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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....ohibition) 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 1004(E) dated 25.10.2016. The Act is to be implemented through the Income-tax authorities noti....
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....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, keeping track of dates & nature of hearing and keeping the Officers concerned and Standing Counsel(s) informed. vii. Any other related matter a....
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....tion 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. ii. Detection/identification of benami transaction/property is followed by the statutory process of provisional attachment, adjudication and confiscation of the property involved in benami transaction, as provided in Chapter IV of the Act. Opportunity of being heard is to be....
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....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 Authority. d. While making reference under section 24(5), Initiating Officer need to pray for confirmation of his order passed under section 24(4), giving due justification. e. The Initiating Officer need to attach duly certified copies of relevant documents along- with the reference and retain the original documents as the same may be required for....
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....mplaint- 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/imply complaint of tax evasion also. Therefore, the complaint of benami property shall be dealt with in the same manner as a tax evasion petition (TEP) and the procedure laid down for handling a TEP may be followed for handling the complaint/information of benami property/transaction also. The Pr.DIT(Inv.)/DIT(Inv.) concerned of the Central Registry Unit (CRU) shall disseminate the complaint to BPU with specific refe....
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....ect 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) Upon identification of a property as benami property or in case where the Investigating Officer has prima facie reason to believe that the property in question may be a benami property, the information is to be passed on to the Initiating Officer without any delay in accordance with procedure mentioned in para 9 above. The Initiating Officer, thereafter, may take necessary action u/s. 24 and under other provisions of the Act. 11. Harmonious interpretation of the provisions of ....
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.... 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 cases, where it is found that the source of transaction/property is unexplained, substantive implication appears to be in the hands of its apparent owner with regard to the source. Simultaneously, the Prohibition of Benami Property Transactions Act also appears applicable in such cases. vi. Seizure under the Income-tax Act and attachment under the Prohibition of Benami Property Transactions Act - During the course of search & seizure under the Income- tax Act, the authorized officer may put prohibitory order (P....
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.... 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) ................................... 3. Name, Address, Designation, Phone/Fax no., Mobile no., Email of: I. Initiating officer II. Approving Authority 4. Name, Address and other contact details of the following: i. Benamidar ii. Beneficial Owner iii. Interested parties, if any, including Bank, Company iv. The person, if any, who has made claim in respect of the property during the proceedings under section 24 5. Details of the properties provisionally attached under section 24(4): a. Movable property b. Immovable property 6. Copy of the Provisional Attachment Order p....
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....he 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). 6. Paper Books are also required to be served on Benamidar/Beneficial Owner/Interested Parties/Parties claiming the property along with notice under section 26(1). Thus, such spare copies will also be required. 7. If any document/deed/statement/order etc. is in a language other than English, then certified English translation thereof shall also be filed. 8. The statement/reference is to be filed along with forwarding letter by the Initiating Officer. 9. Until further orders, the provisions of Adjudicating Authority (Procedure) Regulation 2013, Prevention of Money Laundering Act, 2002 shall, subject to the provisions of this Act and to the extent permissible, be applicable in so far as may be to this Act also with reference t....