2015 (4) TMI 1217 - AT - FEMA

Tribunal allows appeal, sets aside Competent Authority's order, releases properties from forfeiture. Stay petition disposed.

The Tribunal allowed the appeal, setting aside the Competent Authority's order and releasing the properties from forfeiture. The stay petition became ... Forfeiture under SAFEMA - Production of additional evidence before the Tribunal under the ATFP/SAFEMA rules (Rule 15) - Reasonable opportunity to adduce evidence - Verification of documentary evidence by the investigating agency / competent authorityProduction of additional evidence before the Tribunal under the ATFP/SAFEMA rules (Rule 15) - Reasonable opportunity to adduce evidence - Admissibility of additional documentary evidence filed by the appellants before the Tribunal - HELD THAT: - The Tribunal examined applications for admission of additional evidence filed after the Competent Authority's order and, having given the respondent opportunity to verify the documents, found the appellants' explanation for non-production before the Competent Authority to be genuine. The record showed the respondent itself had caused verification of the documents with concerned cooperative societies and accepted their genuineness. Applying Rule 15 of the ATFP (Procedure) Rules, the Tribunal concluded that the Competent Authority had decided the case without giving a reasonable opportunity to the appellants to produce all relevant evidence and therefore allowed the miscellaneous applications and took the additional documents on record. [Paras 11, 12, 15]Applications for production of additional evidence allowed and the additional documents taken on record.Forfeiture under SAFEMA - Verification of documentary evidence by the investigating agency / competent authority - Whether the properties and sums forfeited by the Competent Authority were rightly forfeitable under SAFEMA or were acquired from legitimate and legal sources - HELD THAT: - After admitting the additional evidence and on verification by the respondent, the Tribunal found that the appellants had produced documents-sale deeds, income and salary certificates, cooperative society records, GPF withdrawals, bank statements and certificates-sufficient to establish that the impugned immovable and movable properties had been acquired from known and legal sources. The respondent's inquiries and verifications supported the genuineness of several documents and the declared sources (agricultural income, government service savings, remittances from overseas business). In view of these findings, the Tribunal held the properties could not be lawfully forfeited under the Act and set aside the forfeiture order in respect of the properties identified in the appeal. [Paras 13, 16]Appeal allowed; impugned forfeiture order set aside and the listed properties released from forfeiture.Final Conclusion: The Tribunal allowed the appellants' applications for additional evidence, accepted the verified documentary proof of legal sources for the impugned properties, set aside the Competent Authority's forfeiture order in respect of those properties and released them from forfeiture; no order as to costs. Issues Involved:1. Validity of the detention order under COFEPOSA.2. Legitimacy of the forfeiture of properties under SAFEMA.3. Admissibility of additional evidence.4. Justification for the forfeiture of specific properties.Issue-wise Detailed Analysis:1. Validity of the Detention Order under COFEPOSA:The detention order dated 18th November 2006, issued against AP-1 by the Government of Maharashtra under Section 3(1) of the COFEPOSA Act, 1974, was neither revoked by the Government nor quashed by any competent Court. This held AP-1 to be a person covered under Section 2(2)(b) of SAFEMA. The appellants argued that the detention order was revoked on 20th February 2008, under Section 21 of the General Clauses Act, and the Competent Authority was informed, but the show cause notice was still issued.2. Legitimacy of the Forfeiture of Properties under SAFEMA:The Competent Authority issued a show cause notice on 2nd April 2008, proposing to forfeit nine immovable and nine movable properties held by the appellants. After considering submissions, the Competent Authority released most properties but ordered the forfeiture of specific properties. The appellants contended that the properties were acquired through legal means, including inheritance and income from legitimate sources.3. Admissibility of Additional Evidence:The appellants filed additional evidence to support their claims that the properties were acquired legally. The Competent Authority initially did not consider these documents, leading to the appeal. The Tribunal allowed the submission of additional evidence, including affidavits, bank passbooks, agricultural sale bills, and certificates indicating income from various sources. The Tribunal noted that the Competent Authority decided the case without giving reasonable opportunity to the appellants to produce all evidence.4. Justification for the Forfeiture of Specific Properties:The Tribunal examined the legitimacy of the forfeited properties:- Agricultural Land at Survey No. 250: Purchased by the appellants' father in 1982 for Rs. 6,999/-. The Tribunal accepted that the father, an agriculturist owning 35,513 sq. meters of land, could have funded this purchase.- Agricultural Land at Survey Nos. 19, 107A, 149, 156: Acquired by AP-3, a government employee, with savings from his salary and agricultural income. The Tribunal found the purchase of these properties legitimate.- Agricultural Land at Survey No. 62: Acquired by AP-2 in 1989 for Rs. 19,999/-. The Tribunal accepted the income tax assessment orders showing an average annual income of Rs. 17,000/- from agriculture.- Movable Properties (Bank Deposits and FDRs): The Tribunal accepted the appellants' claims of legitimate income from business, agriculture, and remittances from abroad. The evidence included bank statements, certificates from cooperative societies, and income from selling milk and crops.The Tribunal concluded that the additional evidence supported the appellants' claims of legal acquisition of the forfeited properties. Consequently, the Tribunal allowed the appeal, setting aside the Competent Authority's order and releasing the properties from forfeiture.Conclusion:The Tribunal allowed the appeal, setting aside the Competent Authority's order and releasing the properties from forfeiture. The stay petition became infructuous and was disposed of. No order relating to costs was made.