and other Members of the Adjudicating Authority shall
be such as may be prescribed .
(2) Any vacancy caused to the office of the Chairperson or any other Member
shall be filled up within a period of three months from the date on which such vacancy
occurs.
14. (1) The Central Government may, by order, remove from office the Chairperson
or other Members the Adjudicating Authority, if the Chairperson or such other Member,
as the case may be,—
(a) has been adjudged as an insolvent; or
(b) has been convicted of an offence, involving moral turpitude; or
(c) has become physically or mentally incapable of acting as a Member; or
(d) has acquired such financial or other interest as is likely to affect
prejudicially his functions; or
(e) has so abused his position as to render his continuance in office is
prejudicial to the public interest.
(2) No Chairperson or Member shall be removed from his office under clause (d)
or clause (e) of sub-section (1) unless he has been given a reasonable opportunity of
being heard in the matter.
15. (1) In the event of the occurrence of any vacancy in the office of the Chairperson
by reason of his death, resignation or otherwise, the senior-most Member shall act as the
Chairperson of the Adjudicating Authority until the date on which a new Chairperson,
appointed in accordance with the provisions of this Act to fill such vacancy, enters upon his
office.
Constitution
of Benches of
Adjudicating
Authority.
5 of 1908.
Power of
Adjudicating
Authority to
regulate its
own
procedure.
Term of
office of
Chairperson
and Members
of
Adjudicating
Authority.
Terms and
conditions of
services of
Chairperson
and Members
of
Adjudicating
Authority.
Removal of
Chairperson
and Members
of
Adjudicating
Authority.
Member to
act as
Chairperson
in certain
circumstances.
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(2) When the Chairperson is unable to discharge his functions owing to absence,
illness or any other cause, the senior-most Member shall discharge the functions of
the Chairperson until the date on which the Chairperson resumes his duties.
16. No act or proceeding of the Adjudicating Authority shall be invalid merely by
reason of—
(a) any vacancy in, or any defect in the constitution of the Authority; or
(b) any defect in the appointment of a person acting as a Member of the
Authority; or
(c) any irregularity in the procedure of the Authority not affecting the
merits of the case.
17. (1) The Central Government shall provide each Adjudicating Authority with
such officers and employees as that Government may think fit.
(2) The officers and employees of the Adjudicating Authority shall discharge
their functions under the general superintendence of the Chairperson of the
Adjudicating Authority.
18. (1)The following shall be the authorities for the purposes of this Act,
namely:—
(a) the Initiating Officer;
(b) the Approving Authority;
(c) the Administrator; and
(d) the Adjudicating Authority.
(2) The authorities shall exercise all or any of the powers and perform all or any
of the functions conferred on, or, assigned, as the case may be, to it under this Act or
in accordance with such rules as may be prescribed.
19. (1) The authorities shall, for the purposes of this Act, have the same powers
as are vested in a civil court under the Code of Civil Procedure, 1908, while trying a suit
in respect of the following matters, namely:—
(a) discovery and inspection;
(b) enforcing the attendance of any person, including any official of a
banking company or a public financial institution or any other intermediary or
reporting entity, and examining him on oath;
(c) compelling the production of books of account and other documents;
(d) issuing commissions;
(e) receiving evidence on affidavits; and
(f) any other matter which may be prescribed.
(2) All the persons summoned under sub-section (1) shall be bound to attend in
person or through authorised agents, as any authority under this Act may direct, and
shall be bound to state the truth upon any subject respecting which they are examined
or make statements, and produce such documents as may be required.
(3) Every proceeding under sub-section (1) or sub-section (2) shall be deemed
to be a judicial proceeding within the meaning of section 193 and section 228 of the
Indian Penal Code.
(4) For the purposes of this Act, any authority under this Act may requisition the
service of any police officer or of any officer of the Central Government or State
Vacancies, etc.
not to
invalidate
proceedings
of
Adjudicating
Authority.
Officers and
employees of
Adjudicating
Authority.
Authorities
and
jurisdiction.
Powers of
5 of 1908. authorities.
45 of 1860.
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Government or of both to assist him for all or any of the purposes specified in subsection
(1), and it shall be the duty of every such officer to comply with the requisition
or direction.
(5) For the purposes of this section, “reporting entity” means any intermediary
or any authority or of the Central or the state Government or any other person as may
be notified in this behalf.
Explanation.—For the purposes of sub-section (5), “intermediary” shall have
the same meaning as assigned to it in clause (n) of sub-section (1) of section 2 of the
Prevention of Money Laundering Act, 2002.
20.The following officers shall assist the authorities in the enforcement of this
Act, namely:—
(a) income-tax authorities appointed under sub-section (1) of section 117
of the Income- tax Act, 1961;
(b) officers of the Customs and Central Excise Departments;
(c) officers appointed under sub-section (1) of section 5 of the Narcotic
Drugs and Psychotropic Substances Act, 1985;
(d) officers of the stock exchange recognised under section 4 of the
Securities Contracts (Regulation) Act, 1956;
(e) officers of the Reserve Bank of India constituted under sub-section (1)
of section 3 of the Reserve Bank of India Act, 1934;
(f) police;
(g) officers of enforcement appointed under sub-section (1) of section 36
of the Foreign Exchange Management Act, 1999;
(h) officers of the Securities and Exchange Board of India established
under section 3 of the Securities and Exchange Board of India Act, 1992;
(i) officers of any other body corporate constituted or established under a
Central or a State Act;
(j) such other officers of the Central Government, State Government, local
authorities or banking companies as the Central Government may, by notification,
specify, in this behalf.
21. (1) The Initiating Officer or the Approving Authority or the Adjudicating
Authority shall have power to require any officer of the Central Government or State
Government or a local body or any person or officer who is responsible for registering
and maintaining books of account or other documents containing a record of any
transaction relating to any property or any other person to furnish any information in
relation to any person, point or matter as in his opinion shall be useful for or relevant
for the purposes of this Act.
(2) Without prejudice to sub-section (1), every officer or person referred to in
sub-section (1) shall furnish such information to any authority under this Act in such
form and manner as may be prescribed.
22. (1) 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 made by the Adjudicating Authority under sub-section (3)
of section 26:
15 of 2003.
43 of 1961.
61 of 1985.
42 of 1956.
2 of 1934.
40 of 1999.
15 of 1992.
Certain
officers to
assist in
inquiry, etc.
Power to call
for
information.
Power of
authority to
impound
documents.
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Provided that the period for retention of the books of account or other documents
may be extended beyond a period exceeding three months from the date of order of
attachment made by the Adjudicating Authority under sub-section (3) of section 26
where the authority records in writing the reasons for extending the same.
(2) Where the authority impounding and retaining the books of account or other
documents, under sub-section (1) is the Initiating Officer, he shall obtain approval of
the Approving Authority within a period of fifteen days from the date of initial
impounding and seek further approval of the Approving Authority for extending the
period of initial retention, before the expiry of the period of initial retention, if so
required.
(3) The period of retention of the books of account or other documents under
sub-section (1) shall in no case exceed a period of thirty days from the date of conclusion
of all the proceedings under this Act.
(4) The person, from whom the books of account or other documents were
impounded under sub-section (1), shall be entitled to obtain copies thereof.
(5) On the expiry of the period specified under sub-section (1), the books of
account or other documents shall be returned to the person from whom such books of
accounts or other documents were impounded unless the Approving Authority or the
Adjudicating Authority permits their release to any other person.
23. The Initiating Officer, after obtaining prior approval of the Approving
Authority, shall have power to conduct or cause to be conducted any inquiry or
investigation in respect of any person, place, property, assets, documents, books of
account or other documents, in respect of any other relevant matters under this Act.
CHAPTER IV
ATTACHMENT, ADJUDICATION AND CONFISCATION
24. (1) Where the Initiating Officer, on the basis of material 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 why the property should not be treated as
benami property.
(2) Where a notice under sub-section (1) specifies any property as being held
by a benamidar referred to in that sub-section, a copy of the notice shall also be
served upon the other person who is a beneficial owner.
(3) Where the Initiating Officer is of the opinion that the person in possession of
the property held benami may alienate the property during the period specified in the
notice, he may, with the previous approval of the Approving Authority, 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 under
sub-section (1).
(4) The Initiating Officer, after making such inquires and calling for such reports
or evidence as he deems fit and taking into account all relevant materials, shall, within
a period of ninety days from the date of issue of notice under sub-section (1),—
(a) where the provisional attachment has been made under
sub-section (3), —
(i) pass an order continuing the provisional attachment of the
property with the prior approval of the Approving Authority, till the passing
of the order by the Adjudicating Authority under sub-section (3) of
section 26; or
Power of
authority to
conduct
inquiry, etc.
Notice and
attachment
of property
involved in
benami
transaction.
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(ii) revoke the provisional attachment of the property with the prior
approval of the Approving Authority;
(b) where provisional attachment has not been made under
sub-section (3), —
(i) pass an order provisionally attaching the property with the prior
approval of the Approving Authority, till the passing of the order by the
Adjudicating Authority under sub-section (3) of section 26; or
(ii) decide not to attach the property as specified in the notice, with
the prior approval of the Approving Authority.
(5) Where the Initiating Officer passes an order continuing the provisional
attachment of the property under sub-clause (i) of clause (a) of sub-section (4) or
passes an order provisionally attaching the property under sub-clause (i) of clause (b)
of that sub-section, 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.
25. (1) A notice under sub-section (1) of section 24 may be served on the person
named therein either by post or as if it were a summons issued by a Court under the
Code of Civil Procedure, 1908.
(2) Any notice referred to in sub-section (1) may be addressed—
(i) in case of an individual, to such individual;
(ii) in the case of a firm, to the managing partner or the manager of the firm;
(iii) in the case of a Hindu undivided family, to Karta or any member of
such family;
(iv) in the case of a company, to the principal officer thereof;
(v) in the case of any other association or body of individuals, to the
principal officer or any member thereof;
(vi) in the case of any other person (not being an individual), to the person
who manages or controls his affairs.
26. (1) On receipt of a reference under sub-section (5) of section 24, the
Adjudicating Authority shall issue notice, to furnish such documents, particulars or
evidence as is considered necessary on a date to be specified therein, on the following
persons, namely:—
(a) the person specified as a benamidar therein;
(b) any person referred to as the beneficial owner therein or identified as
such;
(c) any interested party, including a banking company;
(d) any person who has made a claim in respect of the property:
Provided that the Adjudicating Authority shall issue notice within a period
of thirty days from the date on which a reference has been received:
Provided further that the notice shall provide a period of not less than
thirty days to the person to whom the notice is issued to furnish the information
sought.
(2) Where the property is held jointly by more than one person, the Adjudicating
Authority shall make all endeavours to serve notice to all persons holding the
property:
5 of 1908.
Adjudication
of benami
property.
Manner of
service of
native.
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Provided that where the notice is served on any one of the persons, the service
of notice shall not be invalid on the ground that the said notice was not served to all
the persons holding the property.
(3) The Adjudicating Authority shall, after—
(a) considering the reply, if any, to the notice issued under
sub-section (1);
(b) making or causing to be made such inquiries and calling for such
reports or evidence as it deems fit; and
(c) taking into account all relevant materials,
provide an opportunity of being heard to the person specified as a benamidar
therein, the Initiating Officer, and any other person who claims to be the owner
of the property, and, thereafter, pass an order—
(i) holding the property not to be a benami property and revoking
the attachment order; or
(ii) holding the property to be a Benami property and confirming
the attachment order, in all other cases.
(4) 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.
(5) Where in the course of proceedings before it, the Adjudicating Authority
has reason to believe that a property, other than a property referred to it by the
Initiating Officer is benami property, it shall provisionally attach the property and the
property shall be deemed to be a property referred to it on the date of receipt of the
reference under sub-section (5) of section 24.
(6) The Adjudicating Authority may, at any stage of the proceedings, either on
the application of any party, or suo moto, strike out the name of any party improperly
joined or add the name of any person whose presence before the Adjudicating Authority
may be necessary to enable him to adjudicate upon and settle all the questions involved
in the reference.
(7) No order under sub-section (3) shall be passed after the expiry of one year
from the end of the month in which the reference under sub-section (5) of section 24
was received.
27. (1) 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:
Provided that where an appeal has been filed against the order of the Adjudicating
Authority, the confiscation of property shall be made subject to the order passed by
the Appellate Tribunal under section 46:
Provided further that the confiscation of the property shall be made in accordance
with such procedure as may be prescribed.
(2) Nothing in sub-section (1) shall apply to a property held or acquired by a
person from the benamidar for adequate consideration, prior to the issue of notice
under sub-section (1) of section 24 without his having knowledge of the benami
transaction.
(3) Where an order of confiscation has been made under sub-section (1), all the
rights and title in such property shall vest absolutely in the Central Government free of
Confiscation
and vesting of
benami
property.
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all encumbrances and no compensation shall be payable in respect of such
confiscation.
(4) 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.
(5) Where no order of confiscation is made upon the proceedings under this Act
attaining finality, no claim shall lie against the Government.
28. (1) 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.
(2) 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.
(3) The Administrator shall also take such 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.
29. (1) Where an order of confiscation in respect of a property under
sub-section (1) of section 27, has been made, the Administrator shall proceed to take
the possession of the property.
(2) The Administrator shall,—
(a) by notice in writing, order within seven days of the date of the service
of notice to any person, who may be in possession of the benami property, to
surrender or deliver possession thereof to the Administrator or any other person
duly authorised in writing by him in this behalf;
(b) 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, for the
purpose of forcibly taking over possession, requisition the service of any police
officer to assist him and it shall be the duty of the officer to comply with the
requisition.
CHAPTER V
APPELLATE TRIBUNAL
30. The Central Government shall, by notification, establish an Appellate Tribunal
to hear appeals against the orders of the Adjudicating Authority under this Act.
31. (1) The Appellate Tribunal shall consist of a Chairperson and at least two
other Members of which one shall be a Judicial Member and other shall be an
Administrative Member.
(2) Subject to the provisions of this Act,—
(a) the jurisdiction of the Appellate Tribunal may be exercised by Benches
thereof;
(b) a Bench may be constituted by the Chairperson with two Members as
the Chairperson may deem fit;
(c) the Benches of the Appellate Tribunal shall ordinarily sit in the National
Capital Territory of Delhi and at such other places as the Central Government
may, in consultation with the Chairperson, by notification, specify;
(d) the Central Government shall, by notification, specify the areas in
relation to which each Bench of the Appellate Tribunal may exercise its
jurisdiction.
Management
of properties
confiscated.
Possession of
the property.
Establishment
of Appellate
Tribunal.
Composition
etc., of
Appellate
Tribunal.
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(3) Notwithstanding anything contained in sub-section (2), the Chairperson
may transfer a Member from one Bench to another Bench.
32. (1) A person shall not be qualified for appointment as Chairperson of the
Appellate Tribunal unless he is, or has been a Judge of a High Court.
(2) A person shall not be qualified for appointment as a Member unless he—
(a) in the case of a Judicial Member, has been a Member of the Indian
Legal Service and has held the post of Additional Secretary or equivalent post in
that Service;
(b) in the case of an Administrative Member, has been a Member of the
Indian Revenue Service and has held the post of Chief Commissioner of Incometax
or equivalent post in that Service.
(3) No sitting Judge of a High Court shall be appointed under this section except
after consultation with the Chief Justice of the High Court.
(4) The Chairperson or a Member holding a post as such in any other Tribunal,
established under any law for the time being in force, in addition to his being the
Chairperson or a Member of that Tribunal, may be appointed as the Chairperson or a
Member, as the case may be, of the Appellate Tribunal under this Act.
33. (1) The salary and allowances payable to, and the other terms and conditions
of service of the Chairperson and other Members shall be such as may be prescribed
and shall not be varied to their disadvantage during their tenure.
(2) Any vacancy caused to the office of the Chairperson or any other Member
shall be filled up within a period of three months from the date on which such vacancy
occurs.
34. The Chairperson and Members of the Appellate Tribunal shall hold office for
a term not exceeding five years from the date on which they enter upon their office, or
until they attain the age of sixty-five years, whichever is earlier and shall not be eligible
for re-appointment.
35. (1) The Central Government may, in consultation with the Chief Justice of
High Court, remove from office of the Chairperson or any Member, who—
(a) has been adjudged as an insolvent; or
(b) has been convicted of an offence which, in the opinion of the Central
Government involves moral turpitude; or
(c) has become physically or mentally incapable; or
(d) has acquired such financial or other interest as is likely to affect
prejudicially his functions; or
(e) has so abused his position as to render his continuance in office
prejudicial to the public interest.
(2) The Chairperson or Judicial Member shall not be removed from his office
except by an order made by the Central Government after an inquiry made by Chief
Justice of the High Court in which the Chairperson or Judicial Member has been
informed of the charges against him and given a reasonable opportunity of being
heard in respect of those charges.
(3) The Central Government may suspend from office the Chairperson or Judicial
Member in respect of whom a reference of conducting an inquiry has been made to the
Chief Justice of the High Court under sub-section (2), until the Central Government
passes an order on receipt of the report of inquiry made by Chief Justice of the High
Court on the reference.
Qualifications
for
appointment
of
Chairperson
and Members
of Appellate
Tribunal.
Terms and
conditions of
services of
Chairperson
and Members
of Appellate
Tribunal.
Term of
office of
Chairperson
and Members.
Removal of
Chairperson
and Member
from office in
certain
circumstances.
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(4) The Central Government may regulate the procedure for inquiry referred to in
sub-section (2) in the manner as may be prescribed.
(5) The Administrative Member may be removed from his office by an order of
the Central Government on the grounds specified in sub-section (1) and in accordance
with the procedure notified by the Central Government:
Provided that the Administrative Member shall not be removed unless he has
been given an opportunity of being heard in the matter.
36. No act or proceeding of the Appellate Tribunal shall be invalid merely by
reason of—
(a) any vacancy in, or any defect in the constitution of the Tribunal; or
(b) any defect in the appointment of a person acting as a Member of the
Tribunal; or
(c) any irregularity in the procedure of the Tribunal not affecting the merits
of the case.
37. (1) The Chairperson or any other Member may, by notice in writing under his
hand addressed to the Central Government, resign his office:
Provided that the Chairperson or any other Member shall, unless he is permitted
by the Central Government to relinquish his office sooner, continue to hold office until
the expiry of three months from the date of receipt of the notice or until a person duly
appointed as his successor enters upon his office or until the expiry of his term of
office, whichever is earlier.
38. (1) In the event of the occurrence of any vacancy in the office of the
Chairperson of the Appellate Tribunal by reason of his death, resignation or otherwise,
the senior-most Member shall act as the Chairperson until the date on which a new
Chairperson, appointed in accordance with the provisions of this Act to fill such
vacancy, enters upon his office.
(2) When the Chairperson is unable to discharge his functions owing to absence,
illness or any other cause, the senior-most Member shall discharge the functions of
the Chairperson until the date on which the Chairperson resumes his duties.
39. (1) The Central Government shall provide the Appellate Tribunal with such
officers and employees as it may thinks fit.
(2) The officers and employees of the Appellate Tribunal shall discharge their
functions under the general superintendence of the Chairperson.
(3) The salaries and allowances and other conditions of service of the officers
and employees of the Appellate Tribunal shall be such, as may be prescribed.
40. (1) The Appellate Tribunal shall not be bound by the procedure laid down by
the Code of Civil Procedure, 1908, but shall be guided by the principles of natural
justice and, subject to the other provisions of this Act, the Appellate Tribunal shall
have powers to regulate its own procedure.
(2) The Appellate Tribunal shall, for the purposes of discharging its functions
under this Act, have the same powers as are vested in a civil court under the Code of
Civil Procedure, 1908 while trying a suit, in respect of the following matters, namely:—
(a) summoning and enforcing the attendance of any person and examining
him on oath;
(b) requiring the discovery and production of documents;
(c) receiving evidence on affidavits;
Vacancies,
etc., not to
invalidate
proceedings
of Appellate
Tribunal.
Resignation
and removal.
Member to
act as
Chairperson
in certain
circumstances.
Staff of
Appellate
Tribunal.
Procedure and
powers of
Appellate
Tribunal.
5 of 1908.
5 of 1908.
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(d) subject to the provisions of sections 123 and 124 of the Indian Evidence
Act, 1872, requisitioning any public record or document or copy of such record
or document from any office;
(e) issuing commissions for the examination of witnesses or documents;
(f) reviewing its decisions;
(g) dismissing a representation for default or deciding it ex parte;
(h) setting aside any order of dismissal of any representation for default or
any order passed by it ex parte; and
(i) any other matter, which may be, prescribed by the Central Government.
(3) An order made by the Appellate Tribunal under this Act shall be executable
by it as a decree of civil court and, for this purpose, the Appellate Tribunal shall have
all the powers of a civil court.
(4) Notwithstanding anything contained in sub-section (3), the Appellate
Tribunal may transmit any order made by it to a civil court having jurisdiction and the
civil court shall execute the order as if it were a decree made by that court.
(5) All proceedings before the Appellate Tribunal shall be deemed to be judicial
proceedings within the meaning of sections 193 and 228 of the Indian Penal Code and
the Appellate Tribunal shall be deemed to be a civil court for the purposes of sections
345 and 346 of the Code of Criminal Procedure, 1973.
41. Where any Benches are constituted, the Chairperson may, from time to time,
by notification, make provision as to the distribution of the business of the Appellate
Tribunal amongst the Benches and also provide for the matters which may be dealt
with by each Bench.
42. On the application of any of the parties and notice to the parties, and after
hearing them, or on his own motion without any notice, the Chairperson of the Appellate
Tribunal may transfer any case pending before one Bench, for disposal, to any other
Bench.
43. If the Members of a Bench consisting of two Members differ in opinion on
any point, they shall state the point or points on which they differ, and make a reference
to the Chairperson of the Appellate Tribunal who shall either hear the point or points
himself or refer the case for hearing on the point or points by one or more of the other
Members and the point or points shall be decided according to the opinion of the
majority of the Members of the Appellate Tribunal who have heard the case, including
those who first heard it.
44. The Chairperson, Members and other officers and employees of the Appellate
Tribunal, the Adjudicating Authority, Approving Authority, Initiating Officer,
Administrator and the officers subordinate to all of them shall be deemed to be public
servants within the meaning of section 21 of the Indian Penal Code.
45. No civil court shall have jurisdiction to entertain any suit or proceeding in
respect of any matter which any of the authorities, an Adjudicating Authority or the
Appellate Tribunal is empowered by or under this Act to determine, and no injunction
shall be granted by any court or other forum in respect of any action taken or to be
taken in pursuance of any power conferred by or under this Act.
46. (1) Any person, including the Initiating Officer, aggrieved by an order of the
Adjudicating Authority may prefer an appeal in such form and along with such fees, as
may be prescribed, to the Appellate Tribunal against the order passed by the
Adjudicating Authority under sub-section (3) of section 26, within a period of fortyfive
days from the date of the order.
1 of 1872.
45 of 1860.
Distribution
of business
amongst
Benches of
Appellate
Tribunal.
Power of
Chairperson
of Appellate
Tribunal to
transfer
cases.
Decision to
be by
majority.
45 of 1860.
Members,
etc., to be
public
servants.
Bar of
jurisdiction of
civil courts.
Appeals to
Appellate
Tribunal.
2 of 1974.
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(2) The Appellate Tribunal may entertain any appeal after the said period of
forty-five days, if it is satisfied that the appellant was prevented, by sufficient cause,
from filing the appeal in time.
(3) On receipt of an appeal under sub-section (1), the Appellate Tribunal may,
after giving the parties to the appeal an opportunity of being heard, pass such orders
thereon as it thinks fit.
(4) An Appellate Tribunal while deciding the appeal shall have the power—
(a) to determine a case finally, where the evidence on record is sufficient;
(b) to take additional evidence or to require any evidence to be taken by
the Adjudicating Authority, where the Adjudicating Authority has refused to
admit evidence, which ought to have been admitted;
(c) to require any document to be produced or any witness to be examined
for the purposes of proceeding before it;
(d) to frame issues which appear to the Appellate Tribunal essential for
adjudication of the case and refer them to the Adjudicating Authority for
determination;
(e) to pass final order and affirm, vary or reverse an order of adjudication
passed by the Adjudicating Authority and pass such other order or orders as
may be necessary to meet the ends of justice.
(5) 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.
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
under section 26 and section 46 respectively, 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 prejudicially, unless he has been given notice of intention to
do so and has been given an opportunity of being heard.
48. (1) A person preferring an appeal to the Appellate Tribunal under this Act
may either appear in person or take the assistance of an authorised representative of
his choice to present his case before the Appellate Tribunal.
(2) The Central Government may authorise one or more of its officers to act as
presenting officers on its behalf, and every person so authorised may present the case
with respect to any appeal before the Appellate Tribunal.
Explanation.—For the purposes of this section, “authorised representative”
means a person authorised by the appellant in writing to appear on his behalf, being—
(i) a person related to the appellant in any manner, or a person regularly
employed by the appellant; or
(ii) any officer of a scheduled bank with which the appellant maintains an
account or has other regular dealings; or
(iii) any legal practitioner who is entitled to practice in any civil court in
India; or
(iv) any person who has passed any accountancy examination recognised
in this behalf by the Board; or
(v) any person who has acquired such educational qualifications as the
Board may prescribe for this purpose.
Rectification
of mistakes.
Right to
representation.
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49. (1) 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 on any question
of law arising out of such order.
(2) The High Court may entertain any appeal after the said period of sixty days,
if it is satisfied that the appellant was prevented by sufficient cause from filing the
appeal within the period specified in sub-section (1).
(3) Where the High Court is satisfied that a substantial question of law is involved
in any case, it shall formulate that question.
(4) The appeal shall be heard only on the question so formulated, and the
respondents shall, at the hearing of the appeal, be allowed to argue that the case does
not involve such question.
(5) Nothing in this sub-section shall be deemed to take away or abridge the
power of the court to hear, for reasons to be recorded, the appeal on any other substantial
question of law not formulated by it, if it is satisfied that the case involves such
question.
(6) The High Court shall decide the question of law so formulated and deliver the
judgment thereon containing the grounds on which any decision is founded and may
award any cost as it deems fit.
(7) The High Court may determine any issue which—
(a) has not been determined by the Appellate Tribunal; or
(b) has been wrongly determined by the Appellate Tribunal, by reason of
a decision on such question of law as is referred to in sub-section (1).
(8) Save as otherwise provided in this Act, the provisions of the Code of Civil
Procedure, 1908, relating to appeals to the High Court shall, as far as may be, apply in
the case of appeals under this section.
CHAPTER VI
SPECIAL COURTS
50. (1) The Central Government, in consultation with the Chief Justice of the
High Court, shall, for trial of an offence punishable under this Act, by notification,
designate one or more Courts of Session as Special Court or Special Courts for such
area or areas or for such case or class or group of cases as may be specified in the
notification.
(2) While trying an offence under this Act, a Special Court shall also try an
offence other than an offence referred to in sub-section (1), with which the accused
may, under the Code of Criminal Procedure, 1973, be charged at the same trial.
(3) The Special Court shall not take cognizance of any offence punishable under
this Act except upon a complaint in writing made by—
(i) the authority; or
(ii) any officer of the Central Government or State Government authorised
in writing by that Government by a general or special order made in this behalf.
(4) Every trial under this section shall be conducted as expeditiously as possible
and every endeavour shall be made by the Special Court to conclude the trial within six
months from the date of filing of the complaint.
Appeal to
High Court.
Special
Courts.
2 of 1974.
5 of
1908.
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51. (1) Save as otherwise provided in this Act, the provisions of the Code of
Criminal Procedure, 1973, shall apply to the proceedings before a Special Court and the
persons conducting the prosecution before the Special Court, shall be deemed to be
Public Prosecutors:
Provided that the Central Government may also appoint for any case or class or
group of cases, a Special Public Prosecutor.
(2) A person shall not be qualified to be appointed as a Public Prosecutor or a
Special Public Prosecutor under this section unless, the Public Prosecutor has been in
practice as an advocate for not less than seven years, and the Special Public Prosecutor
has been in practice as an advocate for not less than ten years in any court.
(3) Every person appointed as a Public Prosecutor or a Special Public Prosecutor
under this section shall be deemed to be a Public Prosecutor within the meaning of
clause (u) of section 2 of the Code of Criminal Procedure, 1973 and the provisions of
that Code shall have effect accordingly.
52. The High Court may exercise, so far as may be applicable, all the powers
conferred by Chapter XXIX or Chapter XXX of the Code of Criminal Procedure, 1973,
on a High Court, as if a Special Court within the local limits of the jurisdiction of the
High Court were a Court of Session trying cases within the local limits of the jurisdiction
of the High Court.
CHAPTER VII
OFFENCES AND PROSECUTION
53. (1) 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.
(2)Whoever is found guilty of the offence of benami transaction referred to in
sub-section (1) 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.
54. 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 .
55. No prosecution shall be instituted against any person in respect of any
offence under sections 3, 53 or section 54 without the previous sanction of the Board.’.
10. For sections 7 and 8 of the principal Act, the following shall be substituted,
namely:—
‘CHAPTER VIII
MISCELLANEOUS
56. (1) Sections 81, 82 and 94 of the Indian Trusts Act, 1882, section 66 of the
Code of Civil Procedure, 1908 and section 281A of the Income-tax Act, 1961, are hereby
repealed.
(2) For the removal of doubts, it is hereby declared that nothing in sub-section
(1) shall affect the continued operation of section 281A of the Income-tax Act, 1961 in
the State of Jammu and Kashmir.
Application
of Code of
Criminal
Procedure,
1973 to
proceedings
before Special
Court.
Penalty for
Benami
transaction.
Penalty for
false
information.
Previous
sanction.
Repeal of
provisions of
certain Acts.
5 of 1908.
2 of 1882.
43 of
1961.
43 of 1961.
2 of 1974.
Appeal and
revision.
Substitution
of new
Chapter VIII
sections 7
and 8.
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57. Notwithstanding anything contained in the Transfer of the Property
Act, 1882 or any other law for the time being in force, where, after the issue of a notice
under section 24, any property referred to in the said notice is transferred by any mode
whatsoever, the transfer shall, for the purposes of the proceedings under this Act, be
ignored and if the property is subsequently confiscated by the Central Government
under section 27, then, the transfer of the property shall be deemed to be null and void.
58. (1)The Central Government may, by notification, exempt any property relating
to charitable or religious trusts from the operation of this Act .
(2) Every notification issued under sub-section (1) shall be laid before each
House of Parliament.
59. (1) The Central Government may, from time to time, issue such orders,
instructions or directions to the authorities or require any person to furnish information
as it may deem fit for the proper administration of this Act and such authorities and all
other persons employed in execution of this Act shall observe and follow the orders,
instructions and directions of the Central Government.
(2) In issuing the directions or orders referred to in sub-section (1), the Central
Government may have regard to any one or more of the following criteria, namely:—
(a) territorial area;
(b) classes of persons;
(c) classes of cases; and
(d) any other criterion that may be specified by the Central Government in
this behalf.
(3) No orders, instructions or directions under sub-section (1) shall be issued so
as to—
(a) require any authority to decide a particular case in a particular manner;
or
(b) interfere with the discretion of the Adjudicating Authority in the
discharge of its functions.
60. The provisions of this Act shall be in addition to, and not, save as hereinafter
expressly provided, in derogation of any other law for the time being in force.
61. Notwithstanding anything contained in the Code of Criminal Procedure,
1973, an offence under this Act shall be non-cognizable.
62. (1) Where a person committing contravention of any of the provisions of this
Act or of any rule, direction or order made thereunder is a company, every person who,
at the time the contravention was committed, was in charge of, and was responsible to,
the company, for the conduct of the business of the company as well as the company,
shall be deemed to be guilty of the contravention and shall be liable to be proceeded
against and punished accordingly.
(2) Nothing contained in sub-section (1), shall render any person liable to
punishment if he proves that the contravention took place without his knowledge.
(3) Notwithstanding anything contained in sub-section (1), where a contravention
of any of the provisions of this Act or of any rule, direction or order made thereunder
has been committed by a company and it is proved that the contravention has taken
place with the consent or connivance of, or is attributable to any neglect on the part of
any director, manager, secretary or other officer of the company, the director, manager,
Certain
transfers to
be null and
void.
Exemption.
Power of
Central
Government
to issue
directions,
etc.
Application of
other laws not
barred.
Offences to
be noncognizable.
Offences by
companies.
2 of 1974.
4 of 1882.
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secretary or other officer shal1 also be deemed to be guilty of the contravention and
shall be liable to be proceeded against and punished accordingly.
Explanation.—For the purposes of this section,—
(a) “company” means a body corporate, and includes—
(i) a firm; and
(ii) an association of persons or a body of individuals whether
incorporated or not; and
(b) “director”, in relation to—
(i) a firm, means a partner in the firm;
(ii) any association of persons or a body of individuals, means any
member controlling the affairs thereof.
63. No notice, summons, order, document or other proceeding, furnished or
made or issued or taken or purported to have been furnished or made or issued or
taken in pursuance of any of the provisions of this Act shall be invalid, or shall be
deemed to be invalid merely by reason of any mistake, defect or omission in the notice,
summons, order, document or other proceeding if the notice, summons, order, document
or other proceeding is in substance and effect in conformity with or according to the
intent and purpose of this Act.
64. No prosecution, suit or other proceeding shall lie against the Government or
any officer of the Government or the Appellate Tribunal or the Adjudicating Authority
established under this Act, for anything done or intended to be done in good faith
under this Act.
65. (1) Every suit or proceeding in respect of a benami transaction pending in
any Court (other than a High Court) or Tribunal or before any forum on the date of the
commencement of this Act shall stand transferred to the Adjudicating Authority or the
Appellate Tribunal, as the case may be, having jurisdiction in the matter.
(2) Where any suit, or other proceeding stands transferred to the Adjudicating
Authority or the Appellate Tribunal under sub-section (1),—
(a) the court, Tribunal or other forum shall, as soon as may be, after the
transfer, forward the records of the suit, or other proceeding to the Adjudicating
Authority or the Appellate Tribunal, as the case may be;
(b) the Adjudicating Authority may, on receipt of the records, proceed to
deal with the suit, or other proceeding, so far as may be, in the same manner as
in the case of a reference made under sub-section (5) of section 24, from the
stage which was reached before the transfer or from any earlier stage or de novo
as the Adjudicating Authority may deem fit.
66. (1)Where a person dies during the course of any proceeding under this Act,
any proceeding taken against the deceased before his death shall be deemed to have
been taken against the legal representative and may be continued against the legal
representative from the stage at which it stood on the date of the death of the deceased.
(2) Any proceeding which could have been taken against the deceased if he had
survived may be taken against the legal representative and all the provisions of this
Act, except sub-section (2) of section 3 and the provisions of Chapter VII, shall apply
accordingly.
(3) Where any property of a person has been held Benami under sub-section (3)
of section 26, then, it shall be lawful for the legal representative of the person to prefer
an appeal to the Appellate Tribunal, in place of the person and the provisions of
section 46 shall, so far as may be, apply, or continue to apply, to the appeal.
Notice, etc.,
not to be
invalid on
certain
grounds.
Protection of
action taken in
good faith.
Transfer of
pending cases.
Proceedings
etc., against
legal
representative.
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67. The provisions of this Act shall have effect, notwithstanding anything
inconsistent therewith contained in any other law for the time being in force.
68. (1) The Central Government may, by notification, make rules for carrying out
the provisions of this Act.
(2) In particular, and without prejudice to the generality of the foregoing power,
such rules may provide for all or any of the following matters, namely—
(a) manner of ascertaining the fair market value under clause 16 of
section 2;
(b) the manner of appointing the Chairperson and the Member of the
Adjudicating Authorities under sub-section (2) of section 9;
(c) the salaries and allowances payable to the Chairperson and the Members
of the Adjudicating Authority under sub-section (1) of section 13;
(d) the powers and functions of the authorities under sub-section (2) of
section 18;
(e) other powers of the authorities under clause (f) of sub-section (1) of
section 19;
(f) the form and manner of furnishing any information to the authority
under sub-section (2) of section 21;
(g) the manner of provisional attachment of property under sub-section
(3) of section 24;
(h) the procedure for confiscation of benami property under the second
proviso to sub-section (1) of section 27;
(i) the manner and conditions to receive and manage the property under
sub-section (1) of section 28;
(j) the manner and conditions of disposal of property vested in the Central
Government under sub-section (3) of section 28;
(k) the salaries and allowances payable to and the other terms and
conditions of service of the Chairperson and other Members of the Appellate
Tribunal under sub-section (1) of section 33;
(l) the manner of prescribing procedure for removal of Chairperson or
Member under sub-section (4) of section 35;
(m) the salaries and allowances payable to and the other terms and
conditions of service of the officers and employees of the Appellate Tribunal
under sub-section (3) of section 39;
(n) any power of the Appellate Tribunal under clause (i) of sub-section (2)
of section 40;
(o) the form in which appeal shall be filed and the fee for filing the appeal
under sub-section (1) of section 46;
(p) any other matter which is to be, or may be, prescribed, or in respect of
which provision is to be made, by rules.
69. Every rule made and notification issued under this Act shall be laid, as soon
as may be after it is made or issued, before each House of Parliament, while it is in
session, for a total period of thirty days which may be comprised in one session or in
two or more successive sessions, and if, before the expiry of the session immediately
following the session or the successive sessions aforesaid, both Houses agree in
making any modification in the rules or notifications, as the case may be, both Houses
Act to have
overriding
effect.
Power to
make rules.
Laying of
rules and
notifications
before
Parliament.
5
10
15
20
25
30
35
40
45
22
agree that the rules or notifications, as the case may be, should not be made or issued,
the rule or notification, as the case may be, shall thereafter have effect only in such
modified form or be of no effect, as the case may be; so, however, that any such
modification or annulment shall be without prejudice to the validity of anything
previously done under that rule or notification, as the case may be.
70. (1) If any difficulty arises in giving effect to the provisions of this Act, the
Central Government may, by order, published in the Official Gazette, make such
provisions not inconsistent with the provisions of this Act as may appear to be
necessary for removing the difficulty.
(2) No order shall be made under this section after the expiry of two years from
the commencement of this Act.
(3) Every order made under this section shall be laid, as soon as may be after it
is made, before each House of Parliament.
71. The Central Government may, by notification, provide that until the
Adjudicating Authorities are appointed and the Appellate Tribunal is established
under this Act, the Adjudicating Authority appointed under sub-section (1) of section
6 of the Money-Laundering Act, 2002 and the Appellate Tribunal established under
section 25 of that Act may discharge the functions of the Adjudicating Authority and
Appellate Tribunal, respectively, under this Act.’.
11. Section 9 of the principal Act shall be renumbered as section 72 thereof.
Power to
remove
difficulties.
Transitional
provision.
Amendment
of section 9.
15 of 2003.
5
10
15
20
STATEMENT OF OBJECTS AND REASONS
The Benami Transactions (Prohibition) Act, 1988 was enacted to prohibit benami
transactions and the right to recover property held benami. The said Act, inter alia, provides
that—(a) all the properties held benami shall be subject to acquisition by such authority in
such manner and after following such procedure as may be prescribed; (b) no amount shall
be payable for the the acquisition of any property held benami; (c) the purchase of property
by any person in the name of his wife or unmarried daughter for their benefit would not be
benami transaction; (d) the securities held by a despository as registered owner under the
provisions of the Depositories Act, 1996 or participant as an agent of a depository would not
be benami transactions.
2. During the administration of the Benami Transactions (Prohibition) Act, 1988, it was
found that the provisions of the aforesaid Act are inadequate to deal with benami transactions
as the Act does not—(i) contain any specific provision for vesting of confiscated property
with Central Government; (ii) have any provision for an appellate mechanism against an
action taken by the authorities under the Act, while barring the jurisdiction of a civil court;
(iii) confer the powers of the civil court upon the authorities for its implementation; and (iv)
provide for adequate enabling rule making powers.
3. In view of the circumstances stated above, comprehensive amendments to the
Benami Transactions (Prohibition) Act, 1988 has become necessary in order to prohibit
holding property in benami and restrict right to recover or transfer property held benami
and also to provide a mechanism and procedure for confiscation of property held benami . It
is, therefore, felt necessary to bring comprehensive amendments to the Benami Transactions
(Prohibition) Act, 1988 to deal with benami transactions. The Benami Transactions
(Prohibition) Amendment Bill, 2015, inter-alia, provides for the following namely:—
(1) It defines a benami transaction and benami property and also provides for
exclusions and transactions which shall not be construed benami:—
(a) A benami transaction has been defined as—
(i) a transaction or an arrangement where a property is transferred to or
held by a person and the consideration for such property has been provided or
paid by another person and the prperty is held for the immediate or future
benefit, direct or indirect, of the person providing the consideration;
(ii) a transaction or an arrangement in respect of a property carried out or
made in a fictitious name;
(iii) a transaction or an arrangement where the owner of the property is
not aware of or denies knowledge of such ownership;
(iv) a transaction or an arrangement where the person providing the
consideration is not traceable or fictitious.
(b) benami property is defined as any property which is the subject matter a
benami transation.
(c) Properties excluded from the definition of benami transaction are:—
(i) Properties acquired out of the known sources of income of the Hindu
individed family which are held by a coparecener in a Hindu undivided family;
(ii) Properties held by a person in fiduciary capacity;
23
24
(iii) Properties acquired out of the known sources of income by an
individual in the name of spouse or in the name of any child of such individual;
(iv) Properties acquired out of the known sources of income in joint
ownership with the brother or sister or any lineal ascendant or descendant.
The above transactions shall not be treated as benami transactions and accordingly
shall not be subjected to any penal consequences.
(2) It provides the consequences of entering into a prohibited benami transactions
which are:—
(a) 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 owners, benamidar and any other person who abets or induces
any person to enter into such 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 a fine.
(b) A benami property shall also be liable for confiscation by the Adjudicating
Authority.
(3) It lays down the procedure for determination and related penal consequences in the
case of a prohibited benami transaction to be as under:—
(a) Proceedings for inquiring into an alleged benami transaction are to be intiated
by the Initiating Officer;
(b) The Initiating Officer will refer the case to the Adjudicating Authority set up
under the proposed Bill;
(c) The Adjudicating Authority, after providing an opportunity of being heard to
the alleged benamidar, the beneficial owner, any interested party including a banking
company and any other person who makes a claim in respect of the property, shall pass
an order within one year, holding the property to be a benami property or otherwise;
(d) An appeal against the order of Adjudicating Authority shall lie with the
Appellate Tribunal set up under the Bill;
(e) An appeal against the orders of the Appellate Tribunal shall lie with the
jurisdictional High Court;
(f) After the order of Adjudicating Authority becomes final, it shall confiscate the
properties held benami;
(g) Confiscated properties are to be managed and disposed of by officers of the
rank of Income-tax Officer who shall be designated by the Central Government as
Administrators.
(4) It also provides that—
(a) the powers of civil court shall be available to authorities under the said Act;
(b) miscellaneous provisions have been provided for service of notice, protection
of action taken in good faith, etc.;
(c) the Central Government has been empowered to make rules for the
implementation of the provisions of the Bill;
(d) it enables the Central Government, in consultation with the Chief Justice of
the High Court, to desginate one or more Courts of Session as Special Court or Special
Courts for the purpose of the Bill;
(e) it provides penalty for entering into benami transactions and for furnishing
any false documents in any proceeding under the Bill;
25
(f) it provides for transfer of any suit or proceeding in respect of a benami
transaction pending in any court (other than High Court) or Tribunal or before any
authority to the Appellate Tribunal as provided in the Bill.
4. The Bill seeks to achieve the above objectives.
NEW DELHI; ARUN JAITLEY.
The 12th May, 2015.
FINANCIAL MEMORANDUM
This Bill seeks to amend the law prohibiting benami transactions, holding property in
benami and restricting right to recover or transfer property held benami, and providing
mechanism and procedure for confiscation of property held benami. The Benami Transaction
(Prohibition) Amendment Bill, 2015 proposes implementation of the said Act by the existing
institutional structure of the Income Tax Department.
2. Clause 9 of the Bill empowers the Central Government to appoint one or more
persons not below the rank of Commssioner of Income-tax and Joint Secretary to the
Government of India as Adjudicating or Adjudicating Authorities. The said clause 9 in the
proposed section 30 empowers the Central Government to establish an Appellate Tribunal to
hear appeals against the orders of the Adjudicating Authority. Clause 9 empowers the Central
Government to provide the Appellate Tribunal with such officers and employees as the
Central Government may deem fit.
3. Initials, it is proposed to constitute three Benches of the Appellate Tribunals at
Delhi, Mumbai and Chennai. It is also proposed to appoint for each Bench of the Appellate
Tribunal one officer of the rank of Joint Secretary to the Government of India, two Directors
and four Assistant Directors with necessary staff and employees to assist such Bench. It is
also proposed to appoint four Adjudicating Authorities each in Delhi, Kolkata, Chennai and
Mumbai with necessary officers, staff and employees to assist them in discharge of their
duties.
The recurring expenditure for the aforesaid appointment in respect of salaries,
alloowances and office expenses, etc., is estimated to be Rs. 40 crores per annum. The nonrecurring
expenditure in respect of office equipment, office furniture, electrical installation
and motor vehicles, etc., is estimated to be Rs. 50 crores. The Bill does not involve any other
recurring or non-recurring expenditure.
26
MEMORANDUM REGARDING DELEGATED LEGISLATION
Clause 4 of the Bill proposes to substitute section 2. Clause (16) of the proposed
section 2 seeks to define “fair market value”, in relation to a property to mean the price that
the property would ordinarily fetch on sale in the open market on the date of the transaction;
and where the price is not ascertainable, such price as may be determined in accordance with
the rules made under the proposed provision.
Clause 9 of the Bill proposes to insert Chapter III to VII in the Act. The Proposed
section 9 seeks to provide for qualifications for appointment of Chairperson and Members of
the proposed section 9 that the Chairperson and other Members of the Adjudicating Authority
shall be appointed by the Central Government in accordance with the rules made in this
regard.
Sub-section (1) of the proposed section 13 seeks to provide that the salary and
allowances payable to, and the other terms and condtions of service of the Chairperson and
other Members of the Adjudicating Authority shall be such as per the rules made in this
regard by the Central Government.
The proposed section 18 seeks to provide for authorities and their jurisdiction under
the Act. The proposed sub-section (2) provides that the authorities shall exercise all or any
of the powers and perform all or any of the functions conferred on, or, assigned, as the case
may be, to it under this Act or in accordance with such rules as may be made by the Central
Government in this regard.
Clause (f) of sub-section (1) of the proposed section 19 seeks to provide that the
authorities shall, for the purposes of this Bill, have the same powers as are vested in a civil
court under the Code of Civil Procedure, 1908 while trying a suit in respect of any other
matter which may be prescribed. Accordingly, it is proposed to empower the Central
Government to make rules in this regard.
Sub-section (2) of the proposed section 21 seeks to provide that the officer of the
Central Government or State Government or a local body or any person or officer who is
responsible for registering and maintaining books of account or other documents containing
a record of any transaction relating to any property or any other person shall furnish such
information and in such form and manner as may be prescribed to any authority under this
Bill. Accordingly, it is proposed to empower the Central Government to make rules in this
regard for the pruposes of this provision.
Sub-section (3) of the proposed section 24 seeks to provide that where the Initiating
Officer is of the opinion that the person in possession of the property held benami may
alienate such peroperty, he may, with the previous approval of the Approving Authority, by
order in writing, attach provisionally such property in the manner as may be prescribed, for
a period not exceeding ninety days form the date of issue of a show cause notice.
Sub-section (1) of the proposed section 27 seeks to provide that 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. Second proviso to sub-section (1) of the proposed section 27 seeks to
provide that the confiscation of the property shall be made in accordance with such procedure
as may be prescribed.
Sub-section (1) of the proposed section 28 seeks to provide that 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 the proposed 27 has been made, in such manner and
27
28
subject to such conditions, as may be prescribed. Sub-section (3) of the proposed section 28
seeks to provide that the Administrator shall also take such measures, as the Central
Government may direct, to dispose of the property which is vested in the Central Government
under sub-section (3) of the proposed section 27, in such manner and subject to such
conditions as may be prescribed.
The proposed section 33 seeks to provide that the salary and allowances payable to
and the other terms and conditions of service of the Chairperson and other Members of the
Appellate Tribunal shall be such, as may be prescribed.
The proposed section 35 seeks to provide for removal of Chairperson and Member of
the Appellate Tribunal in certain circumstances. Sub-section (2) of the said section seeks to
provide that the Chairperson or Judicial member shall not be removed from office except by
an order made by the Central Government after an inquiry made by Chief Justice of the High
Court. Sub-section (4) of the said section seeks to provide that the Central Government may
regulate the procedure for inquiry referred to in sub-section (2) in the manner as may be
prescribed.
Sub-section (3) of the proposed section 39 seeks to provide that the salaries and
allowances and other conditions of service of the officers and employees of the Appellate
Tribunal shall be such as may be prescribed.
Clause (i) of sub-section (2) of the proposed section 40 seeks to provide that the
Appellate Tribunal shall have, for the purposes of discharging its functions under this Act,
the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 while
trying a suit, in respect of any other matter than those listed in items (a) to (h) of the said subsection
(2).
Sub-section (1) of the proposed section 46 seeks to provide that any person, including
the Initiating Officer, aggrieved by an order of the Adjudicating Authority may prefer an
appeal in such form along with such fees, as may be prescribed, to the Appellate Tribunal
against the order passed by the Adjudicating Authority.
2. The matters in respect of which rules may be made are generally matters of procedure
and administrative details and it is not practicable to provide for them in the Bill itself. The
delegation of legislative power is, therefore, of a normal character.
ANNEXURE
EXTRACTS FROM THE BENAMI TRANSACTIONS (PROHIBITION) ACT, 1988
(45 OF 1988)
* * * * *
1. (1) This Act may be called the benami Transactions (Prohibition) Act, 1988.
(2) It extends to the whole of India except the State of Jammu and Kashmir.
(3) The provisions of sections 3, 5 and 8 shall come into force at once, and the remaining
provisions of this Act shall be deemed to have come into force on the 19th day of May, 1988.
2. In this Act, unless the context otherwise requires,—
(a) “benami transaction” means any transaction in which property is transferred to
one person for a consideration paid or provided by another person;
(b) “prescribed” means prescribed by rules made under this Act;
(c) “property means property of any kind, whether movable or immovable, tangible or
intangible, and includes any right or interest in such property.
3. (1) No person shall enter into any benami transaction.
(2) Nothing in sub-section (1) shall apply to—
(a) the purchase of property by any person in the name of his wife or unmarried
daughter and it shall be presumed, unless the contrary is proved, that the said property had
been purchased for the benefit of the wife or the unmarried daughter;
(b) the securities held by a—
(i) depository as a registered owner under sub-section (1) of section 10 of the
Depositories Act, 1996;
(ii) participant as an agent of a depository.
Explanation.— The expressions “depository” and “participant” shall have the
meandings respectively assigned to them in clauses (e) and (g) of sub-section (1) of section
2 of the Depositories Act, 1996.
* * * * *
(4) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, an
offence under this section shall be non-congnizable and bailable.
4. (1)* * * * *
(3) Nothing in this section shall apply—
(a) where the person in whose name the property is held is a coparcener in a
Hindu undivided family and the property is held for the benefit of the coparceners in
the family; or
(b) where the person in whose name the property is held is a trustee or other
person standing in a fiduciary capacity, and the property is held for the benefit of
another person for whom he is a trustee or towards whom he stands in such capacity.
5. (1) All properties held benami shall be subject to acquisition by such authority, in
such manner and after following such procedure as may be prescribed.
Short title,
extent and
commencement.
Definitions.
Prohibition of
benami
transaction.
Prohibition of
right to
recover
property held
benami.
Property held
benami liable
to acquisition.
2 of 1974.
29
22 of 1996.
22 of 1996.
30
(2) For the removal of doubts, it is hereby declared that no amount shall be payable for
the acquisition of any property under sub-section (1).
6. Nothing in this Act shall affect the provisions of section 53 of the Transfer of
Property Act, 1882, or any law relating to transfer for an illegal purpose.
* * * * *
Act not to
apply in
certain cases.
4 of 1882.
LOK SABHA
————
A
BILL
further to amend the Benami Transactions (Prohibition) Act, 1988.
————
(Shri Arun Jaitley, Minister of Finance, Corporate Affairs and Information &
Broadcasting , M.P.)
GMGIPMRND—1074LS—12.05.2015.
LOK SABHA
——
CORRIGENDA
to
THE BENAMI TRANSACTIONS (PROHIBITION) AMENDMENT BILL, 2015
[To be/As introduced in Lok Sabha]
1. Page 6, line 10,-
for “Union territory Admionistrations,”
read “Union territory Administrations,”
2. Page 7, line 6,-
for “Department of Rural Development”
read “Departments of Rural Development”
3. Page 12, line 26,-
for “books of accounts”
read “books of account”
NEW DELHI;
May 7, 2015 ______
Vaisakha 17, 1937 (Saka)

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