TaxTMI 
TaxTMI 
2023 (7) TMI 1440
X X X X Extracts X X X X
X X X X Extracts X X X X
....d. and a sum of Rs. 20 lakh on Brij Kishore Sabharwal who is a director in the company. 2. The facts leading of the filing of the present appeal is, that the company made six preferential allotments during the period June 2013 to August 2013. Necessary disclosure on the stock exchange platform was made by the company. Subsequently, an investigation was made and the stock exchange submitted the report indicating possibility of the mis-utilization of the proceeds in 2016. Based on this report, SEBI carried further investigation in 2019. The AO was appointed in December 2022 and the show cause notice was issued on January 5, 2023. 3. The show cause notice alleged that there was deviation from the object of the issue and, therefore, the a....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., there is an inordinate delay in the issuance of the show cause notice. The preferential issue was made in August 2013 and the show cause notice was issued on January 5, 2023. The issuance of the preferential issue was known to the stock exchange as well as to SEBI and, therefore, there is no justification for issuance of show cause notice at this belated stage. 8. In Ashlesh Gunvantbhai Shah vs. SEBI Appeal No. 169 of 2019 alongwith connected appeals decided on January 31, 2020, this Tribunal held :- "12. Having considered the matter we are of the view that there has been an inordinate delay on the part of the respondent in initiating proceedings against the appellants for the alleged violations. The controversy in this regard....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd upon the facts and circumstances of the case, nature of the default/statute, prejudice caused, whether the third-party rights had been created etc. 13. Similar view was again relied in Ashok Shivlal Rupani & Ors. vs. SEBI (Appeal No. 417 of 2018 along with other connected appeals decided on August 22, 2019) and again in Sanjay Jethalal Soni & Ors. vs. SEBI in Appeal No. 102 of 2019 and other connected appeals decided on November 14 2019. 14. We also find that in the case of Ashok Shivlal Rupani (supra) the period of investigation was January 4, 2010 to January 10, 2011 in the scrip of M/s. Oregon Commercial Ltd. and the show cause notice issued on November 20 2017 which this Tribunal held that there was an inordinate de....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l 20, 2012 was issued for the violation found during the investigated period March 1, 2009 to November 30, 2009. The respondents thereafter waited for another five years to issue a second show cause notice dated July 20, 2017 for the investigated period April 1, 2010 to January 10, 2011 which had been investigated in September 2011. We find that the respondents were aware of the alleged violation and thus there is no justification for waiting for more than five years to issue the second show cause notice dated July 20 2017. In our view there is an inordinate delay in initiating the proceedings." 10. In view of the aforesaid decisions, we are of the opinion that the impugned order in so far as it relates to the appellants cannot be sustai....