TaxTMI 
TaxTMI 
2026 (7) TMI 1854
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....ser, Directorate of Enforcement, Chennai against part of the Adjudication Order No. SDE/SRO/BGZO/07/2020(SK) dated 30.06.2020 (Impugned Order), passed by the Special Director, Enforcement Directorate, Government of India, Chennai. The Ld. Adjudicating Authority (AA) imposed penalty of Rs. 7,00,00,000/- on the Appellant Company M/s IGNIS Technology Solutions Pvt. Ltd. for the contraventions of Section 10 (6) of the Foreign Exchange Management Act, 1999 (FEMA) read with Regulation 6 (1) of the Foreign Exchange Management (Realization Repatriation and Surrender of Foreign Exchange) Regulations, 2000. Further penalty of Rs. 70,00,000/- was imposed on Shri Nihar Ranjan Samantara CEO and Director, of the Appellant Company, vide the Impugned Order....
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....dran was authorised to operate both the accounts. All the expenses for opening of Companies and their bank accounts were borne by Shri G. Dhananjaya Reddy. Both the Companies had not hired/ purchased any office in Sharjah, UAE and were allotted only post box numbers. The said Companies were not engaged in manufacturing/ development/trading activity including that of software. However, the agreement dated 15.02.2010 between the Company M/s Ignis Technology Solutions Pvt. Ltd. and M/s. Supreme Software Technologies FZC, UAE preceded the date of issuance of licence for M/s. Supreme Software Technologies FZC, UAE on 02.03.2010 by Saif Zone Authorities. All the documents in respect of the two Companies, including cheque books, were handed over b....
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....d cash credit account of the Appellant Company. The Amount totalling US$ 74,24,928/- got credited to the account of M/s. Supreme Software Technologies FZC, UAE, Sharjah. 4. Ld. Counsel for the Appellant Directorate submitted that the Respondent Shri Nihar Ranjan Samantara was the CEO and Director of the M/s Ignis Technology Solutions Pvt. Ltd. during the relevant time. Ld. Counsel cited the following portion of Paragraph 4.9 of the Impugned Order: "I find from the records of the case that Noticee -2 was the Chief Executive Officer, shareholder and Director of Noticee 1 Company when the contravention was committed by the Company. Documents show that he was one of the joint authorized signatories of Noticee 1 Company, along with N....
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....Technology Solutions Pvt. Ltd. 5. Ld. Counsel Appellant Directorate prayed that the quantum of penalty was unreasonable and low which cannot be justified on the cannons of faire plan reason. Ld. Counsel urged that after having found the Respondent responsible for the conduct of business of the Company, maximum penalty should have been imposed as Section 13(1) of FEMA provides for penalty up to three times the sum involved in the contraventions. Ld. Counsel alleged that judicial discretion was not exercised to impose penalty commensurate with the quantum of contravention. He therefore pleaded to enhance the penalty. 6. Ld. Counsel for the Respondent pleaded that the Respondent had been suffering from multiple serious ailments i.e. card....
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.... Section 13(1) of FEMA which provides for imposition of penalty up to thrice the sum involved in the contraventions. Section 13(1) of FEMA, states: "(1) 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 authorization 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 amount is not quantifiable, and where such contravention is a continuing one, further penalty which may extend to five thousand rupees for every day....