Over 780 benami asset attachments worth crores of rupees run the risk of being invalidated in the near future as the government has failed to create a designated adjudicating authority for over a year-and-a-half since the stringent law was enforced to deal with blackmoney and corruption.
The Benami Property Transaction Act, enacted in 1988, was revived and enforced by the current government from November 1, 2016, the month that also saw demonetisation of two big currencies of the country by a declaration made by Prime Minister Narendra Modi.
Section 7 of this law, thatattracts a rigorous imprisonment of up to seven years and fine up to 25 per cent of the fair market value of the property, requires the government to create an independent 3-member Adjudicating Authority (like the one for PMLA) that will decide on the validity of the attachment of properties made under this legislation by the Income Tax Department (ITD).
In the absence of such an authority for over 1.5 years now, the government has entrusted the task of handling these cases on an ad-hoc basis and as a "transitional" arrangement to the already short-staffed and over-burdened Adjudicating Authority for the Prevention of Money Laundering Act (PMLA), a stringent law enforced by the Enforcement Directorate.
Official records accessed by PTI show that while over 860 such cases have been finalised by the tax department and sent to this authority till now, only about 80 could be adjudicated, leaving a pendency of about 780 cases bearing attachments worth crores of rupees and involving some very high-profile individuals, politicians, bureaucrats and others.
Worried that these high-value sensitive cases may get "time-barred" or invalidated as benami attachment orders have to be confirmed within an year of issue by the ITD, the Authority has recently asked the Department of Revenue and the CBDT under the Finance Ministry to not send to it the cases and "hold" them with the IT Department, till the new body is constituted.
The Authority, as per official records, has put the government on notice stating if a new body is not created and existing vacancies of members and staff are not immediately posted to the existing setup, "it will be impossible for it to dispose of benami cases in the prescribed time limit...considering the speed at which work is pouring under the benami law."
The Revenue department, records show, has till now not been able to fix a date to thrash out these issues even after it was told by the Authority last year that "immediate steps may kindly be taken for notification/creation of the Adjudicating Authority for the benami law so that public interest does not suffer and the purpose for which the Act was created is effectively met and justice is done."