Under Benami law, IT assets worth Rs 18,400 crore till July 31: report

The Income Tax (IT) Department seized assets worth Rs 18,400 crore under the Benami Transactions Prohibition Act 1988, until July 31, as the BusinessLine reported. On August 23, the Supreme Court declared the retroactive use of the amended law unconstitutional. The changes made in 2016 can only apply to transactions made before October 24, 2016.

In response to an RTI filed by BusinessLine, the IT department said that in 2,967 cases assets were seized and the records do not contain separate data for transactions made before and after Oct. 24.

Up to July 31, the IT department had issued notices in 3,175 cases amounting to Rs 19,222 crore. The assets were seized in 2,967 cases and are worth Rs 18,401 crore. In 125 cases, lawsuits were filed, the IT department said. According to the BusinessLine report, there is no clarity on the number of these cases prior to October 24.

In 2016, an amendment under the Benami Dealings Prohibition Act 1988 was made to allow the retroactive conduct of criminal prosecutions. On August 23, however, the Supreme Court said the law’s provisions cannot be applied retroactively to transactions entered into before October 25, 2016.

The report quotes Ashish K Singh, managing partner of Capstone Legal, as saying that once the provision has been declared unconstitutional, there is no further room for interpretation left to the department.

“If the lawsuit proceeds unlawfully, the aggrieved person has the right to go to the constitutional courts to seek redress,” Singh told BusinessLine.

The Supreme Court struck down section 3(2) of the law which provided for a three-year prison sentence for those who entered into transactions with Benami between September 5, 1988 and October 25, 2016. The provision could earlier put someone behind bars for a deal they made 28 years ago.