TaxTMI 
TaxTMI 
2019 (2) TMI 882
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....d following action:- (i) Conducted search on12.02.2017 at the residential premises of the appellant where nothing incriminating was recovered; (ii) Issued Summons dated 13.02.2017 directing the appellant to appear on 14.02.2017 for recording his statement; (iii) Conducted search on 18.05.2017 at the official premises of the appellant and seized 59 files, 1 laptop, 3 hard disks and Rs. 6 lakhs. (iv) Issued Summons dated 18.05.2017 directing the appellant to appear on 19.05.2017 for recording of his statement; (v) Arrested the appellant on 22.05.2017 3. The appellant was granted bail on 4.9.2017 by the Special Court (PMLA), New Delhi. 4. It is the case of respondent that on investigation conducted, it was revealed that there was infusion of cash from M/s. Jagat Projects Ltd. into bank accounts of entities controlled by Jain Brothers as reflected in the bank accounts of these entities. The Income Tax assessing officer vide Assessment Order dated 28.03.2013, has recorded a finding that M/s. Jagat Projects Ltd had laundered its unaccounted income through a set of companies controlled by Jain Brothers in the guise of share subscription m....
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....eason to suspect that such records or proceeds of crime are kept; (b) break open the lock of any door, box, locker, safe, almirah or other receptacle for exercising the powers conferred by clause (a) where the keys thereof are not available; (c) seize any record or property found as a result of such search; (d) place marks of identification on such record or [property, if required or] make or cause to be made extracts or copies therefrom; (e) make a note or an inventory of such record or property; (f) examine on oath any person, who is found to be in possession or control of any record or property, in respect of all matters relevant for the purposes of any investigation under this Act: [Provided that no search shall be conducted unless, in relation to the scheduled offence, a report has been forwarded to a Magistrate under section 157 of the Code of Criminal Procedure, 1973 (2 of 1974), or a complaint has been filed by a person, authorised to investigate the offence mentioned in the Schedule, before a Magistrate or court for taking cognizance of the scheduled offence, as the case may be, or in cases where such report is not requ....
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....n (1A), before the Adjudicating Authority.]. 10. Sub-section (1), (2) and (3) of Section 20 also read as under:- 20. Retention of property.- (1) Where any property has been seized under section 17 or section 18 or frozen under sub-Section (1A) of Section 17 and the officer authorised by the Director in this behalf has, on the basis of material in his possession, reason to believe (the reason for such belief to be recorded by him in writing) that such property is required to be retained for the purposes of adjudication under section 8, such property may, if seized be retained or if frozen, may continue to remain frozen, for a period not exceeding one hundred and eighty days from the day on which such property was seized or frozen, as the case may be. (2) The officer authorized by the Director shall, immediately after he has passed an order for retention or continuation of freezing of the property for purposes of adjudication under section 8, forward a copy of the order along with the material in his possession, referred to in subsection (1), to the Adjudicating Authority, in a sealed cover, in the manner as may be prescribed and such Adjudicating Author....
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....d. 17. To retain such property for the purpose of proceeding under section 8 of the Act, the learned counsel appeared on behalf of the appellant has argued that the impugned order is totally contrary to the law passed by the adjudicating authority as due process has not been followed by the ED, which is mandated under section 20 of the Act. After the retention of the property, the respondent has not passed an order for retention or confirmation of freezing of the property for purposes of adjudication under section 8 of the Act. Rule 3 of 'The Prevention of Money-laundering (The manner of forwarding a copy of the order of retention of seized property along with the material to the Adjudicating Authority and the period of its retention) Rules, 2005 mandates for the same, which reads as under:- "3. Manner of forwarding the copy of the order of retention of seized property along with the material to the Adjudicating Authority.- (1) The authorized officer shall prepare the index of the copy of the order of retention of the seized property and the material and sign each page of such index of the copy of the order and the material and shall also write a letter while forwarding....