A person found guilty of a benami transaction will face imprisonment of three years, according to a proposal being considered by the government for curbing the menace of black money.
Apart from the stringent punishment being suggested in the proposed Benami Transaction legislation, the government is also considering empowering authorities to summon any official of a bank, financial institution or a company for investigation, official sources told The Indian Express.
Finance Minister Arun Jaitley had announced in the Budget 2015-16 that the government will introduce a legislation in the current session of Parliament to deal with the issue of domestic black money generation.
“The Benami Transaction Bill will be in conformity with the United Nations Convention Against Corruption (UNCAC) and will act as a major deterrent for curbing generation of black money in real estate,” the source said.
A benami transaction means any transaction in which property is transferred to one person for a consideration paid or provided by another person. The Bill will provide for confiscation of benami property and prosecution of the violator of the law.
The power to summon will be provided on the lines of section 11(b) of the Prevention of Money Laundering Act, 2002, which provides the same powers as vested in a civil court under the Code of Civil Procedure with respect to discovery and inspection; enforcing the attendance of any person including any officer of a banking company or a financial institution or a company and examining him under oath; compelling the production of records; receiving evidence on affidavits; and issuing commissions for examination of witnesses and documents.
The source said that the finance ministry is also weighing the option of having an “Appellate Tribunal” for dealing with the benami transaction cases to ensure their speedy disposal.
“We are also pruning the list of exempted persons to include only spouse and unmarried daughter in the list,” the source said adding that terms including transaction, partner, agent, arrangement, banking company, company, executor, and consideration provided or paid will also be defined to bring clarity and ensure effective implementation of the Act.
The Benami Transactions (Prohibition) Act was first enacted in 1988 but it was not implemented because of certain loopholes. The rules for the act were also not framed owing to the inherent infirmities. The UPA-II introduced a Benami Transactions (Prohibition) Bill, 2011, replacing the 1988 Act. However, it lapsed with the dissolution of the 15th Lok Sabha.
The standing committee of finance, which vetted the 2011 Bill, had suggested in its report that stricter punishment should be provided in the Bill in case of violations while severely restricting the exemptions other than purchasing property by any person in the name of spouse or unmarried daughter.