Dismissed

FPA-PMLA-6352/KOL/2023 & FPA-PMLA-6353/KOL/2023 of Shri Suresh Kumar Banthia & Shri Jitesh Kumar Banthia v. The Deputy Director, Directorate of Enforcement, Kolkata

ATFP1 May 2025FPA-PMLA-6352/KOL/2023 & FPA-PMLA-6353/KOL/2023

Case brief

AI extract

What is this about?

The tribunal disposed of appeals challenging an adjudicating authority's order retaining seized documents and freezing assets. The court held there is no case for interference as the appellants were facing a separate prosecution and possessed relevant information, though the order remains subject to the final outcome of the prosecution.

What did the court decide?

Appeals disposed of without causing interference in the impugned order of seizure and freezing.

FPA-PMLA-6352/KOL/2023 & FPA-PMLA-6353/KOL/2023 of Shri Suresh… — Money Laundering | ATFP (2025)

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APPELLATE TRIBUNAL UNDER SAFEMA AT NEW DELHI

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MP-PMLA-12693/KOL/2023 MP-PMLA-12692/KOL/2023 FPA-PMLA-6352/KOL/2023 Shri Suresh Kumar Banthia … Appellant FPA-PMLA-6353/KOL/2023 Shri Jitesh Kumar Banthia … Appellant

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Versus

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The Deputy Director, Respondent Directorate of Enforcement, Kolkata

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Advocates / Authorized Representatives who appeared:

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For the Appellant(s) : Mr. P. Ojha, Advocate Ms. Deepansha Saini, Advocate For the Respondent(s) : Mr. Himanshu Jain

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CORAM

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JUSTICE MUNISHWAR NATH BHANDARI : CHAIRMAN SHRI V. ANANDARAJAN : MEMBER

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ORDER

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01.05.2025

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These appeals challenge the order 10.04.2023 passed by

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the Adjudicating Authority to permit retention of freezing of the bank amount, mutual funds, shares and securities in the hands of the appellants apart from the records seized during the course of search which largely arethe digital devices like

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FPA-PMLA-6352-6353/KOL/2023 Page

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Mobile Phone, PEN Drive, iphoneand loose sheets having prints out of the email.

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2. The present case pertains to the predicate offence under Section 51 of Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 ( in short “ the Act of 2015 ”). The complaint for it was filed by the Income Tax Department before the Court of Chief Metropolitan Magistrate, Calcutta against both the appellants and finding offence under Section 51 of the Act of 2015 to be predicate offence, the search was conducted and thereupon the order of seizure of the documents and freezing of the movable assets was passed.

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3. The allegation against the appellants was that they are the beneficial owners of the Off-shore Company in the name of M/s BlueBell Express Limited registered in British Virgin Islands along with its bank accounts with UBS AG, Singapore. The Assessment Order was passed under Section 10(3) of the Act of 2015 on 19.03.2020 against both the appellants for the Assessment Year 2018-19.

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4. The information as received from British Virgin Islands about M/s BlueBell Express Limited were:-

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(i) The appellants, Shri Suresh Kumar Banthia and Shri Jitesh Kumar Banthia had been the beneficial owners of BlueBell Express Limited.

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(ii) The Nominee Services Agreement revealed that the shares were held on behalf of the appellants for the corporate entities, namely, Execorp Limited and Sharecorp Limited with Financecorp Limited.

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(iii) The Assessment Order of the Income Tax Department authority further revealed certified information regarding bank account of BlueBell Express Limited, Singapore in which Shri Suresh Kumar Banthia and Jitesh Kumar Banthia had been the attorney of the beneficial owners of all the assets deposited in the bank.

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(iv) Name, date of birth, nationality, permanent address, identity number, country, copies of passports of Shri Suresh Kumar Banthia and Shri Jitesh Kumar Banthia, account opening forms containing specimen signatures which was provided as due diligence were also obtained from Singapore authorities.

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(v) Statement of account from the period from June, 2008 to March, 2009 was gathered from Singapore authorities was showing various credit entries in the bank statement of BlueBell Express Limited.

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5. The appellants failed to furnish information relating to the financial interest in the entities located outside India held by them as beneficial owners. Further, certified copy of the KYC document and statement of the bank account No. 171412 with UBS AG Singapore gathered from the Singapore authorities by the Income Tax Department carried their signatures as well as the photocopies of their passports as due diligence documents.

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6. The Income Tax Department, thus, calculated Rs.13,09,09,804/as undisclosed foreign assets and accordingly imposed tax under the Act of 2015 to the sum of Rs.2,80,89,971/- and Rs.2,78,93,607/- on the appellants under Section 13 of the Act of 2015.

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7. The search under Section 17(1) of the Prevention of Money-Laundering Act, 2002 ( in short “ the Act of 2002 ”) was conducted on 18.10.2022 on different premises of the

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appellants which include the residential and office premises. The search operation was conducted even on 07.11.2022 where the Demat Accounts held in the name of the appellants maintained with Ashika Stock Broking Limited was found. As a result of search, some incriminating documents / records and electronic devices including mobile phones, cash were seized apart from the bank accounts, Demat accounts, mutual fund folios and were frozen.

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8. The Adjudicating Authority has allowed retention of the seized records and the frozen movable properties. Aggrieved by the aforesaid, the appellants have preferred these appeals to challenge the order.

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9. Ld. Counsel for the appellants submitted that the impugned order has been passed in violation of the principles of natural justice and the provisions of the Act of 2002. The appellants were not served with the complaint of the Income Tax Department and in the absence of service of the complaint, the appellants could not defend their case effectively and otherwise the respondent were under obligation to supply copy of the complaint of the Income Tax Department on the basis of which they initiated the case.

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10. It was, further, submitted that the respondent even failed to supply relied upon documents of complaint by the Income Tax Department along with reasons to believe. Thus, in absence of copy of the documents relied by the respondent, the appellants could not defend their case effectively and for that reason also the impugned order deserves to be set-aside.

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11. Ld. Counsel for the appellants did not raise any other issue than referred to above, though, they were having opportunity to raise any other legal or factual issue, but the Counsel for the appellants restricted their arguments to the extent indicated above.

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12. Ld. Counsel for the respondent contested the appeals and submitted that the case is not made out to cause interference in the impugned order. It is for the reason that the appellants are facing prosecution on a complaint by the Income Tax Department to the Metropolitan Magistrate. When the appellant is facing the complaint, the copy of it was made available to him by the Income Tax Department but to raise hyper technical objection, the issue of non-supply of copy of

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the complaint and relied upon documents (RUD) has been raised.

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13. The perusal of the notice under Section 8(1) of the Act of 2002 dated 01.12.2022 would otherwise reveal that copy of the reasons to believe recorded by the Adjudicating Authority was served to the appellant with a direction that he may obtain certified copy of the notice by depositing the required fee with the Registrar, Adjudicating Authority, PMLA. The appellant in response to it prayed for copy of the relied upon documents and a letter for it was sent on 17.12.2022. The appellant has alleged non-receipt of relied upon documents based on which the reasons of believe were recorded. It is with the statement that the earlier a letter was sent by the appellant on 08.12.2022 for the copies of the application under Section 17(2) of the Act apart from the copy of relied upon document.

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14. The material available on records and more specifically the letter dated 17.12.2022 of the appellant itself reveal that the copies of the some of the relied upon documents had been served by the appellant on 15.12.2022. However, objection was that few other documents relied upon have not been

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supplied. It is without indicating the details of the documents alleged to have not been served. In any case, first plea taken by the appellant is of non-service of complaint of the Income Tax Department which said to have been relied upon for causing the reasons to believe under Section 8(1) of the Act of 2002. The respondent have contested the issue aforesaid and submitted that complaint was available with the appellant as he was facing the prosecution in the hands of the Income Tax Department on the subject matter, yet to delay the proceedings, copy of the complaint was sought.

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15. In the light of facts given above, we do not find that the appellant was not served documents relied upon by the respondent. The appellant has alleged that the documents relied by the Income Tax Department in the complaint should have been served ignoring the fact that in the instant case, the proceeding has been initiated by the Enforcement Directorate and they can supply the documents available with them and relied upon and not those documents with the Income Tax Department. The appellant is, otherwise, facing the prosecution lodged by the Income Tax Department and thus Counsel for the appellant could not show that the relevant material and documents apart from the information was not

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given to him in the prosecution lodged against the appellant. It was, otherwise, admitted by the appellant that few documents relied upon were served immediately after an application. The admissionto that effect exists in the letter sent by the appellant to the Adjudicating Authority on 17.12.2022. The appellant‟s admission is that some of the documents relied by the respondent have not been served. If the appellant wished to get the documents relied upon by the Income Tax Department in the complaint it could not have been demanded from the respondent in absence of the prosecution lodged by them.

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16. It is otherwise a fact that records seized from the appellants to show their connection of Off-shore Company, no argument was made that the appellants have no connection with the Off-shore entity at Singapore, rather, the appellant was found directly connected with the Off-shore Company having bank accounts causing offence under Section 51 of the Act of 2015.

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17. The appellant had given a letter to the Registrar, Adjudicating Authority to inform that the specific relied upon document based on which reasons to believe has been

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recorded and search was conducted followed by an application under Section 17(4) of the Act of 2002 has not been supplied. A reference of the earlier letter dated 08.12.2022 to provide a copy of the application under Section 17(4) of the Act of 2002 and copies of the relied upon documents which were not supplied along with the Show Cause Notice were given with a request to supply a copy of the documents not served by the respondent. It is, however, with the admission that in response to the letter dated 08.12.2022 copy of the some of relied upon documents were supplied to the appellant on 15.12.2022 i.e. after 7 days of receipt of the letter. However, many documents werenot supplied. It was submitted that certain vital documents based on which complaint was filed by the Income Tax Department were not supplied in ignorance of the fact that the copy of the Complaint was available with the appellant facing the prosecution and whatever documents relied by the respondent had been served to the appellant. The appellant was otherwise having the information on service of the copy of the reasons to believe served to him about his involvement in the Off-shore company and the bank account having photographs, date of birth and all relevant personal details of the appellants. No defence to the aforesaid was given

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or even denied with proof that they have been unnecessarily implicated. In fact, finding a case of black-money, the Income Tax Department has already made assessment of the tax, thus, the appellant was having all required information but for the sake of making a case for violation of the principles of natural justice, the issue was framed about non-supply of relied upon documents. The appellant had otherwise noted that following information was received from the competent authority of the British Virgin Islands which were as under:

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(a) Shri Suresh Kumar Banthia and Shri Jitesh Kumar Banthia had been the beneficial owner of Blue bell express Limited.

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(b) Registrar of Directors and shareholders were provided as per which company's Directors and shareholders are corporate entities, namely, Excorp Limited and Sharecorp Limited with financecorp Limited respectively, who as per Nominee services Agreement held shares on behalf of Suresh Kumar Banthia and Jitesh Kumar Banthia

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(c) Certified copy regarding bank account No 171412 of Blue Bell Express Limited maintained with UBS Singapore in which Suresh Kumar Banthia and Jitesh Kumar Banthia had been the attorney and beneficial owners of all the assets deposited in the said Bank Account

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(d) Name, Date of Birth, Nationality, Permanent address Identity Number, Country, copies of passports of Suresh Kumar Banthia and Jitesh Kumar Banthia account opening forms containing specimen signatures which provided as due diligence were also obtained from Singapore Authorities.

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(e) Statement of account from the periods June 2008 to March 2009 was gathered from Singapore Authorities and from the perusal of which various credit entries has been found in bank account statement of Blue Bell Express Limited .

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18. The appellant, however, prayed for supply of the application under Section 17(4) of the Act of 2002, reasons to believe recorded vide retention order and reasons to believe recorded in reference to ECIR in ignorance of the fact that copy of the reasons to believe was served along with the notice as per the provisions of the Act of 2002 and otherwise the appellant prayed for the official correspondence with the Income Tax Department not forming the part of the application to seek further retention of the freezing of the bank account and seizure of the documents. The appellant has otherwise faced prosecution at the instance of the Income Tax Department and was even assessed with imposition of tax for contravention of the Act of 2015.Thus, application by the appellant for service of documents was designed only to delay or otherwise frustrate the proceedings in view of the fact that the appellant had no defence against the complaint sent by the Income Tax Department to which even the appellant is

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facing the prosecution and otherwise Assessment Order has been passed against him.

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19. In the light of the above, we don‟t find a case to cause interference in the impugned order of seizure of documents and freezing of bank accounts and also of the cash. However, the order would remain subject to final outcome of the prosecution case against the appellants. If theyare discharged therein, the documents and the movable assets can be released in their favour.

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20. The appeals are disposed of with the aforesaid without causing interference in the impugned order.

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(Justice MunishwarNath Bhandari) Chairman

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(V. Anandarajan) Member

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NEW DELHI 01.05.2025 „MB‟

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