TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 1277
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....P (ED) - R2 & R3 COMMON JUDGMENT HEMANT CHANDANGOUDAR, J. These intra-court appeals assail the common order dated 02.04.2024 passed by the learned Single Judge in W.P. Nos. 19631 and 19632 of 2017. By the said order, the learned Single Judge dismissed the writ petitions filed by the appellants herein challenging the communication issued by the first respondent returning the compounding applications submitted by the appellants for compounding of contraventions under the Foreign Exchange Management Act, 1999 (for brevity, "FEMA, 1999"). Since the issues involved in both the writ appeals are similar, they are taken up together, heard, and disposed of by this common judgment. 2. The complaint against the appellants was registered fo....
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.... remittance. ii. On 01.11.2010, a Profit Share Agreement was entered into between the purchasers and the sellers. However, the appellant filed Form FCTRS with DCB only on 30.04.2011, well beyond the prescribed time limit. Consequently, the second respondent issued summons to the appellant and its Directors under Section 50 of the Prevention of Money Laundering Act, 2002 (PMLA). The second respondent thereafter conducted a search on 01.12.2015 under Section 37 of FEMA, 1999, in the office premises of the appellant and the residential premises of its Directors. Subsequently, the Income Tax Department also conducted a survey under Section 133A of the Income Tax Act, 1961 in the office premises of the appellant. 3. During the penden....
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....n Exchange Management Act, 1999 (42 of 1999), except clause (a) of section 3 of that Act- (a) where the sum involved in such contravention is Rs. 10 lakhs or below, by the Assistant General Manager of the Reserve Bank of India; (b) where the sum involved in such contravention is more than Rs. 10 lakhs but less than Rs. 40 lakhs, by the Deputy General Manager of the Reserve Bank of India; (c) where the sum involved in the contravention is Rs. 40 lakhs or more but less than Rs. 100 lakhs, by the General Manager of the Reserve Bank of India; and (d) where the sum involved in such contravention is Rs. 100 lakhs or more, by the Chief General Manager of the Reserve Bank of India: Provided further that ....
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....at, with respect to any proceeding initiated under Rule 4, if the Enforcement Directorate is of the view that the said proceeding relates to a serious contravention suspected of money laundering, terror financing, or affecting the sovereignty and integrity of the nation, the Compounding Authority shall not proceed with the matter and shall remit the case to the appropriate Adjudicating Authority for adjudication under Section 13." 7. A conjoint reading of the above provisions makes it clear that the Reserve Bank of India is empowered to compound contraventions under FEMA, 1999, except those covered under Clause (a) of Section 3, subject to the proviso to Rule 8(2) of the Rules, 2000. Where the Enforcement Directorate forms an opinion tha....
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....nding against them, the same is factually incorrect. The learned counsel for the Enforcement Directorate (second respondent) has produced a copy of the complaint filed before the Special Judge, New Delhi, against the appellants and others for the offence of money laundering under Section 3, read with Section 70, and punishable under Section 4 of the Prevention of Money Laundering Act, 2002 (PMLA). The said complaint also contains allegations of contraventions under Section 13 of FEMA, 1999, as detailed in paragraphs 15.8 to 15.10 thereof, which read as follows: "15.8 The balance sheets of ASCPL for the financial years 2007-08 and 2008-09 show that, during this period, the only source of funds available to ASCPL was the money receiv....