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The Central Government makes the Prohibition of Benami Property Transactions Rules, 2016 to govern property valuation, information sharing, provisional attachment, confiscation, and appeals under the Act. The rules apply to unquoted equity share pricing, income-tax authority statement transmission, property attachment by Initiating Officers, and management of confiscated assets by Authorised Officers and Administrators. Appellants file appeals to the Appellate Tribunal in Form No. 3 with a fee of ten thousand rupees. The rules come into force on the first day of November, 2016.
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[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART–II, SECTION 3, SUB-SECTION (ii)] GOVERNMENT OF INDIA MINISTRY OF FINANCE (DEPARTMENT OF REVENUE)
NOTIFICATION New Delhi, the 25th October, 2016. G.S.R. 1004(E).—In exercise of the powers conferred by section 68 of the Prohibition of Benami Property Transactions Act, 1988 (45 of 1988), the Central Government hereby makes the following rules, namely:-
Short title and commencement.—(1) These rules may be called the Prohibition of Benami Property Transactions Rules, 2016. (2) They shall come into force on the 1st day of November, 2016.
Definitions.—(1) In these rules, unless the context otherwise requires,-
where, A= book value of all the assets (other than bullion, jewellery, precious stone, artistic work, shares, securities and immovable property) as reduced by,- (i) any amount of income-tax paid, if any, less the amount of income-tax refund claimed, if any, and (ii) any amount shown as asset including the unamortised amount of deferred expenditure which does not represent the value of any asset; B= the price that the bullion, jewellery, precious stone, artistic work, shares, securities and immovable property would ordinarily fetch on sale in the open market on the date of transaction; L= book value of liabilities, but not including the following amounts, namely:—
(i) the paid-up capital in respect of equity shares;
(ii) the amount set apart for payment of dividends on preference shares and equity shares;
(iii) reserves and surplus, by whatever name called, even if the resulting figure is negative, other than those set apart towards depreciation;
(iv) any amount representing provision for taxation, other than amount of income-tax paid, if any, less the amount of income- tax claimed as refund, if any, to the extent of the excess over the tax payable with reference to the book profits in accordance with the law applicable thereto;
(v) any amount representing provisions made for meeting liabilities, other than ascertained liabilities;
(vi) any amount representing contingent liabilities other than arrears of dividends payable in respect of cumulative preference shares; PE = total amount of paid up equity share capital as shown in the balance-sheet; PV= the paid up value of such equity shares;
Furnishing of Information.—For the purpose of sub-section (2) of section 21, the income-tax authority referred to in sub-section (1) of the section 285BA of Income-tax Act, 1961 (43 of 1961) or such other authority or agency which is prescribed under sub-section (1) of section 285BA shall electronically transmit a copy of statement received by it under sub-section (1) of section 285BA of that Act to the Initiating Officer or such authority or agency authorised by the Initiating officer on or before fifteen days from the end of the month in which said statement is received.
Provisional attachment.—For the purposes of sub-section (3) of section 24, the Initiating Officer shall provisionally attach any property in the manner provided in the Second Schedule of Income-tax Act, 1961(43 of 1961).
Confiscation of property under second proviso to sub-section (1) of section 27.—(1) Where an order of confiscation of property under sub-section (1) of section 27 has been made, the Adjudicating Authority shall send a copy of the order to the Authorised Officer. (2) Where an order referred to in sub-rule (1) has been received by the Authorised Officer in respect of any immovable property, he shall,-
Central Government;
may be, to transfer and credit the money to the account of the Administrator, where the property is in the form of money lying in a bank or a financial institution. Explanation.- For the purposes of this rule, an “Authorised Officer” means an Income Tax Officer who is authorised by the Adjudicating Authority in this behalf. 7. Receipt of confiscated property under sub-section (1) of section 28.—The Administrator shall, at the time of receiving the confiscated property, ensure proper identification of such property with reference to its particulars mentioned in the order made under sub-section (1) of section 27. 8. Management of confiscated property under sub-section (1) of section 28.—(1) Where the property confiscated is of such a nature that its removal from the place of attachment is impracticable or its removal involves expenditure out of proportion to the value of the property, the Administrator shall arrange for the proper maintenance and custody of the property at the place of its attachment.
(2) If the property confiscated consists of cash, Government or other securities, bullion, jewellery or other valuables, the Administrator shall cause to deposit them for safe custody in the nearest Government Treasury or a branch of the Reserve Bank of India or the State Bank of India or its subsidiaries or in any authorised bank.
(3) The Administrator shall maintain a register containing the details in Form No. 1 annexed to these rules for recording entries in respect of moveable property, such as cash, Government or other securities, bullion, jewellery or other valuables.
(4) The Administrator shall obtain a receipt from the Treasury or the bank, as the case may be, against the deposit of moveable properties stated in sub-rule (2).
(5) The Administrator shall maintain a register containing the details in Form No. 2 annexed to these rules for recording entries in respect of property other than the properties referred to in sub-rule (2).
Disposal of confiscated property under sub-section (3) of section 28.— Where the Central Government directs that the property vested in it under sub-section (3) of section 27 be disposed of, then, the administrator shall arrange to dispose of the property in the manner provided in the Second Schedule to the Income-tax Act, 1961(43 of 1961).
Appeals to the Appellate Tribunal.—(1) An appeal to the Appellate Tribunal under sub-section (1) of section 46 of the Act shall be filed in Form No. 3 annexed to these rules.
(2) At the time of filing, every appeal shall be accompanied by a fee of ten thousand rupees.
(3) The appeal shall set forth concisely and under distinct head the grounds of objection to the order appealed against and such grounds shall be numbered consecutively; and shall specify the address of service at which notice or other processes of the Appellate Tribunal may be served on the appellant and the date on which the order appealed against was served on the appellant. (4) Where the appeal is preferred after the expiry of the period of forty-five days referred to in sub-section (1) of section 46, it shall be accompanied by a petition, in quadruplicate, duly verified and supported by the documents, if any, relied upon by the appellant, showing cause as to how the appellant had been prevented from preferring the appeal within the period of forty- five days.
