It also includes any rights or interests or legal documents or instruments that demonstrate an interest in a property. If the property can be converted to another form, it is in that converted form. The proceeds of the property are also covered. Therefore, cash or bank balances generated by the sale of these assets are also covered. The government has taken various steps to effectively enforce the law. According to media reports, in January 2019, the income tax department seized assets worth 6,900 crore under this law. According to the government`s press information bureau website, more than 2,100 cases related to Benami properties worth over 9,600 crores have been issued as of May 31, 2019. The tax department has established 24 special Benami interdiction units throughout the country. These units are involved in collecting information and matching it with available data to identify Benami`s properties. In addition, a reward system for whistleblowers has been announced. It aims to encourage people to provide information about Benami transactions and receive rewards of up to 1 crore, among other things.
Article 3(2) requires three years in prison for those who made Benami transactions between September 5, 1988 and October 25, 2016. That is, a person can be sent behind bars for a Benami transaction made 28 years before the creation of the section. If your company would like to publish press releases or leadership articles, please contact content@legal500.com It is important to note that as departmental databases are linked, ownership records are digitized, information is compiled from a variety of sources, and there are discrepancies between artificial intelligence and data analytics, This strict law will see more action. in the coming days. With the government`s determination to bring transparency to the economy, the Benami Act will act as a deterrent and effective tool, and revenue collection will be a natural consequence. The Benami Transactions Act was enacted in 1988 and amended in 2016 when its scope was expanded. The definition of “Benami” has been broadened and penalties have been introduced for violations of the law. Penalties included confiscation of property and prison terms ranging from one to seven years, as well as a fine for certain crimes. A law is considered retroactive if its application also regulates incidents that occurred before it came into force. Traditionally, laws, especially those providing for sanctions for certain acts, cannot be enacted retroactively. The reason for the prohibition of retroactivity is that no one can be punished for an act that was not illegal at the time it was committed.
A person convicted of the Benami transaction can face a severe prison sentence of one to seven years. The fine is also imposed up to 25% of the market value of the property. In addition, anyone who submits false information or documents will be punished with severe imprisonment from six months to five years. In addition, a fine of up to 10% of the market value of the property will be charged. Under section 3(2) of the 1988 Act, participation in a Benami transaction would result in imprisonment for up to three years, a fine or both. In addition, the penalty for a Benami transaction is not only limited to imprisonment, but also extends to seizure of property under section 5 of the 1998 Act. This section did not provide sufficient safeguards not to provide a mechanism for the person to defend title to his property. In the absence of sufficient safeguards, the above-mentioned provisions were declared manifestly arbitrary and unconstitutional by the Supreme Court. A Benami transaction is an agreement in which ownership is transferred or held by one person, but consideration for the transfer is provided by another person, who then holds ownership for the present or future benefit of the person who made the payment.
[1] Benami transactions occur when ownership is acquired on behalf of a fictitious person or when a fictitious person provides consideration for the acquisition of the property. [2] In addition, a transaction is considered benami if the person named as the owner knows nothing about the property or denies it. [3] The law allows authorities to provisionally seize land. Seizure implies a prohibition on the transfer, conversion or disposal of assets. Once it is decided that a property is benami, it can be confiscated by the central government. At this point, it is imperative to note that the imperative right to life, summarized in Article 21, stipulates that “no one shall be deprived of his life or personal liberty, except in accordance with the procedure prescribed by law”[6]. This implies that convictions based on a law that has become unconstitutional would fall within the scope of “unlawful detention”. This interpretation can be understood by the recent Supreme Court decision in Bhola Kumhar v.
State of Chhattisgarh,[7] which states in paragraph 17 that “the detention of a convicted person beyond the effective date of his release would amount to imprisonment or detention without sanction of law and would therefore violate not only Article 19(d) but also Article 21 of the Constitution of India. In view of this ratio, convictions are quashed on the basis of Article 3 § 2 by appeal to the competent court of the competent High Court of Honour. The transaction relating to the seized property could be followed by obtaining a report from the administrator, the legal authority managing the Benami property[8], and the corresponding decision on its title would be decided on the basis of the facts and circumstances of the case. In addition, due to the 2016 amending law, the scope of the Benami property has been extended under Article 5 to include the proceeds of this property in its scope. [4] In it, the Supreme Court ruled that the actual confiscation caused by the 2016 amending law could only be applied prospectively. All these prosecutions and confiscation proceedings were therefore dropped. The Benami Transactions Prohibition Act 1988 (“Old Law”) was enacted to prohibit Benami transactions and recover assets held under the Benami name. The old Act contained nine sections; However, the rules, regulations and enforcement procedures could not be formulated, rendering it ineffective. In particular, there are no rules on the confiscation of property.