TaxTMI 
TaxTMI 
2020 (1) TMI 680
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....enalty of Rs. 24,23,16,56,765 (Rupees Two Thousand Four Hundred Twenty Three Crore Sixteen Lakhs Fifty Six Thousand Seven Hundred and Sixty Five only) to be recovered jointly and severally from the appellants and other noticees. 2. Shorn of all details, the facts leading to the filing of the present appeal is, that the appellants are directors in a company known as PACL Limited which was engaged in mobilizing funds from the general public by sponsoring various schemes which were none other than a Collective Investment Scheme and which were being carried out without obtaining a registration from SEBI as required under the SEBI Act, 1992. Pursuant to a show cause notice, SEBI issued directions under Section 11B of the SEBI Act dated 22.08.....
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....out obtaining registration under the SEBI Act. After considering the replies and, after hearing the parties, the AO passed an order dated September 22, 2015 imposing a penalty of Rs. 7,269,49,70,295/- to be paid by the appellants and other entities jointly and severally. The appellants including the company filed appeals before this Tribunal which was decided together by an order dated 27.10.2016. This Tribunal quashed the impugned orders passed by SEBI and directed to pass fresh orders on merits and in accordance with law after computing the profits, if any. 5. Pursuant to the order of this Tribunal the AO issued a fresh show cause notice dated 18.01.2017 alleging that the company and other appellants had mobilized fund to the tune of R....
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....the company was not a collective investment scheme. It was contended that even though the order of the High Court was set aside by the Supreme Court during interim period no interim order was passed and, therefore, the company and its directors bonafidely and validly collected the monies. The said collection of monies cannot be termed illegal nor can it be held that it to be an unlawful gain or that the appellants have made illegal profits. Attention was also invited to an order of the Delhi High Court wherein after considering the report, the Court allowed the company to execute the sale deeds in favour of the customers which fact was also not taken into consideration while passing the impugned order. The learned counsel contended that the....
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....enty-five crore rupees or three times the amount of profits made out of such practices, whichever is higher." A perusal of the aforesaid provisions indicates that penalty can be imposed where any person indulges in fraudulent and unfair trade practices relating to securities. The penalty shall not be less than five lakh rupees but may extend to twenty five crore rupees or three times the amount of profits made out of such unfair trade practices whichever is higher. In the instant case, SEBI found that a sum of Rs. 2686,25,54,797/- (Rupees Two Thousand Six Hundred Eighty Six Crore Twenty Five Lakh Four Thousand Seven Hundred and Ninety Seven only) was collected illegally under the scheme which was a collective investment scheme and since ....