With reference to the ‘Prohibition of Benami Property Transactions Act, 1988 (PBPT Act)’, consider the following statements:
- A property transaction is not treated as a Benami transaction if the owner of the property is not aware of the transaction.
- Properties held Benami are liable for confiscation by the Government.
- The Act provides for three authorities for investigations but does not provide for any appellate mechanism.
Which of the statements given above is/are correct?
- 1 only
- 2 only
- 1 and 3 only
- 2 and 3 only
Explanation
Statement 1 is incorrect
- The Benami Transactions (Prohibition) Act was renamed the Prohibition of Benami Property Transactions Act (PBPT Act) when the Benami Transactions (Prohibition) Amendment Act came into force on November 1, 2016.
- A benami transaction, as defined under the Act, is a transaction in which:
- Property is held by a person (other than in fiduciary capacity) on behalf of another person who has paid for it; or
- It is held in a fictitious name; or
- The owner of such property is unaware of or denies having knowledge of such ownership; or
- The person financing such a transaction is not traceable.
Statement 2 is correct
- Properties held benami are liable for confiscation by the Government without payment of compensation.
Statement 3 is incorrect
- An appellate mechanism has been provided under the PBPT Act in the form of Adjudicating Authority and Appellate Tribunal.
