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, that attracts 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."
"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 PM Modi has himself spoken at various forums and poll rallies," a senior Finance Ministry official told the news agency.
Records show that the existing Authority is forced to work without a regular Chairman since April 1 as the incumbent retired a day before and has only two working members now.