TaxTMI 
TaxTMI 
2026 (1) TMI 1580
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....ia] issuing various directions contained in paragraph 83 of the order. 2. We have heard Mr. Janak Dwarkadas and Mr. Gaurav Joshi, learned Senior Advocate for the appellants and Mr. Chetan Kapadia, learned Senior Advocate for the SEBI. 3. Appellants' pleaded case is, second appellant, Avadhut Dinkar Sathe established an academy in 2008 as a training platform to impart financial knowledge in investment and trading. First appellant is the academy, appellant Nos. 2 and 3 are its Directors. The academy has organised popular courses, namely, Eye Opener Seminars, Get Edge Over Others Program (GEO), Pay Attention to Price Action (PAPA), Futures & Options Made Easy (FOME), Get Ultimate Edge (GUE), Advanced Mentorship Programs. In 2025, the academy established a residential training campus known as 'ASTA Gurukul' with residential facility for advance courses. 4. On August 20 and 21, 2025, SEBI conducted search and seizure operation at ASTA Gurukul and residences of Appellant Nos. 2 and 3. Appellants' Mobile phones, laptops, hard disks, CPUs, emails/cloud accounts were seized. Later, SEBI called for further information and it was furnished. On December 4, 2025, appellants learnt abou....
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....mitted position that the alleged activities have been going on since 2020, SEBI ought to have granted an opportunity to submit reply to the show cause notice and thereafter pass an appropriate order without resorting to passing the ex-parte interim order. As on the date of freezing, appellants had about Rs.4 Crores in their bank accounts. The direction to place a deposit of Rs.546 Crores is based on the premise that appellants may siphon of the money. The order does not contain any finding as to where the said amount is traceable. The apprehension of siphoning is misconceived. He submitted that appellants have paid a total GST/service tax of Rs.90.55 Crores, income tax of Rs.71.71 Crores, CSR and donation of Rs.3.93 Crores. They have spent Rs.316.74 Crores on administrative and operational expenses and invested Rs.100 Crores on the fixed assets and do not have any money. In substance, Mr. Dwarkadas submitted that appellant has been carrying on his activities since 2008. Therefore, there is no imminent urgency in passing harsh orders which have damaged appellants' reputation. SEBI ought to have heard the appellants and pass a reasoned order. 7. In reply, Mr. Chetan Kapadia, learn....
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...., whereas, the details from the stock exchange revealed that she had incurred a loss of Rs.1.38 Lakhs. 10. He next adverted to another testimonial by one Mr. Rehan Shaikh on the YouTube claiming that he had bought a bike from a trading profit of Rs.2.5 Lakhs, whereas, the details from the stock exchanges had revealed a loss of Rs.13,256. 11. Mr. Kapadia submitted that lured by such testimonials, gullible investors enter the stock market with great expectation and lose their hard earned money. He submitted in the cumulative loss of individual trades between F.Y.2022 and F.Y.2024 has crossed about Rs.1.80 Lakh loses. 12. With regard to the video recordings, a videos was played during the hearing. Mr. Kapadia pointed out that Mr. Sathe, during the live session on April 28, 2025 has stated thus: * "AS [Avadhut Dinkar Sathe]: Abhi tak hua nahun hai breakout lekin ye develop ho raha hai; toh ye break karega to humare lie acha hai. This is why I picked this stock, (PFC) to buy." * "AS: Aaj subah jab aaya na to maine buy kiya ye candle ke neeche mera stop loss 410...Pehla target obviously ye rahega (indicating on screen a level of 421.05)...agar iske upar breakso....
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....e case in rejoinder. 18. In rejoinder, Mr. Janak Dwarkadas submitted that appellants have appropriate replies to each and every allegation levelled against them. Though supporting material and documents have been placed on record, appellants do not wish to invite any finding by this Tribunal with regard to the factual aspects of the matter at this stage because appellants are yet to file their replies to the SCN. However, appellants are highly aggrieved by SEBI's direction to place in deposit Rs.546 [Precisely Rs.5,46,16,65,367/-] Crores while simultaneously restraining them from accessing the market and freezing all their bank accounts. He submitted that SEBI's apprehension that appellants may siphon off Rs.546 Crores has eroded their reputation and it is irreparable and cannot be compensated. 19. We have carefully considered the rival contentions and perused the records. 20. Undisputed facts of the case are, appellants were conducting courses in the Academy since 2008. According to them the courses were only for educational purposes. SEBI's allegation is that while using the live data, stock recommendations were given in the course classes and the participants were tradi....
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.... in the court hall was the 'live data' of Power Finance Corporation scrip is not denied. However, Mr. Dwarkadas sought to justify screening the live data in the class by quoting the example of medical students and submitted that any amount of theory cannot substitute a live demonstration and hands on experience. That may be true. But what is under consideration is whether an unregistered investment advisor can screen the live data showing the movement of scrip when the market is open and make recommendations. The precise allegation against the appellants is that in the guise of imparting education stock recommendations are given. In view of the admitted position that what was screened in the court was 'live data', it is reasonable to infer that the 'live data' material was used and demonstrated in the classes. 25. So far as the WhatsApp group is concerned, it is relevant to note that it is a paid channel and participants paying Rs.30,000 are enrolled in the group. Some messages containing stock recommendations are extracted in Table No.18 of the impugned order. 26. According to SEBI, out of 34 instances examined by SEBI in 33 instances the participants have traded. To support....
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..... Further, the legality and correctness of this circular is not under challenge. Therefore, the purported admission by the WTM cannot be read in isolation. 31. The matter is at the stage of reply to the show cause notice. As noted hereinabove, appellants have consciously refrained from making any submissions on the facts of the case. It was categorically submitted by Mr. Dwarkadas that appellants do not invite any findings by this Tribunal by making arguments with reference to the facts of the case. 32. In the light of the facts narrated hereinabove and on careful perusal of the submissions made on behalf of the parties we are of the considered opinion that * The IA Regulations and the RA Regulations were certainly in force during the period under consideration i.e. 2020 to 2025; * Testimonials have been uploaded on the YouTube channel even after administrative warning issued by the SEBI; * SEBI has placed on record the factual matrices of the case and the material seized during the search and seizure operation which also include the testimonials. Thus, SEBI has made out a prima facie case of violation of IA and RA Regulations. 33. Having held th....