Re: Immunity from proceedings under Prohibition of Benami Property Act.

Sir, where any matter, say Bogus Capital matter or a matter where benefit of DTAA with Mauritius not conferred whereby investment made by US Company through Mauritius Company, can such declaration under VsVs be at a later stage brought under Prohibition of Benami Act considering that Section 8 restricts immunity only in relation to the matter covered in the declaration? Your clarification on the issue will be highly appreciated.

The assessee under the DTVSVAct, 2020  is entitled to  settle his disputes in relation to the issues under question provide other conditions relating to filing of appeal in time , pendency thereof on the  specified date and the presence of tax arrear   are satisfied and he is not disentitled by S.  9 of the Act from filing a  declaration. 

Section 6 provides prohibits a designated authority from instituting any proceeding in respect fo an offence; or imposing or levying any penalty; or charging interest under the Income tax in respect of the tax arrear. Designated authority is defined by clause(e) of sub-section (1) of s. 2 to mean an officer not below the rank of the Commissioner of Income-tax. No immunity is provided u/s 6 from any proceeding under the other laws including under the PBPTA . S.8  further warns that nothing contained in the Act shall confer any benefit concession or immunity in relation to any proceedings other than those in relation to which the declaration is made. Needless to state that the declaration is made for the settlement of a dispute relating to the tax arrear and therefore the immunity is not available even under the Income tax Act  to any proceedings other than those in relation to which the declaration is made. 

Having noted the position in law, the assesse may examine the possibility to support his case under the PBPTA under sub-section(3) of s. 5 of the Act which prohibits the reopening of the matter under ‘any other law for the time being in force’. Even this immunity is restricted to cases of reopening and may not prevent an authority under the PBPTA to initiate the proceedings in future, as is feared by the assesse.

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