The Prohibition of Benami Property Transactions (Conditions of Service of Members of Adjudicating Authority) Rules, 2019

 The Prohibition of Benami Property Transactions (Conditions of Service of Members of Adjudicating Authority) Rules, 2019[1]

 

In exercise of the powers conferred by section 68 read with sub-section (2) of section 9, sub-section (1) of section 13 of the Prohibition of Benami Property Transactions Act, 1988 (45 of 1988) (hereafter referred to as 'the Act'), the Central Government hereby makes the following rules, namely:—

1.     Short title and commencement

(1)   These rules may be called the Prohibition of Benami Property Transactions (Conditions of services of Members of Adjudicating Authority) Rules, 2019.

(2)   They shall come into force on the date[2] of their publication in the Official Gazette.

2.     Definition

(1)   In these rules, unless the context otherwise requires,-

(a)   "Act" means the Prohibition of Benami Property Transactions Act, 1988 (45 of 1988);

(b)   "Search-cum-Selection Committee" means the Search-cum-Selection Committee as referred to in rule 3;

(c)   "section" means a section of the Act.

(2)   Words and expression used and not defined in these rules but defined in the Act shall have the same meanings respectively assigned to them in the Act.

3.     Method of recruitment

(1)   The Member of the Adjudicating Authority shall be appointed by the Central Government, on the recommendation of the Search-cum-Selection Committee specified in sub-rule (4) in respect of the said members.

(2)   The Search-cum-Selection Committee shall determine its procedure for making its recommendation.

(3)   No appointment of Member of the Adjudicating Authority shall be invalid merely by reason of any vacancy or absence in the Search-cum-Selection Committee.

(4)   The Search-cum-Selection Committee for the post of the Member of the Adjudicating Authority shall consist of,-

(i)    Secretary to the Government of India, Ministry of Finance, Department of Revenue - Chairperson;

(ii)   Secretary to the Government of India, Ministry of Law and Justice, Department of Legal Affairs - Member;

(iii) Chairperson, Central Board of Direct Taxes - Member.

4.     Medical fitness

No person shall be appointed as the Member of the Adjudicating Authority, unless he is declared medically fit by an authority specified by the Central Government.

5.     Resignation

The Member of the Adjudicating Authority may, by writing under his hand addressed to the Central Government, resign his office at any time:

Provided that he shall, unless permitted by the Central Government to relinquish his office from the date as specified in the resignation letter, continue to hold office until the expiry of three months from the date of receipt of such notice by the Central Government or until a person duly appointed as a successor enters upon his office or until the expiry of his term of office, whichever is the earliest.

6.     Procedure for inquiry for removal of Member of Adjudicating Authority

(1)   If a written complaint is received by the Central Government, alleging any charge as referred to in clause (d) or clause (e) of the sub-section (1) of section 14 of the Act, in respect of a Member of the Adjudicating Authority, the Board shall make a preliminary scrutiny of such complaint.

(2)   If on preliminary scrutiny, the Board is of the opinion that there are reasonable grounds for making an inquiry into the truth of any charges in respect of the Member of the Adjudicating Authority, it, with the approval of Central Government, shall make a reference to the Committee constituted in this behalf to conduct the inquiry.

(3)   The Committee shall complete the inquiry within such period, not exceeding the period of twelve months from the date of receipt of the reference, as may be specified by the Central Government.

Provided that where it is not possible to complete the inquiry within the period specified by the Central Government, the Committee may record the reasons and seek extension of time from Central Government in writing, which may allow an additional time not exceeding the period of six months for completion of inquiry, at a time.

(4)   After the conclusion of the inquiry, the Committee shall submit its report to the Central Government stating therein its findings and the reasons thereof on each of the charges separately along with such observations as it may deem fit.

(5)   The Committee shall not be bound by the procedure laid down by the Code of Civil Procedure, 1908 (5 of 1908) but shall be guided by the principles of natural justice and shall regulate its own procedure, including the fixing of date, place and time of its inquiry.

7.     Salary and allowances

(1)   The Chairperson of the Adjudicating Authority shall be paid a salary of Rs. 1,82,200- 2,24,100 and shall be entitled to draw allowances as are admissible to a Central Government Officer holding post carrying the same pay.

(2)   The Member of the Adjudicating Authority shall be paid a salary of Rs. 1,44,200- 2,18,200 and shall be entitled to draw allowances as are admissible to a Central Government Officer holding post carrying the same pay.

(3)   In case a person, appointed as the Chairperson or a Member of the Adjudicating Authority, is in receipt of any pension, the pay of such person shall be reduced by the gross amount of pension drawn by him.

8.     Pension, Gratuity and Provident Fund

(1)   In case of a member of the Indian Legal Service or a member of the Indian Revenue Service appointed to the post of the Chairperson or Member of the Adjudicating Authority, the service so rendered in the Adjudicating Authority shall count for pension to be drawn in accordance with the rules of the service to which he belongs and he shall be continued to be governed by the provisions of the General Provident Fund (Central Services) Rules, 1960, the Contributory Provident Fund (India) Rules, 1962 and the Contribution Pension System, if he was governed by such provisions before his appointment as the Chairperson or the Member.

(2)   Additional pension and gratuity shall not be admissible for service rendered in the Adjudicating Authority.

9.     Leave

(1)   The Member of the Adjudicating Authority shall be entitled to thirty days of earned Leave for every year of service.

(2)   The Casual Leave not exceeding eight days in a calendar year shall be granted to the Member of the Adjudicating Authority.

(3)   The payment of leave salary during leave shall be governed by rule 40 of the Central Civil Services (Leave) Rules, 1972.

(4)   The Member of the Adjudicating Authority shall be entitled to encashment of leave in respect of the earned Leave standing to his credit, subject to the condition that maximum leave encashment, including the amount received at the time of retirement from previous service shall not in any case exceed the prescribed limit under the Central Civil Service (Leave) Rules, 1972.

10.  Leave sanctioning authority

(1)   Leave sanctioning authority, -

(a)   for Chairperson of the Adjudicating Authority shall be the Central Government, who shall also be sanctioning authority for Members, in case of absence of Chairperson;

(b)   for the Member of the Adjudicating Authority shall be the Chairperson.

(2)   The Central Government shall be the sanctioning authority for foreign travel to the Chairperson or the Member of the Adjudicating Authority.

11.  Accommodation

The Members shall not be eligible for allotment of general pool residential accommodation but they shall be entitled to draw house rent allowance at the rates as are admissible to other Central Government officers of equivalent pay:

Provided that if the person appointed as Member is already in occupation of Government accommodation for which Central Government officers of equivalent pay are eligible, he shall be allowed to retain such accommodation from the date of his joining the Adjudicating Authority.

12.  Declaration of Financial and other Interests

The Member of the Adjudicating Authority shall, before entering upon his office, declare his assets, his liabilities and financial and other interests.

13.  Other conditions of service

(1)   The other conditions of service of the Member of the Adjudicating Authority with respect to which no express provision has been made in these rules, shall be such as are admissible to a Central Government Officer of a corresponding status.

(2)   The Member of the Adjudicating Authority shall not practice before the Adjudicating Authority after retirement from the service of the Adjudicating Authority.

(3)   The Member of the Adjudicating Authority shall not undertake any arbitration work while functioning in these capacities in the Adjudicating Authority.

(4)   The Member of the Adjudicating Authority shall not, for a period of two years from the date on which they cease to hold office, accept any employment in, or connected with the management or administration of, any person who has been a party to a proceeding before the Adjudicating Authority:

Provided that nothing contained in this rule shall apply to any employment under the Central Government or a State Government or a local authority or in any statutory authority or any corporation established by or under any Central, State or Provincial Act or a Government company as defined in clause (45) of section 2 of the Companies Act, 2013 (18 of 2013).

14.  Oaths of office and secrecy

Every person appointed to be the Member of the Adjudicating Authority shall, before entering upon his office, make and subscribe an oath of office and secrecy in Form-I and Form-II annexed to these rules.

15.  Power to relax

Where the Central Government is of the opinion that it is necessary or expedient so to do, it may, by order for reasons to be recorded in writing relax any of the provisions of these rules with respect to any class or category of persons.

16.  Interpretation

If any question arises relating to the interpretation of these rules, the decision of the Central Government thereon shall be final.

17.  Saving

Nothing in these rules shall affect reservation, relaxation of age-limit and other concessions required to be provided for the Scheduled Castes, the Scheduled Tribes, Ex-servicemen and other special categories of persons in accordance with the orders issued by the Central Government from time to time in this regard.

 

FORM-I

(See rule 14)

Form of Oath of Office for the Chairperson/Member of the Adjudicating Authority

I, A. B., having been appointed as Chairperson/Member of Adjudicating Authority do solemnly affirm/do swear in the name of God that I will faithfully and conscientiously discharge my duties as the Chairperson/Member of Adjudicating Authority to the best of my ability, knowledge and judgment, without fear or favour, affection or ill-will and that I will uphold the Constitution and the laws of land.

 

 

FORM-II

(See rule 14)

Form of Oath of Secrecy for the Chairperson/Member of the Adjudicating Authority

I, A. B., having been appointed as the as Chairperson/Member of Adjudicating Authority do solemnly affirm/do swear in the name of God that I will not directly or indirectly communicate or reveal to any person or persons any matter which shall be brought under my consideration or shall become known to me as Chairperson/Member of Adjudicating Authority except as may be required for the due discharge of my duties as the Chairperson/Member of Adjudicating Authority.

 

______________________________

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[1].      Vide GSR 379(E), dated 27.05.2019, published in the Gazette of India, Extraordinary, Pt. II, Sec 3(i), No.318, dated 27.05.2019.

[2].      Came into force on 27.05.2019.

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The Prohibition of Benami Property Transactions Rules, 2016

 The Prohibition of Benami Property Transactions Rules, 2016[1]

 

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:—

1.     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.

2.     Definitions

(1)   In these rules, unless the context otherwise requires,-

(a)   "Act" means the Prohibition of Benami Property Transactions Act, 1988 (45 of 1988);

(b)   "Chapter" means a Chapter of the Act;

(c)   "Form" means a Form appended to these rules; and

(d)   "Section" means a section of the Act.

(2)   Words and expressions used and not defined in these rules but defined in the Act, the Indian Trusts Act, 1882 (2 of 1882), the Indian Succession Act, 1925 (39 of 1925), the Indian Partnership Act, 1932 (9 of 1932), the Income-tax Act, 1961 (43 of 1961), the Depositories Act, 1996 (22 of 1996), the Prevention of Money-Laundering Act, 2002 (15 of 2003), the Limited Liability Partnership Act, 2008 (6 of 2009) and the Companies Act, 2013 (18 of 2013) or the rules made under those Acts, shall have the same meanings respectively assigned to them in those Acts and rules.

3.     Determination of price in certain cases

(1)   For the purposes of sub-clause (ii) of clause (16) of the section 2 of the Act, the price shall be determined in the following manner, namely:-

(a)   the price of unquoted equity shares shall be the higher of,-

(I)    its cost of acquisition;

(II)   the fair market value of such equity shares determined, on the date of transaction, by a merchant banker or an accountant as per the Discounted Free Cash Flow method; and

(III) the value, on the date of transaction, of such equity shares as determined in the following manner, namely:-

The fair market value of unquoted equity shares = (A + B - L) × (PV)/ (PE) 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;

4.     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 authorized by the Initiating Officer on or before fifteen days from the end of the month in which said statement is received.

5.     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).

6.     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 Authorized Officer.

(2)   Where an order referred to in sub-rule (1) has been received by the Authorized Officer in respect of any immovable property, he shall,-

(i)    forthwith issue notice to the authority of the Central Government or a State Government, as case may be, having jurisdiction for the purposes of registration of such immovable property, intimating about the confiscation of the property;

(ii)   arrange to place copy of the notice at some conspicuous part of the immovable property for the benefit of general public mentioning clearly therein, in English and in vernacular language, that the property has been confiscated under the Act and vests absolutely in the Central Government;

(iii) arrange to make a proclamation for the confiscation of immovable property at some place on or near such property by beat of drum or other customary mode.

(3)   Where an order referred to in sub-rule (1) has been received by the Authorized Officer in respect of any movable property, he shall,-

(i)    forthwith issue a notice to the authority or person having the custody of such movable property informing him about the confiscation of such property; or

(ii)   sell the property, if the property is liable to speedy and natural decay or the expenses for maintenance is likely to exceed its value, with the leave of the concerned Adjudicating Authority, and deposit the sale proceeds in the nearest Government Treasury or branch of the State Bank of India or its subsidiaries or in any nationalized bank in fixed deposit and retain the receipt thereof:

Provided that where the owner of the property furnishes the fixed deposit receipt of State Bank of India or its subsidiaries or a nationalized bank equivalent to the value of property in the name of Administrator, the authorized officer may accept and retain such fixed deposit receipt as security:

Provided further that where the movable property is a mode of conveyance of any description, the authorized officer, after obtaining its valuation report from the Motor Licensing Authority or any other authority, as the case may be, may accept and retain the fixed deposit receipt of State Bank of India or its subsidiaries or a nationalized bank, equivalent to the value of the movable property as security in the name of Administrator;

(iii) cause to deposit the property consisting of cash, Government or other securities or bullion or jewelery or other valuables in a locker in the name of the Administrator or in the form of fixed deposit, as the case may be, in State Bank of India or its subsidiaries or in any nationalized bank and retain the receipt thereof;

(iv)  cause to get the property in the form of shares, debentures, units of Mutual Fund or instruments to be transferred in favour of Administrator;

(v)   issue a direction to the bank or financial institution, as the case 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 "Authorized Officer" means an Income Tax Officer who is authorized 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 authorized 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).

9.     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).

10.  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 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.

 

 

FORM 1

[See rule 8(3)]

MANAGEMENT OF CONFISCATED PROPERTY REGISTER (MOVEABLE)

Order number:

Date of receipt of properties:

Description of properties (quantity, amount, estimated value):

Name(s) and address(es) of the benamidar and beneficial owner, if his identity is known:

Name and address of the Treasury or bank where the properties are deposited for safe custody:

Date and time of deposit of confiscated properties in the Treasury or bank:

Receipt number with date of the receipt obtained from the Treasury or bank:

Remarks of the Administrator:

…………………………………….

(Signature of the Administrator)

…………………………………

Name of the Administrator

Date: ……………….

(Seal)

 

FORM 2

[See rule 8(5)]

MANAGEMENT OF CONFISCATED PROPERTY REGISTER (IMMOVEABLE)

Order Number:

Date of receipt of properties:

Description of properties:

(In case of land:- area, survey number, plot number, location and complete address. In case of building: house number, location and complete address)

Name(s) and address(es) of the benamidar and beneficial owner, if his identity is known:

Remarks of the Administrator:

……………………………………

(Signature of the Administrator)

……………………….…………

Name of the Administrator

Date: …………….

(Seal)

 

 

FORM 3

[See rule 10(1)]

From__________________________________________________________________________

(Mention name and address of the appellant here).

 

 

To

The Registrar,

Appellate Tribunal

(Address)

Sir,

The above-named appellant, begs to prefer this appeal under section 46 of the Prohibition of Benami Property Transactions Act, 1988 against order Number ______________ dated _________ passed by the authority (address of Adjudicating Authority) under the said Act on the following facts and grounds.

FACTS

(Mention briefly the facts of the case here. Enclose copy of the order [passed by the authority] and copies of other relevant documents, if any.)

GROUNDS

(Mention here the grounds on which appeal is preferred).

PRAYER

In the light of what is stated above, the appellant prays for the following relief:-

RELIEF SOUGHT

(Specify the relief sought)

DECLARATION

The fee payable for this appeal as mentioned in sub-rule (2) of rule 10 has been deposited in the form of demand draft with the Registrar, Appellate Tribunal, …………….. (Address) ………………… vide receipt number____________ dated __________.

 

……………………………….

(Signature of the Appellant)

………………………………

(Name of the Appellant)

 

VERIFICATION

I........................... the appellant, do hereby declare that the facts stated above are true to the best of my information and belief.

Verified today the .................................... day of ...........................

 

………………………………..

(Signature of the Appellant)

………………………………

(Name of the Appellant)

List of documents:

Place: …………….

Date: ……………..

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[1].      Vide GSR 1004(E), dated 25.10.2016, published in the Gazette of India, Extraordinary, Pt. II, Sec 3(i), dt. 25.10.2016.

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