About Rs 4,300 crore worth of benami properties have reportedly been attached thus far, after the refurbished Prohibition of Benami Properties Act came into effect on 1 November 2016.
Jaipur and Mumbai have been bestowed with the dubious honour of topping the list but it is still a work in progress, what with the revelations thus far being just the tip of the iceberg.
The CBDT is the investigating and prosecuting agency under the Benami law but in the absence of an adjudicating authority under the Benami law, the burden is currently being borne by the adjudicating authority under the Prevention of Money Laundering Act (PMLA).
It has so far upheld 100 attachments, which means the government can now confiscate these properties without compensation, besides sending the violators to jail for anything between one to seven years and extracting a penalty of up to 25 percent of the value of the properties confiscated. So far so good.
The modus operandi seems to be either hush-hush or exerting undue influence. Under the first category, properties are held benami by their beneficial owners in the name of shell companies. On 5 September 2017, the government froze the bank accounts of some 2.09 lakh such companies. One expects a rich haul from this effort at the end of the day.
The second consists of high handed employers using their minions as their cats’ paw. To wit, in one case in Jabalpur, a driver was found to be the benamidar. He owned land worth Rs 77 million. The beneficial owner was the employer of the driver, a Madhya Pradesh-based listed company. It is an open secret that in India, often, employers treat their employees as their minions especially in family-owned and controlled companies. Small wonder, they practice the Sicilian practice of omerta and protect their employers through thick and thin including safekeeping of their ill-gotten wealth at considerable personal risks.
During the agonising days of demonetisation, many employees grit their teeth and stood in serpentine queues to deposit in their own accounts cash in the demonetised 500 and 1000 rupee notes belonging to their employers.
While bankers, jewellers, government officials and politicians are said to be under the taxman’s radar, very little is tumbling out of politicians’ cupboards.
To be sure, the Election Commission (EC) extracts the property details of those contesting elections under an affidavit These are promptly passed on to the CBDT as well but the futility of this exercise is no politician declares his/her benami properties to the EC. Nobody puts his/her head on the chopping block.
If a mind-boggling increase in assets during the short interval of five years between two elections can raise eyebrows, imagine the effect if and when properties held benami are revealed.
Unfortunately politicians are shielded by the income tax law that states its investigations and progress in assessment are not for public consumption. RTI doesn’t generally apply to income tax matters.
There is a sinking feeling even among Modi supporters that the Modi government is going soft on politicians in the sobering realisation that if it stirs the hornet’s nest, some of its own members and allies could be stung. Chagan Bhujbal of the NCP is the only politician whose name surfaced in the context of proceedings under the benami law.
The Modi government preens itself on its track record of a crack down on black money and tax evasion. It seems to be willing to hit but unwilling to hurt the political class.
Agricultural income continues to provide the perfect camouflage and foil for granting immunity from taxation for their ill-gotten wealth. In the event, while Rs 4,300 crore of benami property unearthed so far might be trumpeted as a good beginning, it is just the tip of the iceberg.
Businessmen and industrialists are easy targets but politicians, while being easy to malign, are difficult to proceed against.
Is this a conspiracy of silence?
(The author is a senior columnist and tweets @smurlidharan)
Updated Date: Jun 26, 2018 20:42 PM