TaxTMI 
TaxTMI 
Standard Operating Procedure (SOP) with regard to implementation of Prohibition of Benami Property Transactions Act, 1988 (as amended by Benami Transactions (Prohibition) Amendment Act, 2016), following setting up of dedicated Benami Prohibition Units (BPUs) under each PDIT(Inv)
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....y Transactions Act, 1988 (the Act) [as amended by the Benami Transactions (Prohibition) Amendment Act, 2016] was circulated with the request to sensitise all concerned for due implementation of the new law. Further to the above, the following important issues in this regard are brought to your notice: 2. The Act is applicable since 1988: Section 1(3) of the Prohibition of Benami Property Transactions Act, 1988 reads as under: "The provisions of section 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." The provisions of sections 3, 5 and 8 of the Prohibition of Benami Property Transactions Act, 1988 came into force w.e.f. 05.09.1988 and the remaining provisions of the Act came into force on 19.05.1988. The amended provisions of the Act [as amended by Benami Transactions (Prohibition) Amendment Act, 2016] came into force w.e.f. 1st November 2016. 3. Change in the implementing authorities through setting-up of dedicated Benami Prohibition Unit (BPU) under each Pr.DIT(Inv): 3.1 Prohibition of Benami Property Transactions Rules 2016 were notified vide GSR ....
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....Investigation Directorates in terms of overseeing the drafting of complaints [for which a check-list may be prepared] and coordination between DDIT(Inv.)/ADIT(Inv.) investigating a particular case from which the prosecution has arisen, Prosecution Counsel(s) and the Court for filing the same; iii. Coordination between the Court and the Officers concerned with regard to hearing of prosecution cases, keeping track of dates & nature of hearing and keeping the Officers concerned and Prosecution Counsel(s) informed; iv. Facilitation of logistics, including arranging relevant case records in advance for reference of the Officers concerned & others as and when required, and briefings and their production before the Courts, if required, in coordination with Prosecution Counsel(s); v. Processing of matters relating to payment of the fees of Prosecution Counsels engaged by the Investigation Directorates; vi. Coordination between the Officers concerned and the Standing Counsel(s)/Other Counsels in all those cases where Writ Petitions have been filed against prosecution complaints of Investigation Directorates, including with regard to hearing of such cases,....
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....39;Benamidar' as defined under section 2(10). • 'Beneficial owner' as defined under section 2(12) • 'Property' as defined under section 2(26) • 'Transfer' as defined under section 2(29)' • 'Fair market value' as defined under section 2(16) • 'Person' as defined under section 2(24) iv. Benami property includes the proceeds from such property - As per section 2(8) of the Act, benami property includes proceeds from such property. v. Prohibition on re-transfer of property by benamidar - Section 6(1) of the Act prohibits re-transfer of the benami property to the beneficial owner or any other person acting on his behalf, and section 6(2) declares such re-transfers to be null and void. vi. Previous sanction of the CBDT for filing prosecution - Prosecution under the Act requires previous sanction of the CBDT (Section 55). 6. Important stages in implementation of the Act: i. The first stage is, prima facie, detection/identification of benami transaction/property and bringing it to the notice of the IO (ACIT/DCIT), if detection is by an authority other than the IO....
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.... Attachment of the benami property is required to be done through a speaking order. The order should include due analysis of evidence leading to the conclusion that the property is benami property/involved in benami transactions under the Act. The order should also include appropriately the information/details indicated in the proforma of statement/reference (Annexure-I) to be made to the Adjudicating Authority. iii. The following important aspects need to be kept in mind while making reference to the Adjudicating Authority u/s 24(5) of the Act: a. Proforma of the statement/reference need to be drawn up as per Annexure-I b. The statement/reference need to be filed in the office of Adjudicating Authority with Registrar/Administrative Officer within 15 days of passing the order under section 24(4)(a)(i) or under section 24(4)(b)(i). It must be noted that the Adjudicating Authority does not have power to condone delay in filing of the reference/statement. c. All relevant papers (refer Annexure-I) including correspondence in this regard need to be filed with the Registrar/Administrative Officer, along-with the reference/statement to the Adjudicating Author....
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.... Act. As per section 18(1) r.w.s. 2(6) of the Act, the Initiating Officer, Approving Authority, Administrator and Adjudicating Authority are empowered to file prosecution complaints under the Act. However, primary responsibility for processing prosecution complaint for benami transactions rests with the Initiating Officer. iii. Proforma for seeking previous sanction of the CBDT for filing prosecution complaint- In view of provisions of section 55 of the Act, proposals for prosecution under the Act is to be sent to the Under Secretary(Investigation-I), CBDT, Room No.269, North Block, New Delhi-110001 for obtaining previous sanction of the CBDT. Such proposal, in respect of each benami property/transaction separately may be submitted in the proforma given in Annexure-II to this SOP. The proforma is to be submitted by the IO under his signature to the DGIT(Inv) concerned through proper channel who, in turn, is to forward it to the CBDT after ensuring that the same is complete in all respects. 9. Giving information of benami transaction/property to the IO - Any complaint/information of benami transaction/property received by an Income-tax authority may generally include/imp....
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....erty Transactions Act. The Investigating Officers need to keep the following indicative aspects in their mind: a) Identification and examination of legal/apparent owner(s)/benamidar and beneficial/real owner(s) of the property, inter alia w.r.t. holding/transferring of the property and payment of consideration for such property. b) Whether the property is held/transferred for the immediate or future benefit, direct or indirect, of the person who has provided the consideration. c) Examination of the source of income through which the property was acquired. d) Whether a transaction or an arrangement in respect of the property has been made in a fictitious name. e) Whether the apparent owner is not aware of or denies knowledge of the property? Such a situation may lead to classification of the property as benami property. f) A property where the person providing the consideration is not traceable or is fictitious may also be classified as benami property. g) Who is bearing maintenance charges (including taxes, etc.) in respect of the property? h) Who is in possession of the title deed of the property? i) ....
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....a property is carried out in a fictitious name - In such cases, it appears more appropriate to take action with regard to the source of transaction/property under the Income-tax Act in the hands of its real owner if such source is unexplained. Simultaneously, the Prohibition of Benami Property Transactions Act also appears applicable in such cases. iv. The transaction/arrangement in respect of a property where the owner of the property is not aware of or denies knowledge of such ownership - In such cases, where it is found that the source of transaction/property is unexplained in the hands of its real owner, substantive implication appears in the hands of its real owner with regard to the source, and protective implication in the hands of its apparent owner. Simultaneously, the Prohibition of Benami Property Transactions Act also appears applicable in such cases. Prosecution of the apparent owner/benamidar may depend upon facts and circumstances of each case with regard to his involvement/inducement. v. The transaction/arrangement in respect of a property where the person providing the consideration (i.e. the real owner) is not traceable or is fictitious - In such....
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....ma attached at Annexure-IV. The monthly report must be emailed by 5th of the following month to [email protected] & [email protected]. 13. The above SOP may be brought to notice of all concerned in your Region for strict compliance. Yours faithfully, Encl .: As above. (Mritunjaya Sharma) DCIT (OSD) Inv.I, CBDT Ph .: 011-2309-5464 Fax: 011-2309-2802 Annexure-I Proforma of the statement/reference to be drawn under section 24(5) To The Adjudicating Authority, Prohibition of Benami Property Transactions Act, 1988 as amended by Benami Transactions (Prohibition) Amendment Act, 2016 Department of Revenue, Ministry of Finance, Room No. 26, 4th Floor, Jeevandeep Building, Parliament Street, New Delhi-110001 Tel- 011-23363620, FAX- 011-23344011, email: [email protected] Kind attention: Registrar/Administrative Officer Sub: Reference under section 24(5) before the Adjudicating Authority, Prohibition of Benami Property Transactions Act, 1988 as amended by Benami Transactions (Prohibition) Amendment Act, 2016 1. Reference No .................................. 2. Order No. and Date of Order under section 24(4) ........
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....pers to be filed before the Adjudicating Authority shall be fairly, legibly type-written or printed in Hindi or English on durable white foolscap folio paper of Metric A-4 size (30.5 cm long and 21.5 cm wide) on one side of paper only in double space with left margin of 5 cm and right margin of 2.5 cm paginated, indexed and stitched together in the paper book form. 2. The Initiating Officer shall also file soft copy (in word format) along with the reference application under section 24(5). 3. The Initiating Officer shall affix his signature and also state his name in capital letters near his signature and initial or sign at the bottom of each page with date on the last page. 4. The attestation of documents annexed to the reference or reply shall be made at the end of the document by writing, "This annexure is the true copy of the original document". After this the attester should put his signature, name and designation, clearly. 5. The statement/reference in above format shall be filed in duly indexed paper book in triplicate in spiral bound copies (one copy for each Member). There are three Members in the Adjudicating Authority- Chairman, Member (Admin) & Member (Law).....