For benami property cases, ED may get adjudicating authority

After waiting for nearly one-and-half years, the Enforcement Directorate (ED) is likely to soon get an adjudicating authority mandated for ED under the Prohibition of Benami Property Transactions Act (BPTA), 2016, sources close to the directorate said. Currently, the ED is working under an ad-hoc arrangement and the government has outsourced the task of handling adjudication work (validation of benami properties) to an already staff crunched adjudicating authority functioning under the Prevention of Money Laundering Act (PMLA), another stringent law enforced by ED.

The provision for an independent three-member adjudicating authority (like the one for Prevention of Money Laundering Act), with a role to decide on the attachment of properties, was made under the Prohibition of Benami Property Transactions Act (BPTA), 2016.

The BPTA that was originally enacted in 1988 was revived and introduced by the Narendra Modi government from 1 November 2016.

A source in ED told The Sunday Guardian: “The long wait for the adjudicating authority is going to be end soon as, realising the urgent need of an independent adjudicating body that will carry forward the Centre’s war against black money to its conclusion, the Ministry of Finance has started working on the road map for its appointment.”

‘The process for formation of an adjudicating authority might take a few more months and is likely to get operational by the end of this year,” the source said.

The BPTA mandates that every benami property case is heard and decided by a three-member bench within one year of the date of attachment of the property and the members of the adjudicating authority can be a person who has been a commissioner-rank officer in the I-T department or has held the post of joint secretary in the Ministry of Law and Justice and belongs to the Indian Legal Services.

A senior ED official said: “A set of reforms introduced by the incumbent central government has provided the teeth to the ED, but in the absence of an adjudicating authority, the directorate’s work goes waste as assets attached by the directorate worth crores of rupees may stand invalidated in a court of law.”

Official ED records show that over 860 cases have been finalised by the Income Tax department and sent to the ED’s ad-hoc adjudicating authority till now, but only about 80 cases could be adjudicated, leaving a pendency of about 780 cases involving attachments of assets worth crores of rupees.

According to sources, before the 2019 general elections, multiple investigative agencies are going to get tough against black money hoarders and the role of the ED will become crucial.

After coming to power, the Narendra Modi government has taken many steps to counter the menace of black money in the country. The Centre enacted the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. The government had also provided a window for one-time compliance — between 1 July and 30 September 2015 — for taxpayers to declare their undisclosed foreign assets.