TaxTMI 
TaxTMI 
2025 (8) TMI 410
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....n of Section 6(3)(i) of the Foreign Exchange Management Act, 1999 (FEMA) read with Regulation 3(a) of the Foreign Exchange Management (Acquisition and Transfer of Immovable Property in India) Regulations, 2000. This Tribunal vide Order dated 20.03.2018 had disposed of the application for the waiver of the pre-deposit of the penalty amount by directing the Appellant to deposit a sum of 25% of the penalty amount within six weeks from the date of the Order. The order-sheet dated 15.07.2019 of this Tribunal shows that the Counsel for the Appellant complied with the Order and deposited 25% of the total penalty amount for which the proof was shown to the Respondent who sought time to verify the same. 2. Ld. Counsel for the Appellant challenged the Impugned Order on the ground that the same is reiteration of the Order in Original and the Impugned Order failed to dispose of the grounds taken by the Appellant for filing the Appeal before the Special Director Appeals. Ld. Counsel for the Appellant submitted that the Appellant is a permanent resident of India since May 2012 and has physically handicapped minor daughter, minor son and his wife in his family. The Appellant is the sole earnin....
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.... arranged funds for that purchase. He also mentioned that his wife had never been NRI in Saudi Arabia or any other country and has always been a bonafide citizen of India. Ld. Counsel stated that the purchase was made out of the lawful earnings of the Appellant. 5. Ld. Counsel for the Appellant contended that the definition of a person resident in India as given u/s 2(v) of FEMA has been cast in terms of the intention of the person. While the Appellant may not have stayed in India for 182 days in the preceding financial year of his final return to India in May, 2012, he is to be regarded as person resident in India in terms of clause B of the Section 2(v)(i) since the Appellant returned to India permanently and set up his business here. Ld. Counsel for the Appellant further argued that it is clear from the facts of the case that the Appellant had no intention to contravene the provisions of FEMA. In fact, except for the agricultural property which was purchased in the name of his wife, there is no other property against which contravention of the provisions of FEMA has been invoked. He, therefore, pleaded that no penalty could have been imposed in the absence of mens rea in the ....
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....rve Bank of India, Foreign Exchange Department, Central Office Mumbai issued Notification No. FEMA 21 (R)/2018 - RB on 26.03.2018 in exercise of the powers conferred by clause (i) of sub-section (3) of Section 6 r/w sub-section 2 of Section 47 of FEMA. The said Notification was issued in supersession of Notification No. FEMA 21/2000-RB dated 03.05.2000, as amended from time to time. The Notification dated 26.03.2018 states the following as Regulation 3: "3. Acquisition and Transfer of Property in India by a Non-Resident Indian or an Overseas Citizen of India:- An NRI or an OCI may (a) acquire immovable property in India other than agricultural land/ farm house/ plantation property: Provided that the consideration, if any, for transfer, shall be made out of (i) funds received in India through banking channels by way of inward remittance from any place outside India or (ii) funds held in any non- resident account maintained in accordance with the provisions of the Act, rules or regulations framed thereunder. Provided further that no payment for any transfer of immovable property shall be made either by traveler's cheque or by foreign curre....
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....on resident outside India; (d) any borrowing or lending in foreign exchange in whatever form or by whatever name called; (e) any borrowing or lending in rupees in whatever form or by whatever name called between a person resident in India and a person resident outside India; (f) deposits between persons resident in India and persons resident outside India; (g) export, import or holding of currency or currency notes; (h) transfer of immovable property outside India, other than a lease not exceeding five years, by a person resident in India; (i) acquisition or transfer of immovable property in India, other than a lease not exceeding five years, by a person resident outside India; (j) giving of a guarantee or surety in respect of any debt, obligation or other liability incurred- (i) by a person resident in India and owed to a person resident outside India; or (ii) by a person resident outside India‖. The provision quoted above was omitted by the Act of 20 of 2015 w.e.f. 15.10.2019. ................... 30. The next question is in reference to the provisions of Section 6(3)(b) and Re....
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....r) issued under the provisions re-enacted, continue in force, and be deemed to have been (made or) issued under the provisions so re-enacted, unless and until it is superseded by any (appointment, notification), order scheme, rule form or bye-law (made or) issued under the provisions so re-enacted (and when any (Central Act) or Regulation, which, by a notification under section 5 or 5-A of the Scheduled District Act, 1874 (XIV of 1974), or any like law, has been extended to any local area, has by a subsequent notification, been withdrawn from any re-extended to such area or any part thereof, the provisions of such Act or Regulation shall be deemed to have been repealed and re-enacted in such area or part within the meaning of this section)". 31. The issue in reference to the provisions quoted above were analysed by the Apex Court in the case of Fibre Boards Pvt. Ltd. (supra) where earlier judgment of the Apex Court in the case of Rayala Corporation (P) Ltd. & Anr. Vs. Directorate of Enforcement (1969)2SCC 412 and also the judgment in the case of Kolhapur Cane Sugar Works Ltd. (supra) were considered. The relevant paras 19 to 35 of the judgment (supra) are quoted hereunder ....
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....to be an order made under the re-enacted provisions. The question, therefore, is whether the provisions of the repealed Section 10(2)(xi), under which the bad debts were written off as irrecoverable in the books of the assessee, are in terms re-enacted by the repealing Act. A comparative table furnished in The Law and Practice of Income Tax, Kanga and Palkhivala (7th edn., volume II) shows that Section 10(2)(xi) of the 1922 Act is equivalent to Sections 36(1)(vii), 36(2) and 41(4) of the 1961 Act. The repealed Section 10(2)(xi) is thus a composite section containing the ingredients of the re-enacted Sections 36(1)(vii), 36(2) and 41(4). Consequently when a debt is written off by an order in terms of Section 10(2)(xi) of the 1922 Act, the Income Tax Officer exercises the same power as he would have exercised on the enactment of Section 36(1)(vii) of the 1961 Act. These two provisions are, therefore, consistent with each other. Section 36(1)(vii) is subject to the provisions of sub-section (2) of that section. Therefore, both Sections 36(1)(vii) and 36(2) of the 1961 Act, being two of the ingredients of Section 10(2)(xi) of the 1922 Act, must be read together with reference to an ord....
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....repeal with regard to actions taken under the repealed Act. If the legislature had intended not to apply the provisions of Section 24 of the General Clauses Act to the 1988 Act, it would have specifically so provided under the enacted law. In the light of the fact that Section 24 of the General Clauses Act is specifically applicable to the repealing and re-enacting statute, its exclusion has to be specific and cannot be inferred by twisting the language of the enactments. Accepting the contention of the learned counsel for the respondents would render the provisions of the 1988 Act redundant inasmuch as appointments, notifications, orders, schemes, rules, bye-laws made or issued under the repealed Act would be deemed to be non-existent making impossible the working of the re-enacted law impossible. The provisions of the 1988 Act are required to be understood and interpreted in the light of the provisions of the General Clauses Act including Sections 6 and 24 thereof." (at paras 7 and 23). 22. On a reading of Section 24 together with what has been stated by this Court above, it becomes difficult to accept Shri Arijit Prasad's contention that Section 24 would only apply to n....
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....ht to be prosecuted for an offence punishable under an Act on the repeal of which Section 6 of the General Clauses Act had been made applicable. In the case before us, Section 6 of the General Clauses Act cannot obviously apply on the omission of Rule 132-A of the DIRs for the two obvious reasons that Section 6 only applies to repeals and not to omissions, and applies when the repeal is of a Central Act or Regulation and not of a rule. If Section 6 of the General Clauses Act had been applied, no doubt this complaint against the two accused for the offence punishable under Rule 132-A of the DIRs could have been instituted even after the repeal of that rule." 26. It will be clear from a reading of this paragraph that a Madhya Pradesh High Court judgment was distinguished by the Constitution Bench on two grounds. One being that Section 6 of the General Clauses Act does not apply to a rule but only applies to a Central Act or Regulation, and secondly, that Section 6 itself would apply only to a "repeal" not to "an omission". This statement of law was followed by another Constitution Bench in the Kolhapur Canesugar Works Ltd. case. After setting out paragraph 17 of the earlier ....
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....ute is not repealed but comes to an end by expiry. The section on its own terms is limited to a repeal brought about by a Central Act or Regulation. A rule made under an Act is not a Central Act or regulation and if a rule be repealed by another rule, section 6 of the General Clauses Act will not be attracted. It has been so held in two Constitution Bench decisions. The passing observation in these cases that "section 6 only applies to repeals and not to omissions" needs reconsideration for omission of a provision results in abrogation or obliteration of that provision in the same way as it happens in repeal. The stress in these cases was on the question that a 'rule' not being a Central Act or Regulation, as defined in the General Clauses Act, omission or repeal of a 'rule' by another 'rule' does not attract section 6 of the Act and proceedings initiated under the omitted rule cannot continue unless the new rule contains a saving clause to that effect...."(At pages 697 and 698) 30. In view of what has been stated hereinabove, perhaps the appropriate course in the present case would have been to refer the aforesaid judgment to a larger bench. But we....
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....ese two judgments on an application of the 'per incuriam' principle.[1] 34. Thirdly, an earlier Constitution Bench judgment referred to earlier in this judgment, namely, State of Orissa v. M.A. Tulloch & Co., (1964) 4 SCR 461 has also been missed. The Court there stated: "....Now, if the legislative intent to supersede the earlier law is the basis upon which the doctrine of implied repeal is founded could there be any incongruity in attributing to the later legislation the same intent which Section 6 presumes where the word 'repeal' is expressly used. So far as statutory construction is concerned, it is one of the cardinal principles of the law that there is no distinction or difference between an express provision and a provision which is necessarily implied, for it is only the form that differs in the two cases and there is no difference in intention or in substance. A repeal may be brought about by repugnant legislation, without even any reference to the Act intended to be repealed, for once legislative competence to effect a repeal is posited, it matters little whether this is done expressly or inferentially or by the enactment of repugnant legislation. If....
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....ayala Corporation (P) Ltd. (supra), the Apex Court failed to consider earlier judgment of the Constitution Bench and thereby after detailed discussion, the judgment in the case of Fibre Boards Pvt. Ltd. (supra) was given." 9. The afore-cited Final Order dated 08.04.2024 clearly brings out that the provisions of Section 6, 6A and 24 of the General Clauses Act will also be applicable where the provisions of the statute are omitted and not repealed. In fact, the Apex Court has in the case of Fibre Boards Pvt. Ltd. vs. CIT [(2015) 10 SCC 333] has held that the word repeal used in the Sections would include repeals by express omission. The words repeal and omission have thus been interchangeably used. The same position has been taken by the Hon'ble Supreme Court in Shree Bhagwati Steel Rollling Mills vs. Commissioner of Central Excise and Anr. (supra). The relevant paragraphs of the judgment are cited as follows: "13. On a conjoint reading of the three expressions "delete", "omit", and "repeal", it becomes clear that "delete" and "omit" are used interchangeably, so that when the expression "repeal" refers to "delete" it would necessarily take within its ken an omission as we....
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....t had the intention of remaining in India after his return in May, 2012, the language used in the provision of Section 2(v)(i) of FEMA does not allow for him to be regarded as person resident in India. There is no dispute as to the date of purchase of the agricultural land in the name of the wife of the Appellant in August, 2012, from the funds earned abroad by the Appellant. Since the purchase of the agricultural land had occurred in August, 2012, we find that in accordance with the provisions of Section 2(v)(i) of FEMA, the financial year which needs to be considered is 2011-12 i.e. from 01.04.2011 to 31.03.2012, to determine the residential status of the Appellant. There is no dispute about the Appellant having not stayed in India for more than 182 days in the preceding financial year 2011-12. The question is whether by virtue of the provisions of clause B of Section 2(v)(i) of FEMA, can the Appellant be included as a person resident in India. The provision allows for a person to be not included as person resident in India, if he has come to or stays in India even though having spent 182 days in India in the preceding financial year. His coming to or staying in India should have....
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....contravention must be made by the defaulter with guilty intention or not. We also further held that unless the language of the statute indicates the need to establish the presence of mens rea, it is wholly unnecessary to ascertain whether such a violation was intentional or not." 12. On perusal of Section 13 of FEMA which is the Section under which penalty is imposed for contravention of any of the provisions of the Act or any rule, regulation, notification, direction, order or any condition subject to which an authorization is issued by the Reserve Bank of India makes it obvious that the language of the Section does not require intention for penalizing of contravention. 13. The provisions of Section 13(1) of FEMA is as follows: "If any person contravenes any provision of this Act, or contravenes any rule, regulation, notification, direction or order issued in exercise of the powers under this Act, or contravenes any condition subject to which an authorisation is issued by the Reserve Bank, he shall, upon adjudication, be liable to a penalty up to thrice the sum involved in such contravention where such amount is quantifiable, or up to two lakh rupees where the amoun....