DC issues order to prevent misuse of power of attorney
To check evasion of stamp duty and income tax worth crores of rupees per year during the sale of immovable properties through power of attorney, the district administration has now made it mandatory to disclose the current status of property’s possession and the financial transactions involved at the time of registration of such instruments.punjab Updated: Aug 12, 2012 01:31 IST
To check evasion of stamp duty and income tax worth crores of rupees per year during the sale of immovable properties through power of attorney, the district administration has now made it mandatory to disclose the current status of property’s possession and the financial transactions involved at the time of registration of such instruments.
The move has rattled a large section of property dealers, who have been minting huge profits by selling a single property many times, using the power of attorney instrument, causing a huge loss to the state exchequer.
Speaking to Hindustan Times here on Saturday, deputy commissioner Priyank Bharti said that the state government’s orders issued in 2007 on checking stamp duty evasion under the guise of property deals through power of attorneys were now ordered to be implemented in totality.
On August 25, 2010, taking a serious view of non-compliance of its orders, the department of revenue and rehabilitation had issued the same instructions again, asking the divisional commissioners and the deputy commissioners to take strict action against erring revenue officials for failure to comply with its orders.
The government communique had said that the instruments of power of attorney were being executed in large numbers to sell immovable property to evade the stamp duty. “In view of attempts by unscrupulous elements to defraud the state government of the revenue in a clandestine manner, it has been decided that the persons executing power of attorney, authorising to sell immovable property may be advised to specifically state in the power of attorney, as to whether the possession of the property has been handed over or not,” the letter read.
The department further instructed: “Such applicants may also be advised to state whether the power of attorney is being executed for some financial consideration or not. The omission of such a statement at the time of registering the power of attorney relating to authority to sell the immovable property will be considered as a lapse on the registering officers' part and they will be proceeded against for such lapses.”
Though these orders had been issued nearly five years back, the same were not implemented due to political pressure, sources said, adding that huge evasion of stamp duty and income tax running into crores of rupees was being carried out by a large section of the property dealers, allegedly under the patronage of local political leaders.
Sukhwinder Khanna, director, income tax (intelligence and criminal investigation), in his February 2, 2012 communiqué to Hoshiarpur DC, maintained that the registering officers were not providing details about financial transactions and permanent account number (PAN) of the parties involved in the sale of immovable properties. The income tax department had threatened to proceed against such revenue officials for not complying with the instructions.
“In view of the above instructions, it has been made mandatory to furnish financial transaction details of the seller as well as the buyer on a prescribed performa along with the power of attorney, which authorises a person to sell the property on behalf of its owner,” Bharti said. Meanwhile, chief parliamentary secretary (CPS) and BJP leader KD Bhandari has come in support of property dealers against Bharti’s orders.
Bhandari said that the decision to take declarations from sellers along with power of attorney was a retrogressive step and would badly affect the real-estate business. “A delegation of property dealers from the city had approached me few days back on this issue, after which I had taken up the issue with Bharti. He had assured that he would look into the matter after the independence day,” he said.
Bhupinder Singh Bhinda, a real estate businessman, said: “The decision to get the performa filled by sellers is not a good decision. The business scenario in the real estate business will be severely impacted. The DC should give us time before introducing the new practice," he said.
First Published: Aug 12, 2012 00:16 IST