Procedure followed by the authority once the Initiating Officer (IO) get information about Benami Property

The procedure followed by the authority once the Initiating Officer (IO) get information about benami property are-

First Step:

(i)   ISSUE OF SHOW CAUSE NOTICE BY INITIATING OFFICER WHERE HE HAS REASON TO BELIEVE THAT ANY PERSON IS A BENAMIDAR IN RESPECT OF A PROPERTY.

If an Initiating Officer (IO), on the basis of material in his possession, has a reason to believe that a particular person is a benamidar with respect to a property, he may issue a show cause notice (SCN) to the said person in that regard for treating such property as benami property.

(ii)   Copy of SCN to beneficial owner also.

(iii)  PROVISIONAL ATTACHMENT OF PROPERTY IF NECESSARY -

Initiating Officer to pass order with a period of 90 days from issue of SCN. [Powers to Provisionally attach the benemi property for 90 days]. Order in writing and after getting privious approval from Approving Authority.

(iv)  Initiating Officer (IO) may continue the provisional attachment or revoke the attachment, if property is already attached. He may provisionally attach the property or decide not to attach the property at all. Revoke provisional attachment if satisfied the property is not benami.

(v)   Continuing provisional attachment or ordering provisional attachment where not satisfied that property is not benami and refer a statement of case to Adjudicating Authority.

(vi)  All actions of Initiating Officer (IO) – only after prior approval of Approving Authority.

Second Step: Adjudication

(i)   Initiating Officer (IO) to draw a statement of the case and refer it to the Adjudicating Authority (AA) once he passes an order having the effect of provisional attachment of the benami property.

(ii)  WHERE ADJUDICATION ORDER HOLDS PROPERTY AS BENAMI OR NOT

       Adjudicating Authority to hear affected persons and pass order holding that property is benami or not. If held benami property then pass confiscation order.

Third Step:

(i)   Adjudicating Authority (AA) to issue notice of hearing to all concerned within 30 days from the date of reference giving 30 days time to the affected parties to respond.

(ii)   Adjudicating Authority (AA) to pass order in one year from the date of receipt of reference by Initiating Officer (IO).

(iii)  Adjudicating Authority (AA) has powers of Enhancement also.

Fourth Step:

(i)    Adjudicating Authority (AA) to pass order holding the property to be benami property so as to be confiscated by Central Government.

(ii)   Rights of bonafide purchaser for adequate consideration prior to notice under section 24(1) without having knowledge of property being benami property are protected.

(iii)  No compensation to any tenant etc.

(iv)  Rights to defeat the provisions of law shall be null and viod.

Fifth Step:

Administrator to take possession of benami property and manage it.

Authorities and jurisdiction [Section 18]

18. (1) The following shall be the authorities for the purposes of this Act, namely:—

(a) the Initiating Officer;

(b) the Approving Authority;

(c) the Administrator; and

(d) the Adjudicating Authority.

(2) The authorities shall exercise all or any of the powers and perform all or any of the functions conferred on, or, assigned, as the case may be, to it under this Act or in accordance with such rules as may be prescribed.

Section 18 of the Act establishes four authorities who will be able to conduct inquiries regarding benami transactions:

S. No.	Name of Authority	Post of Authority	Responsibility
1.	Initiating Officer [IO]	Assistant Commissioner of Income-Tax (ACIT) or a Deputy Commissioner of Income-Tax (DCIT)	NOTICE AND ATTACHMENT OF PROPERTY Such officer shall have reason to believe on the basis of material available to him and shall record the reasons in writing. Thereafter, he shall issue a notice to the parties and after obtaining the replies, if he thinks so, he may provisionally attach the property with prior permission of the approving authority for a period not exceeding 90 days and he may also revoke the provisional attachment with prior permission of the approving authority. He shall have power to conduct enquiry in regard to person, place, property, document, bank etc
2.	Approving Authority	Additional Commissioner of Income-Tax (Addl. CIT) or a Joint Commissioner of Income-Tax (JCIT)	NOTICE TO FURNISH EVIDENCE The approving authority means an Additional Commissioner or a Joint Commissioner as defined in section 2 of the Income Tax Act, 1961. It shall have powers to give approval for retention of books of accounts and documents impounded within 15 days and will give permission to the initiating officer. He will also give permission or approval to the approving authority for his various actions like continuation of attachment, revocation of attachment, enquiry, investigation, etc.
3.	Administrator	Tax Recovery Officer/ Income Tax Officer (ITO)	POSSESSION AND MANAGEMENT OF PROPERTIES CONFISCATED He shall have the power to receive and manage the property, in relation to which an order of confiscation has been made. He is empowered to take such measures as are necessary for managing such property. He also has the powers to enforce possession by giving reasonable notice to the occupier of such property.
4.	Adjudicating Authority (Administrative as well                as legal)	Officers Drawn from Income Tax Department Officer in the grade of Commissioner of Income tax and a person of Indian Legal Service not below the rank of Joint Secretary	CONFISCATION AND VESTING OF PROPERTY This authority consisting of at least two members and one chairman will issue notice to the parties with 30 days from the date on which a reference has been received from the initiating officer. The authority may pass an order revoking or confirming attachment after holding that the property is Benami or not. Such order shall be passed within expiry of one year from the end of the month in which reference under this Act was received. This authority shall make an order for confiscation of the property after giving an opportunity of being heard to the person concerned.