Text of Benami Transactions (Prohibition) Rules, 2019

KARACHI: The Federal Board of Revenue (FBR) has launched campaign to aware people about benami laws and harsh penalties under this law. Besides, the people are also informed about rewards to whistle blowers for pointing out benami properties.

The FBR launched the campaign after the introduction of benami transactions rules to enforce the benami act.

Following is the text of Benami Transactions (Prohibition) Rules, 2019.

S.R.O.326(1)/19 in exercise of the powers conferred by section 61 of the Benami Transaction (prohibition) Act 2017 the Federal Government is pleased to make the following rules, namely.

1. Short title and commencement

(1) These rules shall be called the Benami Transactions (Prohibition) Rules, 2019.

(2) This shall come into force at once.

2. Definitions.

(1) In these rules, unless there is anything repugnant in the subject or context,

(a) “Act” means the Benamui Transactions (prohibition) Act, 2017.

(b) “Chapter” means a Chapter of the Act, and

(c) “Section” means a section of the Act.

(2) Words and expressions used but not defined in these rules shall have the same meaning as assigned thereto in the Trusts Act, 1882 (II of 1882), the Succession Act, 1925 (XXXIX of 1925), the Partnership Act, 1932 (IX of 1932) the Income Tax Ordinance, 2001 (XLIX of 2001) The Anti money Laundering Act, 2010(VII of 2010) the Act and the Companies Act, 2017 (XIX of 2017).

3. Jurisdiction of Administrator, Initiating Officer and Approving Authority under sub-section (2) of section 15.

(1) the Board may, by an order assign any commissioner Inland Revenue to exercise the powers and perform the functions of approving authority under the provisions of the Act and these rules.

(2) the Board may, by an order, assign any Deputy Commissioner Inland Revenue to exercise the powers and perform the functions of Initiating Officer under the provision of the Act and these rules.

4. Determination of price in certain cases.

(1) For the purposes of sub-clause (b) of clause (15) of section 2, the price shall be determined in accordance with the provisions of section 68 of the Income Tax Ordinance, 2001 (XLIX of 2001)and rules made thereunder to the extent applicable under the Act.

5. Appointment of Chairperson and Members of Adjudicating Authority.

For the purposes of sub-section (4)of section 6, that Secretary Revenue Division shall forward to the Federal Government a panel of suitable officers who are qualified as per criteria provided for in sub-section (3) of section 6 and the Federal Government shall appoint from amongst the panel a Chairperson and as many Members as it may deem fit.

6. Terms and conditions of service of the Chairperson and members of the Adjudicating Authority.

For the purposes of sub-section (1) of section 10, the Chairperson and Members of the Adjudicating Authority shall respectively be entitled to the pay, allowances and other benefits, specified in column (3) of the Table below, namely.

1. Chairperson

(a) pay, allowances and other benefits admissible prior to his appointment under rule 5 or the pay.

(b) monthly adjudicating authority allowance of Rs 300,000.

2. Members

(a) pay and allowances admissible prior to their appointment under rule 5 or the pay, allowances, and the benefits admissible immediately before retirement.

(b) monthly adjudicating authority allowance of Rs. 200,000.

7. Provisional attachment. For the purposes of sub-section (3) of section 22, the Initiating Officer shall provisionally attach any property in the manner provided for in Part II and Part III of Chapter XVI of the Income Tax Rules, 2002 and to the extent applicable under the Act.

8. Confiscation of property under sub-section (1) of section 25. Where an order of confiscation of property under sub-section.

(1) of section 25 has been made, the Adjudicating Authority shall send a copy of the order to the Approving Authority.

(2) Where an order referred to in sub-rule (1) has been received by the Approving Authority in respect of any immovable property.

(a) forthwith direct the Administrator to proceed to take any or all steps mentioned in this sub-rule;

(b) issue notice to the concerned authority of the Federal Government or a provincial Government, or a local body or an authority or any person or officer who is responsible for recording the registration of any property or maintaining its record of ownership, as the case may be, having jurisdiction for the purposes of registration of such immovable property, intimating that the property has been confiscated under the Act.

(c) arrange to place copy of the notice at some conspicuous part of the immovable property for the benefit of general public mentioning clearly therein, in English and in vernacular language, that the property has been confiscated under the Act and vests absolutely in the Federal Government.

(3) Where an order referred to in sub-rule (1) has been received by the Approving Authority in respect of any movable property, he shall –

(a) forthwith direct the Administrator to proceed to take any or all steps mentioned in this sub-rule.

(b) forthwith issue a notice to the authority or person having the custody of such movable property informing that the property has been confiscated under the Act.

(c) sell the property, if the property is liable to speedy and natural decay or the expenses for maintenance are likely to exceed its value, with the written approval of the concerned Adjucating Authority and deposit the sale proceeds in the nearest Government Treasury of branch of the State Bank of Pakistan or Federal Treasury or in any branch of National Bank of Pakistan in fixed deposition and retain the receipt thereof:

Provided that where owner of the property furnishes the fixed deposit receipt of State Bank of Pakistan or Federal Treasury or National Bank of Pakistan equivalent to the value of property in the name of Administrator, the Approving Authority may accept and retain such fixed deposit receipt as security.

Provided further that where the movable property is a mode of conveyance of any description, the Approving Authority, after obtaining its valuation report from the Motor Licensing Authority or any other authority, as the case may be, may accept and retain the fixed deposit receipt of the National Bank of Pakistan, equivalent to the movable property as security in the name of Administrator:

(d) cause to deposit the property consisting of cash, Government or other securities or bullion or jewellery or other valuables in a locker in the name of the Administrator or in the form of fixed deposit, as the case may be, in the State Bank of Pakistan or in any branch of the National Bank of Pakistan, and retain the receipt thereof;

(e) cause to get the property in the form of shares, debentures, sum of collective investment schemes or instruments to be transferred in favour of Administrator.

(f) Issued a direction to the bank or financial institution, as the case may be, to transfer and credit the money to the account of the administrator where the property is in the form of cash in a bank or a financial institution.

9. Received of confiscated property under sub-section (1) of section 26.

(1) The administrator shall, at the tine of receiving the confiscated property, ensure proper identification of such property with reference to its particulars mentioned in the order made under sub-section (1) of section 22.

(2) The Administrator may, with approval to the Approving Authority establish one or more warehouses for safe keeping of attached and confiscated movable properties.

10. Management of confiscated property under sub-section (1) of section 26.

(1) Where the property confiscated is of such a nature that its removal from the place of attachment is impracticable or its removal involves expenditure out of proportion to the value of the property, the Administrator shall arrange for proper maintenance and custody of the property at the place of its attachment.

(2) If the property confiscated consists of cash, Government or other securities, bullion, jewellery or other valuables, the administrator shall cause to deposit them for safe custody in the nearest Government Treasury or a branch of the National Bank of Pakistan or the State Bank of Pakistan.

(3) The Administrator shall maintain a register for recording details in respect of moveable property such as cash, Government’s or other securities, bullion, jewellery or other valuables in the form as specified in part -1 of the first schedule to these rules .

(4) The Administrator shall obtain and receive from the Treasury or the bank, as the case may be, against the deposit of moveable properties specified in sub -rule (2).

(5) The Administrator shall maintain in respect of immovable property a register containing the detail in the form as specified in part -II of the First Schedule to these rules.

11. Disposal of confiscated property under sub-section (3) of section 26.

Where the Federal Government directs that the property vested in it under sub-section (3) of section 25 be disposed of under sub-section (3) of section 26, the Administrator shall arrange to dispose of the property in the manner as provided in Part II and Part III of Chapter XVI of the Income Tax Rules, 2002 to the extent applicable under the Act.

12. Appeals to the Federal Appellate Tribunal.

(1) An appeal to the Federal Appellate Tribunal under sub-section (1) of section 44 shall be filed in the form as specified in Part-III of the First Schedule to these rules.

(2) The form under sub-rule (1) shall be accompanied by a fee of one thousand Rupees.

(3) The form under sub-rule (1) shall set forth concisely and under distinct head the grounds of objection to the order appealed against and such grounds shall be numbered consecutively and shall specify the address of service at which notice or other processes of the Federal Appellate Tribunal May be served on the appellant and the date on which the order appealed against was served on the appellant.

(4) Where the appeal is preferred after expiry of the period of forty-five days referred to in sub-section (1) of section 44, it shall be accompanied by a petition, in quadruplicate, duly verified and supported by the documents, if any relied upon by the appellant, showing cause as to how the appellant had been prevented from preferring the appeal with in the period of forty-five days.

13. Terms and Conditions of service of the chairperson and members of Federal Appellate Tribunal.

(1) For the purposes of sub-section (1) of section 31 of the Act, the Chairperson and Members of the Federal Appellate Tribunal shall respectively be entitled to the pay, allowance and other benefits specified in column (3) of the table.

1. Chairperson: (a) pay, allowances and other benefits admissible prior to his appointment as chairperson , or pay allowances and benefits admissible immediately before his retirement.

(b) Monthly Federal Appellate Tribunal allowance of Rs. 400,000.

2. Members: (a) Pay, allowances and other benefits admissible prior to their appointment as Member or pay, allowances and other benefits admissible immediately before their retirement.

(b) Monthly Federal Appellate Tribunal allowance of Rs. 300,000.

14. Removal of Chairperson and Members from office in certain circumstances.

(1) For the purpose of sub-section (2)of section 33, the secretary Law and Justice Division , in pursuance of approval of the Federal Government shall file a reference before the Chief Justice of the High Court for inquiry, against the Chairperson and Members, whether or not suspended, on charges as specified under sub-section (1)of section 33 of the Act.

(2) The references under sub-rule (1)shall be filed before the Chief Justice in whose territorial jurisdiction the Chairperson and Members of the bench, whether or not suspended, are seated.

(3) The Chief Justice of High Court after receipt of the reference filed, shall inform the Chairperson and the Members, whether or not suspended, of the charges leveled against them and seek their written defense. The Chief Justice of the High Court may seek further explanations and may hear in person the Chairperson and the Members before submission of the inquiry report.

(4) The Chief Justice of High Court shall conclude the inquiry and transmit a report thereon the Federal Government, through Secretary, Law and Justice Division, within sixty days from the receipt of the reference.

15. Staff of Appellate Tribunal.

(1) For the purpose of sub-section (3)of section 37 of the Act, the officers and employees of the Federal Appellate Tribunal shall be entitled to such salaries and allowances as civil servants of the Federal Government of the same basic pay scales and status are entitled to.

16. Reward for Whistleblowers.

(1) For the purpose of reward, the provisions of the Inland Revenue Reward Rules, 2016 except as specified in these rules shall mutatis mutandis apply.

(2)The amount of reward as specified below relating to detection and confiscation of benami property to the extent specified below, shall be admissible.

1. Rs.2000,000 or less — Five percent of the price of benemi property.

2. More than Rs.2,000,000 but not more than Rs.5000,000, — Rs.100,000 plus four percent of the price of benami property in excess of Rs.2,000,000.

3. Over Rs.5,000,000 — Rs.220,000 plus three percent of the price of benami property in excess of Rs.5,000,000.

(3) The amount of reward shall be sanctioned after confiscation of the benami property under section 25.

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