THE BENAMI TRANSACTIONS (PROHIBITION) AMENDMENT BILL, 2015

Introduced in Lok Sabha on 13.05.2015

FINANCIAL MEMORANDUM

This Bill seeks to amend the law prohibiting benami transactions, holding property in benami and restricting right to recover or transfer property held benami, and providing mechanism and procedure for confiscation of property held benami. The Benami Transaction (Prohibition) Amendment Bill, 2015 proposes implementation of the said Act by the existing institutional structure of the Income Tax Department.

2. Clause 9 of the Bill empowers the Central Government to appoint one or more persons not below the rank of Commssioner of Income-tax and Joint Secretary to the Government of India as Adjudicating or Adjudicating Authorities. The said clause 9 in the proposed section 30 empowers the Central Government to establish an Appellate Tribunal to hear appeals against the orders of the Adjudicating Authority. Clause 9 empowers the Central Government to provide the Appellate Tribunal with such officers and employees as the Central Government may deem fit.

3. Initials, it is proposed to constitute three Benches of the Appellate Tribunals at Delhi, Mumbai and Chennai. It is also proposed to appoint for each Bench of the Appellate Tribunal one officer of the rank of Joint Secretary to the Government of India, two Directors and four Assistant Directors with necessary staff and employees to assist such Bench. It is also proposed to appoint four Adjudicating Authorities each in Delhi, Kolkata, Chennai and Mumbai with necessary officers, staff and employees to assist them in discharge of their duties.

The recurring expenditure for the aforesaid appointment in respect of salaries, allowances and office expenses, etc., is estimated to be Rs. 40 crores per annum. The nonrecurring expenditure in respect of office equipment, office furniture, electrical installation and motor vehicles, etc., is estimated to be Rs. 50 crores. The Bill does not involve any other recurring or non-recurring expenditure.

MEMORANDUM REGARDING DELEGATED LEGISLATION

Clause 4 of the Bill proposes to substitute section 2. Clause (16) of the proposed section 2 seeks to define “fair market value”, in relation to a property to mean the price that the property would ordinarily fetch on sale in the open market on the date of the transaction; and where the price is not ascertainable, such price as may be determined in accordance with the rules made under the proposed provision.

Clause 9 of the Bill proposes to insert Chapter III to VII in the Act. The Proposed section 9 seeks to provide for qualifications for appointment of Chairperson and Members of the proposed section 9 that the Chairperson and other Members of the Adjudicating Authority shall be appointed by the Central Government in accordance with the rules made in this regard.

Sub-section (1) of the proposed section 13 seeks to provide that the salary and allowances payable to, and the other terms and condtions of service of the Chairperson and other Members of the Adjudicating Authority shall be such as per the rules made in this regard by the Central Government.

The proposed section 18 seeks to provide for authorities and their jurisdiction under the Act. The proposed sub-section (2) provides that the authorities shall exercise all or any of the powers and perform all or any of the functions conferred on, or, assigned, as the case may be, to it under this Act or in accordance with such rules as may be made by the Central Government in this regard.

Clause (f) of sub-section (1) of the proposed section 19 seeks to provide that the authorities shall, for the purposes of this Bill, have the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 while trying a suit in respect of any other matter which may be prescribed. Accordingly, it is proposed to empower the Central Government to make rules in this regard

Sub-section (2) of the proposed section 21 seeks to provide that the officer of the Central Government or State Government or a local body or any person or officer who is responsible for registering and maintaining books of account or other documents containing a record of any transaction relating to any property or any other person shall furnish such information and in such form and manner as may be prescribed to any authority under this Bill. Accordingly, it is proposed to empower the Central Government to make rules in this regard for the pruposes of this provision.

Sub-section (3) of the proposed section 24 seeks to provide that where the Initiating Officer is of the opinion that the person in possession of the property held benami may alienate such peroperty, he may, with the previous approval of the Approving Authority, by order in writing, attach provisionally such property in the manner as may be prescribed, for a period not exceeding ninety days form the date of issue of a show cause notice.

Sub-section (1) of the proposed section 27 seeks to provide that where an order is passed in respect of any property under sub-section (3) of section 26 holding such property to be a benami property, the Adjudicating Authority shall, after giving an opportunity of being heard to the person concerned, make an order confiscating the property held to be a benami property. Second proviso to sub-section (1) of the proposed section 27 seeks to provide that the confiscation of the property shall be made in accordance with such procedure as may be prescribed.

Sub-section (1) of the proposed section 28 seeks to provide that the Administrator shall have the power to receive and manage the property, in relation to which an order of confiscation under sub-section (1) of the proposed 27 has been made, in such manner and subject to such conditions, as may be prescribed. Sub-section (3) of the proposed section 28 seeks to provide that the Administrator shall also take such measures, as the Central Government may direct, to dispose of the property which is vested in the Central Government under sub-section (3) of the proposed section 27, in such manner and subject to such conditions as may be prescribed.

The proposed section 33 seeks to provide that the salary and allowances payable to and the other terms and conditions of service of the Chairperson and other Members of the Appellate Tribunal shall be such, as may be prescribed.

The proposed section 35 seeks to provide for removal of Chairperson and Member of the Appellate Tribunal in certain circumstances. Sub-section (2) of the said section seeks to provide that the Chairperson or Judicial member shall not be removed from office except by an order made by the Central Government after an inquiry made by Chief Justice of the High Court. Sub-section (4) of the said section seeks to provide that the Central Government may regulate the procedure for inquiry referred to in sub-section (2) in the manner as may be prescribed.

Sub-section (3) of the proposed section 39 seeks to provide that the salaries and allowances and other conditions of service of the officers and employees of the Appellate Tribunal shall be such as may be prescribed.

Clause (i) of sub-section (2) of the proposed section 40 seeks to provide that the Appellate Tribunal shall have, for the purposes of discharging its functions under this Act, the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 while trying a suit, in respect of any other matter than those listed in items (a) to (h) of the said subsection (2).

Sub-section (1) of the proposed section 46 seeks to provide that any person, including the Initiating Officer, aggrieved by an order of the Adjudicating Authority may prefer an appeal in such form along with such fees, as may be prescribed, to the Appellate Tribunal against the order passed by the Adjudicating Authority.

2. The matters in respect of which rules may be made are generally matters of procedure and administrative details and it is not practicable to provide for them in the Bill itself. The delegation of legislative power is, therefore, of a normal character.