Cbdt Extends Date Of Passing Order Under The Benami Act

To facilitate the taxpayer in meeting the requirement of statutory and regulatory compliance, Central Board of Direct Taxes (CBDT), vide Notification Notification No. 16/2022 [F. No. 370142/35/2020-TPL-Part-II] / SO 1440(E) dated 28th March 2022, has further extended the Date of Passing Order under the Benami Act. The Present article briefs the extensions so provided.

Extended Date of Passing Order under the Benami Act

In exercise of the powers conferred by section 3(1) of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, the Central Board of Direct Taxes (CBDT) has extended the date of passing of any order under section 26(3) of the Benami Act to 30-09-2022. The extension has been given in those cases where the due date to pass the order falls between 20-03-2020 to 30-06-2021. Earlier, such date was extended till 30-09-2021 vides notification no. S.O. 966(E), dated 27-2-2021

Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020

To relieve various compliance burdens of taxpayers during the COVID-19 pandemic, the CBDT had enacted The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (Relaxation Act) to relax various compliances under specified laws, including the Income Tax Laws (ITL) and Prohibition of Benami Property Transactions Act, 1988 (Benami Law). For more details on the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, click here

Process Of Attachment Of Benami Property And Its Adjudication Under Benami Law

Section 24 - Notice and attachment of property in Benami transaction

As per section 24 of the Benami act, If the Initiating Officer, based on material in his possession issues a notice to the person to show cause why the property should not be treated as Benami property. The details will be approved by the approving authority and will be forwarded to the inquiry officer. If the Initiating Officer passes an order continuing the provisional attachment of the property or passes an order provisionally attaching the property, he shall, within fifteen days from the date of the attachment, draw up a statement of the case and refer it to the Adjudicating Authority.

Section 26 of Benami Law- Adjudication of Benami property

On receipt of a reference under sub-section (5) of section 24 of Benami Property Transactions Act, 1988 (Benami Law), the Adjudicating Authority shall issue notice to the following persons:

The person specified as a benamidar
Any person referred to as the beneficial owner
Any interested party, including a banking company
Any person who has claimed in respect of the property

The Adjudicating Authority shall issue notice within 30 days from the date on which a reference has been received: The notice shall provide not less than thirty days to the person to whom the notice is issued to furnish the information sought.

If the property is held jointly by more than one person, the Adjudicating Authority shall make all endeavors to serve notice to all persons holding the property:
If the notice is served on any one of the persons, the service of notice shall not be invalid on the ground that the said notice was not served to all the persons holding the property.

The Adjudicating Authority shall, after considering the reply making to be made such inquiries and call for such reports or evidence as it deems fit Taking into account all relevant materials, provide an opportunity of being heard by the person specified as a benamidar, the Initiating Officer, and any other person who claims to be the owner of the property to pass an order-

For holding the property not to be a Benami property and revoking the attachment order; or
For holding the property to be a Benami property and confirming the attachment order, in all other cases.

Note: Now, CBDT vides its Notification dated 28th March 2022 has extended the date of passing of any order to 30-09-2022. The extension has been given in those cases where the due date to pass the order falls between 20-03-2020 to 30-06-2021. The Adjudicating Authority is satisfied that some part of the properties in respect of which reference has been made to him is Benami property, but is not able to specifically identify such part, he shall record a finding to the best of his judgment as to which part of the properties is held Benami. Note:

The Adjudicating Authority may, at any stage of the proceedings strike out the name of any party improperly joined or add the name of any person whose presence before the Adjudicating Authority to enable him to adjudicate upon and settle all the questions involved in the reference.
If no order shall be passed after the expiry of one year from the end of the month in which the reference was received.
The benamidar or any other person who claims to be the owner of the property may either appear in person or take the assistance of an authorized representative of his choice to present his case.

Click here to know more about the Prohibition of Benami Property Transactions Act

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Frequently Asked Questions

Common questions about CBDT Extends Benami Order Date for Taxpayers.

The Benami Act refers to the Prohibition of Benami Property Transactions Act, 1988. It is a law that prohibits individuals from holding property in the name of another person (known as a "benamidar") while the real beneficiary is someone else (the beneficial owner). The Act aims to prevent money laundering and other illegal activities involving benami properties.

The Central Board of Direct Taxes (CBDT) has extended the deadline for passing orders under Section 26(3) of the Benami Act to September 30, 2022. This extension is aimed at facilitating taxpayers in meeting statutory and regulatory compliance requirements during the COVID-19 pandemic.

The process involves an Initiating Officer issuing a notice to the person to show cause why the property should not be treated as benami property. If the Initiating Officer passes an order provisionally attaching the property, the case is referred to the Adjudicating Authority within 15 days.

The Adjudicating Authority is responsible for issuing notices to the benamidar, the beneficial owner, and other interested parties. After considering the replies and evidence, the Authority may pass an order holding the property as benami or revoking the attachment order.

Earlier, the Adjudicating Authority had to pass an order within one year from the end of the month in which the reference was received. However, the CBDT's notification has extended this deadline to September 30, 2022, for cases where the due date fell between March 20, 2020, and June 30, 2021.

The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, also known as the Relaxation Act, was enacted by the CBDT to relax various compliance burdens on taxpayers during the COVID-19 pandemic. It applies to laws like the Income Tax Laws and the Benami Law.

Yes, the benamidar or any other person who claims to be the owner of the property can either appear in person or take the assistance of an authorized representative of their choice to present their case before the Adjudicating Authority.

If the Adjudicating Authority is satisfied that some part of the properties is benami but cannot specifically identify such part, they shall record a finding to the best of their judgment as to which part of the properties is held benami.

Yes, the Adjudicating Authority may, at any stage of the proceedings, strike out the name of any party improperly joined or add the name of any person whose presence before the Authority is necessary to enable it to adjudicate upon and settle all the questions involved in the reference.

The primary purpose of the Benami Act is to prevent money laundering and other illegal activities involving benami properties, where individuals hold property in the name of another person while being the real beneficiary. The Act aims to discourage such transactions and promote transparency in property ownership.