IIM Indore’s Industry Interface Office in association with CropCraft and ICSI Indore Chapter organized a guest talk on ‘Contemporary Financial Acts’ on December 29, 2018. The speaker for the guest talk was Shri S. S. Rathore, Former Chief Commissioner, Income Tax, New Delhi.
Shri Rathore began his talk discussing the Benami Act and noted that the act- meaning without any name, is applicable to whole of the India, except Jammu and Kashmir. He also discussed the Benami jurisdictions and the difference between the old Benami Act 1988 and the PBTA 2016. ‘Previously, buying Benami Property was prohibited, however now after amendment, buying Benami Property is permitted—but taking benefit of the property is prohibited. Similarly, previously acquisition of property took place, however, now confiscation takes place. Lastly, in 1988, buying Benami Property led to imprisonment of 3 years with or without fine. But now, only if Benami Transaction is to defeat the provision of any law/avoid statuary dues/ avoid payment of creditors; then it leads to 7 years + 25% market value of property as fine. Also, abettor can be prosecuted’, said Shri Rathore, stating the differences.
Discussing why people would purchase Benami Property, he pointed some socio economic reasons as well. Shri Rathore said, ‘People used to buy Benami Property earlier to avoid the payment of harsh taxes during Mughal and British period. Also, this helped them in safe keeping the wealth from creditors—which could be later used in emergency. Some people were lucky enough to buy the property in their own name—and this concealed the family affairs from public/purdah system.’ Shri Rathore then also discussed about Black Money Act 2015, and Fugitive Offender Act 2018 and the offence and how is it punishable. He concluded the first session discussing about how to apply for Benami act and how the process has changed from 1988-2016.
The second session was quite interactive with discussions on topics like Fugitive Act—wherein the offender has undisclosed asset/income outside India, insolvency and bankruptcy in India. Sharing his view on Fugitive Act, Shri Rathore said that this may lead to 30% Tax+90% penalty, along with 10 years of imprisonment.
He also noted that India was in bad insolvency resolution before Insolvency and Bankruptcy Code (IBC) and the success rate for insolvency was just 25%. However, with the new code, resolving rate has increased—although some practical issues are yet to be resolved. The existing mechanism is still inadequate and ineffective. ‘With time, NPA of banks can be resolved in a better way by IBC—and that has already lead India in top 80 nations in ‘Ease of Doing Business’, he said.
The session was very interactive, with Shri Rathore answering the queries of all the participants after every slide in the presentation. Professor Abhishek Mishra, Faculty, IIM Indore and Chair, IIO along with Mr. Anurag Gangrade, Chairman, ICSI Indore Chapter also appreciated the efforts put in by the IIO Team in organizing the event successfully. The participants which included the students and faculty from IIM Indore and various other colleges, and also industrialists and CA and CS experts, were happy to meet Shri Rathore and thanked IIO for organizing the talk.