The department issued the order last week under the provisions of the new Benami Property Transactions Act, 1988 that came into force on November 1 last year.
The department has identified four firms that allegedly took “accommodation (bogus) entries in the form of share capital” and purchased assets illegally.
The order, issued by the designated I-T authority under the act in Delhi, claimed that the “cash consideration for procurement of accommodation entries was provided by Satyender Jain”.
Jain, Delhi’s Minister for Health and other departments, has reportedly denied any wrongdoing and has said that he has no association with the said companies since July 2013 after he got a ticket from the AAP to contest the Assembly polls.
The order said the total accommodation entries received by these firms between 2010-2016 is Rs 13.68 crore and that it is “pertinent to note that these companies did not have any business activity during the period of funding so as to attract such huge funding in the form of share capital and share premium”.
Hundreds of bighas of land, allegedly purchased in and around Delhi by the said four firms, have been provisionally attached by the department under the new law.
The Benami Transactions Act carries a maximum punishment of upto 7 years rigorous imprisonment and a hefty penalty, and violators could also stand to be charged under the Income Tax Act, 1961.
An appeal against the provisional order issued by the tax department can be filed before the adjudicating authority under the said act within 90 days, a senior I-T official said, noting a copy of the order has been sent to Jain and the firms.
As per the act, the “Benamidar (in whose name benami property is standing), beneficiary (who actually paid consideration) and persons who abet and induce benami transactions are prosecutable and may get RI upto 7 years besides being liable to pay fine upto 25 per cent of fair market value of benami property”.
Also, “persons who furnish false information to authorities under the Benami Act are prosecutable and may be imprisoned upto 5 years besides being liable to pay fine upto 10 per cent of fair market value of benami property.”
The department has also made it clear that the benami property “may be attached and confiscated by the government” and that these actions are in “addition to actions under other laws such as the Income Act, 1961”.