Hundreds of people and businesses are awaiting a Supreme Court decision to decide whether Benami law, one of the strongest, can be applied in retrospect.
A plethora of transactions like cash transfers, property deals, and share issuances have come under the lens with the invocation of the Benami Transactions (Prohibition) Amendment Act, which came into effect from November 1, 2016 following the amendment of a 28-year-old ineffective law.
A number of activities such as money transfers, land deals, and shareholding have been put on hold under the Benami Transactions (Prohibition) Amendment Act, which came into effect on 1 November 2016 following an amendment to the 28-year-old law.
Following the conclusion of an appeal to the Calcutta High Court ruling that the new law was not applicable in the past, the Supreme Court recently sought final written submissions from the parties, the legal tribunals said.
Attorney-General Abhishek Singhvi, who disputed the case, said, “I do not want to comment on the merits of the minor jury case where the verdict is reserved, and where I have argued over the main issue. I think everyone should be patient. But I would say it would be a very important decision. the procedure in the application of the Benami Act — that is, the extent to which the Benami Act applies to the sale that occurred long before any significant amendments to the Benami Act were made. “Without this I will not comment at this time.”review
The broad definition under the new Benami Act which includes not only ‘work’ but also ‘system’ for handling benami agreements — and severe penalties has shocked many of the law applied to them later. The tax department assesses whether the ‘legal owner’ of any property, land, cash, mortgage or other property is ‘genuine owner’; if not, it can use amended law to seize property, demand a quarter of the market value of the property as punishment, and place offenders – real or ‘beneficiary’ and ‘pre-‘ or ‘mid-‘ ‘behind bars.
‘The Framework of Law Has Changed Itself’
Deals in Benami may include the transfer of undisclosed money to a property buyer, who registers it in his or her name, and holds it in the name of the real owner; or, to provide anonymous cash to a group of investors who invest in a company promoted by a ‘beneficiary’ or a financial provider. If the lender is not available, the lender may be facing liability. Tax authorities can also track the proceeds from the sale of benami assets.
“The new law, however, highlights the difference between a transaction made under the old law, with a minimum penalty, and a transaction made after November 1, 2016, which entails a maximum penalty. said Senior Chartered Accountant Dilip Lakhani.
However, according to lawyer and former ITAT member Ashwani Taneja, the very nature of the Act has changed. “There were only 9 sections in the 1988 Act and the Amendment Act introduced 72 Sections, which brought about significant changes in the definition of Benami and the structure of the Benami Act. New authorities have been created and new powers empowered. (even without a decree) and eventually seized. Under these circumstances, it would be very difficult and wrong to apply the new law to the old things. in retrospect, which leads to very serious consequences. “
Usually as the Black Tax Act (to pay a tax on coastal goods), there are cases where the new Benami law applies where the Income Tax Act is invalid.
“There have been a number of administrative action under Benami law after the amendments and various High Courts have taken conflicting views on the matter.