TaxTMI 
TaxTMI 
2025 (10) TMI 797
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....uty Commissioner of Income Tax has filed three complaints in the Special Court for Economic Offences, Bangalore against the said Shri Alok Bhartia. A copy of the Prosecution Complaint filed by the I-T Dept. before the Ld. Special Court of Economic Offences, Bangalore, under Section 200 of the Code of Criminal Procedure Code, 1973, for the offence punishable under Section 277 of the Income Tax Act 1961, was also obtained by the Directorate vide the I-T Dept's letter No. ACIT.CC- 2(1)Blr/138(1)(b)/2015-16 dated 24.02.2016. 3. Based on the information, a case was registered against Shri Alok Bhartia, under the FEMA, 1999, for maintaining foreign bank account without the permission of the Reserve Bank of India ("RBI"), in contravention of Section 4 of the said Act read with Regulation 3 of The Foreign Exchange Management (Foreign Currency Accounts by a Person Resident in India) Regulations, 2000. 4. From the complaint filed by the Deputy Commissioner of Income Tax, it was seen that the I-T Department had conducted a search operation on 25.08.2011 at the premises of M/s East India Commercial Company & others Shri Alok Bhartia and his wife Smt. Alpana Bhartia were directors of the ....
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....at present he is residing at 45 Scotts Road, 11-03, Scotts High Park, Singapore 228232; that he worked as Director of East India Commercial Company Ltd., Calcutta; that he was a director of many other companies and he resigned when he left India; that presently he is the Vice President of M/s Trade Sea International Pte Ltd, Singapore. On being asked whether he has any bank account with HSBC Switzerland, he stated that this is subject matter of litigation with the Income Tax Dept. and he has nothing more to say. He accepted that in this connection, he has paid, under protest Rs. 3,60,00,000/- towards additional tax plus interest, and he is contesting the matter in the Court. 8. During the course of further investigation, Shri Alok Bhartia and his wife Smt. Alpana Bhartia were examined under Section 37 of FEMA, 1999. Shri Alok Bhartia, in his statement dated 27.03.2017, inter-alia stated that he does not have any immovable property abroad either in his name or in the name of his wife. However, in India, he has only an undivided share in the ancestral property which is situated in Churu, Rajasthan. Smt. Alpana Bhartia in her statement dated 30.11.2017 stated inter-alia that she do....
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....03.2018) under Section 16(3) of the Act before the Additional Director of Enforcement, (adjudicating authority) under FEMA, 1999 with the prayer to take the cognizance of the complaint and issue the necessary notices to the Respondents. 13. The Ld. adjudicating authority considered the said complaint dated 26.03.2018 and also the relied upon documents (RUDs ) submitted by the Complainant and initiated adjudication proceedings against the appellants by issue of Show Cause Notices bearing No. T-4/08- BGZO/ADE/SK/2018 dated 26.04.2018 to the respondents Shri Alok Bhartia and Smt. Alpana Bhartia. In response to the said SCNs, the replies dated 01.06.2018 were filed by the noticees. Based on the reply submitted by the noticees and the RUDs submitted by the Complainant, the Adjudicating Authority dropped the proceedings against the appellants vide the impugned order dated 16.10.2018. 14. Aggrieved by the said order, the Directorate (ED) has filed this appeal assailing the impugned order on various grounds. Submissions on Behalf of the Appellant (ED) 15. Ld. Counsel for the Appellant Directorate made detailed reference to the facts of the case emerging from the documents on re....
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....d to the HSBC bank account of Sh. Alok Bhartia held with HSBC Bank Ltd. Geneva, without the permission of RBI. The Ld. AA failed to examine the letter no. ACIT.CC-2(1) Blr/138(1)(b) 2015-16 dt. 24.02.2016 along with prosecution complaint dt.24.03.2015 filed by the Income Tax Department in CC No. 64/2015 before the Economic Offence Court, Bangaluru. 20. It is also submitted that the Ld. AA did not consider the statements dt. 27.04.2016, 27.03.2017 given by Sh. Alok Bhartia and statement dt. 30.11.2017 of Smt. Alpana Bhartia given before the Assistant Director of Enforcement, the Investigating Officer; failed to take into account the provisions of section 39 of the FEMA,1999 which provide for the presumption as to documents in certain cases viz. the statement dt. 25.08.2011 recorded under section 132(4) of the Income Tax by the IT authority. 21. It is further argued that the Ld. AA erred in considering the bald retraction of the statement on 05.09.2011, by the respondents. 22. On the above grounds, it is prayed on behalf the appellant that the present appeal filed by the Directorate be allowed. Submissions on behalf of the Respondent 23. It is argued on behalf of the R....
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....own sources. Therefore, the statement recorded under Section 132(4) of the IT Act lacks legal sanctity and cannot be treated as an admissible evidence. This statement was also retracted by the Noticee on 05.09.2011 by filing an affidavit before the Income Tax Department. It is also pertinent to note here that no incriminating documents were found or seized during the course of search pertaining to bank accounts of HSBC, Geneva." 26. Further, Section 39 of the Foreign Exchange Management Act provides for presumption with respect to documents. Section 39 states: "39. Presumption as to documents in certain cases Where any document-- (i) is produced or furnished by any person or has been seized from the custody or control of any person, in either case, under this Act or under any other law; or (ii) has been received from any place outside India (duly authenticated by such authority or person and in such manner as may be prescribed) in the course of investigation of any contravention under this Act alleged to have been committed by any person, and such document is tendered in any proceeding under this Act in evidence against him, or against him and....
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....no attempt should be made to obtain confession as to the undisclosed income. Any action on the contrary shall be viewed adversely. Further, in respect of pending assessment proceedings also, Assessing Officers should rely upon the evidences/materials gathered during the course of search/survey operations or thereafter while framing the relevant assessment orders." 29. The decision of the Hon'ble High Court of Delhi in CIT v. Harjeev Aggarwal reported in 2016 SCC Online Del 1512 is relied upon wherein it was held as follows: "25. A plain reading of Section 132(4) of the Act indicates that the authorized officer is empowered to examine on oath any person who is found in possession or control of any books of accounts, documents. money, bullion, jewellery or any other valuable article or thing. The explanation to Section 132 (4), which was inserted by the Direct Tax Laws (Amendment) Act, 1987 w.e.f. 1 April, 1989, further clarifies that a person may be examined not only in respect of the books of accounts or other documents found as a result of search but also in respect of all matters relevant for the purposes of any investigation connected with any proceeding....
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....admission. Hence, there is no reason not to disbelieve the retraction made by the Assessing Officer and explanation duly supported by the evidence..." 31. It is next contended that the retraction dated 05.09.2011 of the Respondent No.1 is a specific retraction since he has categorically denied having the alleged bank account. A person who is not having an account cannot be expected to give any further details about the same as he has no control over it. The Appellant is trying to transfer the burden of proof onto the Respondent, as it is unable to substantiate its own claims, which is not maintainable under law. Hence, it is not correct to say that the retraction dated 05.09.2011 was bald. 32. It is also argued that the Appellant has failed to produce an iota of evidence as to the existence of any account in HSBC, Geneva in the name of the Respondents. The Learned Adjudicating Authority has rightly dropped the baseless charges levelled against the Respondents. 33. It is also submitted that the Learned Special Court for Economic Offences at Bangalore has dismissed the complaints filed against the Respondent being C.C. No. 347/2014 under Section 276D of the Income Tax Act, C....
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....does not remember to have any bank account in HSBC Bank, Geneva. 38. After proceedings were initiated under FEMA,1999, in his statement before ED under section 37 on 27.04.2016, he stated that he had paid an amount of Rs. 3,60,00,000/- towards additional income tax plus interest but he was contesting the matter in court. 39. The facts on record also reveal that an order was passed by the Dy. Commissioner of Income Tax, Central Circle 2(1), Bangalore on 28.02.2014 whereby an addition of Rs. 5,98,40,617/- was made to the income of the Respondent No.1 for Assessment Year 2007-08 on account of the deposits found in the aforesaid bank account and the disclosure made. The said order was contested by the respondents before the appellate authorities under the I-T Act, but Income Tax Appellate Tribunal, vide its order passed in May 2017, dismissed the appeals filed by the appellants (the respondents herein). The decision of the ITAT was largely based on the judgment of the Hon'ble Bombay High Court in Soignee R. Kothari v. DCIT MANU/MH/0795/2016 wherein an adverse inference was drawn against the assessee because the assessee therein was not ready to provide consent waiver to get bank ....
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....ttle doubt that it is foreign in origin. Section 39 of the FEMA, 1999 lays down that where any document has been received from any place outside India (duly authenticated by such authority or person and in such manner as may be prescribed) in the course of investigation of any contravention under the Act, it may be presumed, unless the contrary is proved, that the signature and every other part of such document which purports to be in the handwriting of any particular person or which the court may reasonably assume to have been signed by, or to be in the handwriting of, any particular person, is in that person's handwriting, and in the case of a document executed or attested, that it was executed or attested by the person by whom it purports to have been so executed or attested. In the present case, the document is evidently neither signed by any bank official nor by the appellants herein nor has it been authenticated as required by the law. It is merely a photocopy of a document whose origin was not at once clear from a bare perusal. 43. In view of the above facts, during the hearing held on 08.04.2025, specific clarifications were sought from the respondent directorate on the ....