Income tax authorities have begun a multi-city crackdown against black money under the new stringent Benami law, having attached 42 properties worth crores of rupees and issued 87 notices over the last couple of days.
The I-T department has also sent notices to the famous Bhajiawala from Surat who was recently raided by the tax authorities, multiple accounts of an employee trust, a retired government official in Chandigarh for a flat, and deposits by an individual in multiple Jan Dhan accounts, under the new law, officials said.
“This is the first time we have used this law after it came into force three months back,” said a top I-T official. Use of the newly amended Benami Transactions (Prohibition) Act, 1988, against black money covering Delhi, Pune, Chennai, Chandigarh, Ahmedabad and Kolkata marks the next phase of crackdown on black money after demonetisation, officials said. I-T authorities said the government had given opportunities to evaders to come clean through two income disclosure schemes.
It had also put out public advertisements after November 8 demonetisation of Rs 500 and Rs 1,000 notes, strongly warning people against depositing unaccounted old currency in someone else’s bank account, saying such an act would attract charges under the new Benami Law. There had been reports of people using Jan Dhan accounts of dormant bank accounts to park their funds as also entering into property transactions in names of other individuals.
The I-T official quoted earlier said authorities are in the process of issuing more notices. He said the decision to slap stringent provisions of the new law were taken after analysing serious cases of blatant illegalities. Arrangements where a person deposited demonetised currency in the bank account of another person with an understanding that the account holder shall return his money in new currency are being treated as benami transaction under the law. The Benami Act empowers the taxman to confiscate and prosecute both the depositor and the person whose illegal money he or she has “adjusted” in bank accounts.
It attracts a heavy fine that could be as much 25% of the fair market value of the asset and rigorous jail term of up to seven years. The Benami Transaction (Prohibition) Act was first enacted in 1988, but it was not notified due to some infirmities. Rules under the law were never framed. The previous UPA government had introduced a Benami law in Parliament in 2011 but it lapsed with the dissolution of Lok Sabha.