Par panel for fast enactment of law to curb Benami Transaction

Benami transaction refers to sale or purchase of a property in fictitious name.

In view of the economic gravity of such transactions,the Committee’s report which was tabled in the Lok Sabha today suggested that the provisions of the new Benami Transactions Prohibition law should extend to Jammu & Kashmir.

The Committee also said that to unearth the unaccounted wealth amassed by corrupt public servants,it would be necessary to prune the list of exemptions in the new law.

Although the government had initially enacted the Benami Transactions (Prohibition) Act in 1988,it could not be operationalised as no rules were framed. Later,the government decided to enact a fresh law on the subject.

“The Committee failed to understand as to why the government went into a slumber after promulgation of Ordinance in a hurry and enactment of law to prohibit benami transactions,” the report said.

It further added,”The government was not sincere in operationalising the benami law. The Committee would expect that at least now the government will bring in this long overdue legislation with due seriousness and implement it at the earliest.”

With regard to maximum punishment under the new law,the report said it should be retained at three years,as in the 1988 Act,instead of two years proposed in the 2011 Bill.

The Committee recommended that the government “review the definition clauses of the Bill,so as to include proper definitions for every relevant term in the Bill itself”.

On exceptions in the new law,it said,”Exemptions should be pruned and there should be no exemption other than purchasing property by any person in the name of his/her spouse or unmarried daughter”.

The Committee observed that the clause on ‘Property held benami liable to confiscation’ was silent on its applicability to agricultural land,which is a State subject.

“The Committee desire that necessary clarification may be provided in the enabling Clause,specifying the manner of confiscating the benami property involving agricultural land after examining the constitutional/legal position,” it said.

The Committee also suggested that provisions should be incorporated in the new law to ensure that the Income Tax authority and agencies under the Prevention of Money Laundering Act should work in a coordinated manner to check illegal transactions.

It has also made a case for mandatory reporting of suspicious transactions to relevant authorities.

The committee wanted the government to prescribe adequate

checks and balances in the law to prevent the misuse of discretionary powers bestowed on the Initiating Officer so that genuine transactions are not subjected to avoidable harassment.

It further recommended the government to set up an Appellate Tribunal exclusively for speedy disposal of the cases under the proposed Act.