Dismissed

FPA-19/LKW/1997 of Durga P. Jaiswal v. The Competent Authority, Lucknow

ATFP3 Jul 2024FPA-19/LKW/1997

Case brief

AI extract

What is this about?

The Appellate Tribunal under SAFEMA dismissed appeals challenging the forfeiture of properties belonging to Raja Ram Jaiswal's legal heirs. The court held that the appellants failed to discharge the burden of proving a legitimate source for the acquisition of properties, thus upholding the competent authority's order.

What did the court decide?

The appeals were dismissed with the order of forfeiture of properties upheld.

FPA-19/LKW/1997 of Durga P. Jaiswal Vs. The Competent Authority… — Money Laundering | ATFP (2024)

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APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI

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(1) MP-304/LKW/2023 (Resto.) MP-77/LKW/2013 (Resto.) MP-93/LKW/2013 (Sub.) MP-18/LKW/2014 (Abatement) MP-19/LKW/2014 (COD) FPA-73/LKW/1996 GhanshyamDassJaiswal … Appellant Versus

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The Competent Authority, Lucknow … Respondent

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(2) MP-305/LKW/2023 (Resto.) MP-94/LKW/2013 (Resto.) MP-20/LKW/2014 (Abatement) MP-21/LKW/2014 (COD) FPA-74/LKW/1996

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GhanshyamDassJaiswal … Appellant Versus The Competent Authority, Lucknow … Respondent

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(3) MP-306/LKW/2023 (Resto.) MP-92/LKW/2013 (Resto.) FPA-75/LKW/1996 Vikas Singh Jaiswal … Appellant Versus The Competent Authority, Lucknow … Respondent (4) MP-307/LKW/2023 (Resto.) MP-79/LKW/2013 (Resto.) MP-95/LKW/2013 (Sub.) MP-22/LKW/2014 (Abatement) MP-23/LKW/2014 (COD) FPA-76/LKW/1996 Shankar P. Jaiswal … Appellant Versus The Competent Authority, Lucknow … Respondent

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FPA-73-84/LKW/1996 & FPA-16-19/LKW/1997

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Page 1 of 15

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(5)	MP-308/LKW/2023 (Resto.) MP-80/LKW/2013 (Resto.)
	MP-96/LKW/2013 (Sub.)
	MP-24/LKW/2014 (Abatement) MP-25/LKW/2014 (COD) FPA-77/LKW/1996
	Shankar P. Jaiswal Versus	… Appellant
	The Competent Authority, Lucknow	… Respondent
(6)	MP-309/LKW/2023 (Resto.) MP-81/LKW/2013 (Resto.) FPA-78/LKW/1996
	Vishal Singh Jaiswal Versus	… Appellant
	The Competent Authority, Lucknow	… Respondent
(7)	MP-310/LKW/2023 (Resto.) MP-82/LKW/2013 (Resto.) FPA-79/LKW/1996
	Vikas Singh Jaiswal Versus	… Appellant
	The Competent Authority, Lucknow	… Respondent
(8)	MP-311/LKW/2023 (Resto.) MP-83/LKW/2013 (Resto.) FPA-80/LKW/1996
	Vishal Singh Jaiswal	… Appellant
	Versus
	The Competent Authority, Lucknow	… Respondent
(9)	MP-312/LKW/2023 (Resto.) MP-84/LKW/2013 (Resto.) FPA-81/LKW/1996
	Vishal Singh Jaiswal Versus	… Appellant
FPA-7	3-84/LKW/1996 & FPA-16-19/LKW/1997 The Competent Authority, Lucknow	Page 2 of 15 … Respondent

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(10) MP-313/LKW/2023 (Resto.) MP-85/LKW/2013 (Resto.) FPA-82/LKW/1996

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Vishal Singh Jaiswal … Appellant Versus The Competent Authority, Lucknow … Respondent (11) MP-314/LKW/2023 (Resto.) MP-86/LKW/2013 (Resto.) FPA-83/LKW/1996 Durga P. Jaiswal … Appellant Versus The Competent Authority, Lucknow … Respondent (12) MP-315/LKW/2023 (Resto.) MP-87/LKW/2013 (Resto.) FPA-84/LKW/1996 Durga P. Jaiswal … Appellant Versus The Competent Authority, Lucknow … Respondent (13) MP-316/LKW/2023 (Resto.) MP-136/LKW/2017 (Misc.) MP-88/LKW/2013 (Resto.) MP-97/LKW/2013 (Sub.) MP-26/LKW/2014 (Abatement) MP-27/LKW/2014 (COD) FPA-16/LKW/1997 Durga P. Jaiswal … Appellant Versus The Competent Authority, Lucknow … Respondent (14) MP-317/LKW/2023 (Resto.) MP-89/LKW/2013 (Resto.) MP-28/LKW/2014 (Sub.) MP-29/LKW/2014 (Abatement) MP-30/LKW/2014 (COD) FPA-73-84/LKW/1996 & FPA-16-19/LKW/1997 Page 3 of 15

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FPA-17/LKW/1997

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AkashJaiswal … Appellant

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Versus

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The Competent Authority, Lucknow … Respondent

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(15) MP-318/LKW/2023 (Resto.) MP-90/LKW/2013 (Resto.) MP-98/LKW/2013 (Sub.) MP-31/LKW/2014 (Abatement) MP-32/LKW/2014 (COD) FPA-18/LKW/1997

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Shanker Prasad Jaiswal … Appellant Versus

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The Competent Authority, Lucknow

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… Respondent

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(16) MP-319/LKW/2023 (Resto.) MP-91/LKW/2013 (Resto.) FPA-19/LKW/1997

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Durga P. Jaiswal … Appellant Versus

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The Competent Authority, Lucknow … Respondent

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Advocates/Authorized Representatives who appeared

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For the Appellants : Mr. Anurag Singh, Advocate For the Respondent : Ms. Mukta Arora, Advocate

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CORAM

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JUSTICE MUNISHWAR NATH BHANDARI : CHAIRMAN SHRI BALESH KUMAR : MEMBER

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FINAL ORDER

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03.07.2024

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FPA-73-84/LKW/1996&FPA-16-19/LKW/1997

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FPA-73-84/LKW/1996 & FPA-16-19/LKW/1997

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Page 4 of 15

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These batch of appeals of years 1996 and 1997 were listed on the applications for recall of the order dated 04.11.2022 and even for restoration of appeals after condonation of delay. The pending appeals were dismissed earlier for non-prosecution by this Tribunal videits order dated 07.07.2011. It was found that nobody is appearing to represent the appellants despite dismissal of the Writ Petition by Allahabad High Court vide its order dated 03.10.2006. The stay earlier granted was vacated. After giving opportunities for representation when none appeared on 04.11.2022 before this Tribunal, the applications for condonation of delay coupled with restoration applications were dismissed. Thus, the prayer is to recall the order dated 04.11.2022 along with the acceptance of restoration applications after condoning the delay.

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The learned counsel for the respondent opposed the applications but for ends of justice and to give an opportunity of hearing, counsel for the parties were asked as to whether they can argue the appeal finally if it is restored to its original number by recalling the orders dated 04.11.2022 and 07.07.2011 and that too after restoration of the appeals as there would be no purpose to keep the appeals pending. It is finding that the appeals were preferred in the years 1996 and 1997 thus a period of more than 27 years have already passed. Both the counsel

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FPA-73-84/LKW/1996 & FPA-16-19/LKW/1997

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Page 5 of 15

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prayed for hearing of the appeals finally after restoration and accordingly they were called upon to argue the appeals finally.

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We, however, pass an order for recall of the orders dated 04.11.2022 and 07.07.2011 and at the same time restoration of the appeals after condoning the delay. The appeals were heard finally with the consent of the parties.

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The learned counsel for the appellants has submitted that challenge to the order dated 29.03.1996 has been made precisely on two grounds. The first ground is in reference to detention of Raja Ram Jaiswal under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (in short `COFEPOSA’) which was, in fact, at the behest of the then Chief Minister H.N. Bahuguna. The other issue was in regard to forfeiture of the properties of Raja Ram Jaiswal and his family members without proper appreciation of the argument and the documents produced to show legal source for acquisition of the properties.

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5. The facts available on record shows that one Raja Ram Jaiswal was a detenue under COFEPOSA. He was detained by the State of UP by its order dated 22.09.1975. His detention order was neither revoked nor set side by the Court of Competent Jurisdiction thus a show cause notice was given on 25.01.1978 under Section 6(1) of the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (in short

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FPA-73-84/LKW/1996 & FPA-16-19/LKW/1997

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Page 6 of 15

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`SAFEMA’) in respect of the properties mentioned in the schedule appended to the show cause notice. 6. The show cause notice was given to Raja Ram Jaiswal along with his relatives i.e. his wife, sons and grandson. Raja Ram Jaiswal replied to the notice but he did not give any evidence about the source to acquire the properties. He rather filed Writ Petition No.2272/78 before the Allahabad High Court challenging the validity of the show cause notice and the High Court stayed the proceedings before competent authority. Raja Ram Jaiswal died in October, 1985. Subsequently, High Court vide its order dated 10.07.1991 rendered the Writ Petition to be infructuous and the respondents were given liberty to proceed against the legal heirs of Raja Ram Jaiswal. A show cause notice was issued on 20.11.1992 to the legal heirs but no reply was submitted. The competent authority then asked the office to conduct investigation to find out the whereabouts of legal heirs and on that they discovered that three legal heirs of Raja Ram Jaiswal exist and thereupon the notice was given to them also. 7. In response to the show cause notice, legal heirs prayed for time to submit the reply and accordingly time was granted but despite opportunity, the appellants failed to submit any documents to show legitimate source for acquisition of the properties. When no evidence to prove legitimate source could be

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FPA-73-84/LKW/1996 & FPA-16-19/LKW/1997

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Page 7 of 15

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produced, the properties referred in the schedule to the show cause notice were forfeited.

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8. The appellants havefirst questioned the detention of Late Raja Ram Jaiswalbut we do not find jurisdiction of the Tribunal to address the issue and otherwise it could have been subject matter of writ jurisdiction for challenge but there is nothing on record to show any favourable order holding detention of Raja Ram Jaiswal to be illegal. Thus, lengthy argument to declare the detention of Raja Ram Jaiswal to be illegal is in ignorance of the jurisdiction of the Tribunal and even the litigation before the Allahabad High Court. Thus, we are unable to accept first argument in reference to an issue of which jurisdiction does not lie with the Tribunal.

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9. The forfeiture of properties has been questioned by the appellants mainly in reference to income-tax and wealth-tax returns. It is also in pursuance to the sale deeds. It is submitted that the properties were declared in the Assessment Order but ignoring the aforesaid, an order of forfeiture of properties was passed mainly on the ground that the appellants have failed to disclose source for its acquisition. No document to fortify the legitimate source for acquisition of properties has been submitted. The appellants have pressed upon the income-tax and wealth-tax returns to emphasize it to be sufficient to prove

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legal source for acquisition of properties.

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FPA-73-84/LKW/1996 & FPA-16-19/LKW/1997

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Page 8 of 15

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10. We would accordingly analyse the issue in reference to the

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property:

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(1) House Property at 675, Muthiganj, Allahabad. The

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appellants have submitted that the house property was purchased by Raja Ram Jaiswal on 01.05.1943 from one Shri Barati for a sum of Rs.400/- out of his personal savings. No document to substantiate the savings has been given. However, it is required to be examined further in reference to the income-tax return and for that we have perused the Assessment Order of Raja Ram Jaiswal produced along with the appeal. It is the Assessment Order dated 26.03.1969. Another order is on appeal for the Assessment Year 1964-65. The perusal of the assessment order does not reveal any disclosure of House Property at 675, Muthiganj, Allahabad and document to show legal source for acquisition of the said property. Thus, in the background aforesaid, we find failure of the appellant to show the source for acquisition of the property when burden under Section 8 of the Act lies on him. (2) House No.676&677, Muthiganj, Allahabad. It is

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stated that House No. 676 is a Kachcha house purchased for Rs.700/- on 05.05.1950 from Smt. Bittan and House No. 677 is also a Kachcha house purchased on 23.09.1960 for

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Rs.6500/- from Shri Mahabir Prasad. Both these houses

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FPA-73-84/LKW/1996 & FPA-16-19/LKW/1997

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Page 9 of 15

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were purchased by Raja Ram Jaiswal from his own savings. The construction thereupon was made in Assessment Year 1972-73 by investing Rs.9500/-. To analyse the issue in respect of those properties, we have gone through the Assessment Order and find that no declaration exists for House No. 676 though for House No. 677,exists under the Income-tax return. Therefore, again there is no document on record to show legitimate source for acquisition of House Property 676 and so far as the acquisition of the other House Property 677 is concerned, finding of the Assessing Authority would be relevant and quoted hereunder:

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“5. When the assesse was asked to explain his source of investments he came out with two sources of income that had never been shown in the return and these two sources are the income from truck no. UPC 6097 purchased in April 1963 and the share income from the URF M/S Masuria DeenChhotey Lal, Allahabad. The assessee’s explanation that he did not show these incomes due to inadvertance fails to give any reasons of this fraud and wilful neglect on the part of the assesse in concealing the particulars of his income. The receipts from two trucks comes to Rs.32,361/-. As certified by the assesse the whole of this were spent for the investments during this year and thus deducting this figures from the total investment plus the estimated household expenses made during this year the un-explained investments comes to Rs.35,621/which will be added as income from other sources”.

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The perusal of the finding that no source of income could be shown and it was to be a fraud and wilful neglect on the part of the assesse. The undisclosed income was made FPA-73-84/LKW/1996 & FPA-16-19/LKW/1997 Page 10 of 15

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which was subject matter of appeal but it was limited to unexplained income of Rs.35621/-. The Commissioner of Income Tax in his Appellate Orderdid not wipe out the unexplained income but it was reduced to Rs.20,000/-. The fact given above shows that appellant failed to show his source of income, however, it was accepted without proof and involvement was found to be out of undisclosed income which proves to the case of respondent instead of the appellant.

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(3) House No.673, Muthiganj, Allahabad. According to the appellant, property was purchased from Smt. Mullan for Rs.4900/- by Raja Ram Jaiswalfrom his savings and then house was re-constructed in Assessment Year 1964-65 and 1965-66. The perusal of income-tax return and order of appeal does not show source of purchase and even the income of Raja Ram Jaiswal to acquire the property and construct five-storied building thereupon. In fact, Raja Ram Jaiswal, who was involved in the activities of smuggling could not show his legal source to acquire the property. It was otherwise found to be the case of undisclosed income. Two sources of income shown by Raja Ram Jaiswal remain without proof before the authorities below. Section 8 of the Act otherwise provides for presumption adverse to the detenueand his relatives. It cannot be nullified by the

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FPA-73-84/LKW/1996 & FPA-16-19/LKW/1997

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Page 11 of 15

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Assessment Order of which purpose is different than Section 6 of SAFEMA. The assessment order also does not show faith in the sources disclosed by the assesse, rather a serious comment has been made and otherwise in one assessment order itself Raja Ram Jaiswal had tried to disclose the source of income but it was found to be case of undisclosed income in the hands of Raja Ram Jaiswal. In view of the above and in absence of any documents along with sources to purchase the property, we do not find any illegality in the order of forfeiture.

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(4) House No.668, Muthiganj, Allahabad. This property

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is said to have been purchased by Raja Ram Jaiswal from one Shri Mahesh Prasad on 25.03.1961 for a sum of Rs.4500/- out of his personal savings. It would be necessary to indicate that all those properties purchased by Raja Ram Jaiswal are out of his personal savings without disclosing the source of income to acquire the same and otherwise this property does not find place in the assessment order. Thus, the argument of the learned counsel that legal sources were disclosed in the income tax return is not made out. The purchase of property is shown to be out of savings without disclosing to source of saving.

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(5) House No.672, Muthiganj, Allahabad. The property

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was purchased on 16.08.1971 for a sum of Rs.5000/- from

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FPA-73-84/LKW/1996 & FPA-16-19/LKW/1997

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Page 12 of 15

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Shri Muneerfollowed by its construction. The income-tax return, however, shows its purchase on 16.08.1961, thus the date of purchase is not matching and even if there is a typographical error, the legal source of its purchase has not been disclosed.

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(6) House No.269-B, Muthiganj, Allahabad. The property

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is said to have been purchased on 22.09.1966 for a sum of Rs.10,000/- but it is not part of income-tax return and assessment order and otherwise no document to show legitimate source of acquisition of property has been given.

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(7) House No.670-A, Muthiganj, Allahabad. The said

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property is said to have been purchased on 30.06.1966 for a sum of Rs.1,000/- out of the income from Bhang shop. The property aforesaid has not been shown in the assessment order dated 26.03.1969 and other than the assessment order aforesaid, there is no document on record which could rely by the appellant, rather they have relied on the assessment order dated 26.03.1969.

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(8) House Property in Chowk, Allahabad (9) Plot of Land 809-A, Mau Aima, Allahabad(10) Plot of Land at 185, Muthiganj, Allahabad and (11) House Property No.26, Crossthwit Road, Sammelan Marg, Allahabad.

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We do not find any document to show the source of the income for acquisition of the property. However, it is said to have been shown in the assessment year 1967-68 but does

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not show the source.

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FPA-73-84/LKW/1996 & FPA-16-19/LKW/1997

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Page 13 of 15

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11. The appellants have relied upon the income-tax returns wherea case of undisclosed income was found in the relevant assessment years, as can be seen from the orders. At this stage, it is necessary to clarify that scope of the Income-tax is different than of SAFEMA, 1976. The income-tax authorities make assessment of the income and therein they can find out even the element of undisclosed income and pass order with imposition of penalty. They do not remain concern much on the source which is otherwise required to be addressed under Section 6 of SAFEMA,1976. In the income-tax return, undisclosed income in the hands of Raja Ram Jaiswal was found and it would be if real source of income has not been disclosed. The presumption would be that it was out of the smuggling activities for which Raja Ram Jaiswal was detained by the State of UP.

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12. The respondents have forfeited the property after giving an opportunity of hearing. The show cause notice was to disclose source of acquisition of the property and it is only on the failure of the appellants that order of forfeiture of property was passed. At this stage, it is necessary to add that the income-tax return and other documents were not submitted before the Adjudicating Officer but have been submitted in the appeal without an application to accept the additional documents at the appellate stage. In any case, we have ignored the aforesaid and considered the documents which technically should not have been.

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FPA-73-84/LKW/1996 & FPA-16-19/LKW/1997

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Page 14 of 15

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13. The appellant has otherwise submitted the sale deed and other documents but failed to disclose the source of income to enter into the transaction for purchase of the property of which burden of proof lies on him. As per the pleadings, it is said to be out of the savings of Raja Ram Jaiswal without showing the source of savings. Thus, for all the reasons given above, we do not find any reason to cause interference in the order of the Competent Authority. The appeals fail and are dismissed.

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(JUSTICE MUNISHWAR NATH BHANDARI) CHAIRMAN

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(BALESH KUMAR) MEMBER

New Delhi

3^rd July, 2024

‘SRD’

FPA-73-84/LKW/1996 & FPA-16-19/LKW/1997