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?
Explanation
Statement 1 is incorrect: Under the Prohibition of Benami Property Transactions Act, 1988, a transaction can still be considered a benami transaction even if the owner of the property is unaware of or denies knowledge of the ownership. The Act defines a benami transaction as one where the property is held by one person but paid for by another, irrespective of whether the ostensible owner is aware or not.
Statement 2 is correct: Benami properties are liable for confiscation by the government without compensation, as per Section 5 of the Act.
Statement 3 is incorrect: The Act establishes three authorities for investigation--Initiating Officer, Approving Authority, and Adjudicating Authority--but also provides for an appellate tribunal to handle disputes and appeals related to benami transactions.
For S1, Law punishes the structure of concealment, not the mental awareness of the benamidar. Hence likely false. For S3, UPSC loves to trap with negative absolutes like: "does not provide...", "only", "never" Think practically: Would any modern law not have an appellate mechanism? That would violate natural justice. Hence likely false too.