With reference to the 'Prohibition of Benami Property Transactions Act, 1988 (PBPT Act)', consider the following statements: 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?

The correct answer is B. Only Statement 2 holds.

Statement 1 is wrong. A benami transaction is one where property is held by one person while consideration is provided by another, for the benefit of the latter. The owner's lack of knowledge is not an exception. The exemptions in Section 2(9)(A), as amended in 2016, cover cases such as property held by a karta for a Hindu undivided family or by a trustee in a fiduciary capacity, not an unaware owner.

Statement 2 is correct. Under the 2016 amendment (Section 27), benami property can be confiscated by the Government without compensation, after due process before the Adjudicating Authority. The original 1988 Act had no confiscation provision.

Statement 3 is wrong. The Act does provide an appellate mechanism: appeals lie to the Appellate Tribunal and then to the High Court. The Adjudicating Authority, Appellate Tribunal and Special Court were introduced by the 2016 amendment.

Core concept: the 2016 amendment that made the PBPT Act effective, with confiscation and a structured adjudication system. Mains link: black money, and the balance between enforcement and ease of doing business.

Trap: Aspirants read the 1988 text and miss the 2016 amendment, so they wrongly reject Statement 3 or accept Statement 1 on a vague idea of 'knowledge'.