V. Anandarajan,

Rajesh Malhotra,

Member, Appellate Tribunal

Member, Appellate Tribunal

APPELLATE TRIBUNAL UNDER SAFEMA/FEMA/FERA, AT NEW DELHI

FPA-FE-40/DLI/2019

Date of Institution:

11.07.2019

Date of Decision:

21.02.2023

Avtar Singh Sekhon,

106, Adarsh Colony,

Barewal Road,

Ludhiana- 141012

………….. Appellant

Versus

The Director,

Directorate of Enforcement,

6^th Floor, Lok Nayak Bhawan,

Khan Market, New Delhi

………. Respondent

Argued By:

Mr. Jasleen Singh Khera, Advocate, for the Appellant,

Mr. Pankaj Pandey & Ms. Aparna Kushwah, Advocates, for the Respondent.

FINAL ORDER

Present appeal is filed against the impugned order dated 22.04.2019,

passed by Ms. Sunita Singh, Learned Special Director (Appeals), FEMA, New

Delhi, whereby the order dated 31.05.2017 passed by Shri Santokh Singh,

Learned Assistant Director, Directorate of Enforcement, Chandigarh was

upheld and confirmed, imposing penalty of Rs. 5,00,000/- on Shri Avtar

Singh Sekhon for contravention of 8 (a) of Schedule 3, issued under 5 (1) (ii)

of Foreign Exchange Management (Deposit) Regulations, 2000.

2. The brief facts of the case are that information was received in the

office of ED that Shri Avtar Singh Sekhon (A person resident outside India)

has disposed of his residential property at #3269, Sector – 35D, Chandigarh

for a sale consideration of Rs. 90 lacs, and thereafter, deposited the proceeds

in his bank account No. 11972151008616 held with Oriental Bank of

Commerce, Sector-65 Mohali, Punjab. This Bank account was a Saving Bank

Account meant for Resident Indian. The instruments used for payment to

Shri Avtar Singh Shekhon along with the copy of Bank statement, wherein

Avtar Singh Sekhon v. The Director, Directorate of Enforcement

2

V. Anandarajan,

Rajesh Malhotra,

Member, Appellate Tribunal

Member, Appellate Tribunal

credits of Rs. 90 lacs, were reflected therein was also enclosed with

information.

On receiving this information, the investigation was conducted:-

(i)

To ascertain the residential status of Shri Avtar Singh Shekhon,

Letters were written to Oriental Bank of Commerce, Sector- 65,

Mohali Punjab to call for information such as account

statement, account opening form etc. Summons were issued in

the name of Shri Avtar Singh Shekhon at the address provided

by the customer while opening the above said Bank account.

The Bank replied vide its letter dated 26.06.2013 that the party

never disclosed before the Bank that he was an NRI for Foreign

Exchange Management Act, 1999. The bank further informed

that the account was opened on 03.08.2009. Account Opening

Form and Bank Statement copy were provided by the Bank,

during investigation.

(ii)

The Bank statement revealed that around Rs. 90,01,000/- was

deposited into the account between 05.08.2009 to 27.08.2009

through 4 instruments of Rs. 10 lacs, Rs. 15 lacs, Rs. 15 lacs,

and Rs. 50 lacs. The approximate account in tranches of Rs.

39,10,000/- and Rs. 50 lacs, was further invested in Capital

Gain Accounts (NHAI Bonds) with OBC for availing Income Tax

rebates. These two sums after maturity were put back into the

same account on 13.05.2011 and 03.11.2012 respectively, along

with interest accrued on different dates.

(iii)

The summons issued to Shri Avtar Singh Shekhon were

returned undelivered, since he was not found residing at the

address provided by him in the Bank account. A declaration by

the occupant, as well as report from ED Official confirmed that

he was not residing at the given address.

Avtar Singh Sekhon v. The Director, Directorate of Enforcement

3

V. Anandarajan,

Rajesh Malhotra,

Member, Appellate Tribunal

Member, Appellate Tribunal

(iv)

On 30.10.2013, Chartered Accountant Shri Ravinder Singh

Khera appeared on behalf of Shri Avtar Singh Shekhon and

produced power of attorney dated 26.08.2013 given by him to

authorize him to represent Shri Avtar Singh Shekhon before the

Deputy Director. A copy of Passport issued