With reference to the ‘Prohibition of Benami Property Transactions Act, 1988 (PBPT Act)’, consider the following statements :
- 1.A property transaction is not treated as a benami transaction if the owner of the property is not aware of the transaction.
- 2.Properties held benami are liable for confiscation by the Government.
- 3.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 ?
Show answer
Answer: B. Statement 1 is wrong: under the 2016 amendment, a transaction where the owner is not aware of, or denies knowledge of, the ownership is itself a benami transaction. Statement 2 is correct: benami property is liable to confiscation by the Central Government. Statement 3 is wrong: the Act has four authorities (Initiating Officer, Approving Authority, Administrator, Adjudicating Authority) and an Appellate Tribunal. So 2 only.
Watch for: Watch for statement 1; it reverses the definition in Section 2(9).
Why the other options are wrong
- A. Wrong because the owner's lack of awareness makes it benami, not otherwise.
- C. Wrong because statements 1 and 3 are false.
- D. Wrong because the Act does provide an Appellate Tribunal.
Source to check: Prohibition of Benami Property Transactions Act, 1988 as amended by the Benami Transactions (Prohibition) Amendment Act, 2016, Sections 2(9), 18, 27 and 30 (incometaxindia.gov.in)
Answer from the official UPSC key. Written and fact-checked by AI against the official key. Spotted a mistake? Report it.