Tardy Govt. risks spoiling benami drive


New Delhi, June 4: The attachments of over 780 benami assets, worth crores, risk being invalidated because of the Government’s failure to create a designated adjudicating authority in the 19 months since enforcing a stringent law against black money and corruption.
The Centre had amended the Benami Property Transaction Act of 1988 and enforced the tighter version on November 1, 2016, days before Prime Minister Narendra Modi demonetised 1,000-rupee and 500-rupee notes.
Section 7 of this law prescribes 7 years’ jail and a fine up to 25% of the market value of a benami property – one held by a real or fictitious person on behalf of another who has actually paid for it.
But the law also requires the government to create an independent, 3-member adjudicating authority that is to decide the validity of any attachment of a property by the Income-Tax Department under this law.
In the absence of such an authority, the Government has entrusted these cases as a “transitional” arrangement to the already short-staffed and overburdened adjudicating authority for the Prevention of Money Laundering Act.
Official records show that while the Income-Tax Department has sent over 860 such cases to this authority, only about 80 have been adjudicated on, leaving about 780 cases pending. Many of these cases involve properties worth crores, associated with high-profile businessmen, politicians and bureaucrats.
Since the attachments of benami assets have to be confirmed within a year, there’s concern that these sensitive cases might get “time-barred” or invalidated.
The money-laundering adjudicating authority recently asked the Department of Revenue and the Central Board of Direct Taxes, which function under the Finance Ministry, not to send it benami cases and “hold” them instead with the Income-Tax Department till the new body is constituted.
It said that if a new body was not created and the vacancies in the existing one not filled immediately, “it will be impossible for it to dispose of benami cases in the prescribed time… considering the speed at which work is pouring (in) under the benami law”.
It further asked the Finance Ministry to provide it with at least 9 junior staff members like court masters “to take down dictations and write judicial orders”, and peons to serve tea and snacks to members and defence counsel in the courts.
A senior Finance Ministry official said: “If benami cases fail to be adjudicated within the prescribed time, it will lead to major litigation and embarrassment for the Government as the drive against benami assets has been the most talked about action of the Government under its flagship anti-black-money drive, about which Prime Minister has himself spoken at various forums and poll rallies.”
Records show that the money-laundering authority has been forced to work without a regular Chairperson since April 1, and has just 2 working members now.
The Revenue Department, records show, has yet not been able to fix a date to thresh these matters out.
“An early action in the matter will be highly appreciated,” the authority had told the Department last year, while suggesting that some staff be deputed with it temporarily from the Income-Tax Department. (PTI)