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TMI Blog2020 (1) TMI 680X X X X Extracts X X X X X X X X Extracts X X X X ..... uly considered. AO found that the whole amount was illegally raised under the collective investment scheme without obtaining registration from SEBI after coming into force of Regulation 4(2)(t) of the PFUTP Regulations, 2003 during the period of 06.09.2013 to 15.06.2014 the AO found that the amount so realised was a profit for the purpose of Section 15HA. AO further found that the profit made by the appellants was at the cost of the investors. We are of the opinion that the factors contemplated under Section 15J of the SEBI Act was duly considered and we do not find any infirmative in the reasoning adopted by the AO. On the question whether the appellants have violated Regulation 4(2)(t) of the PFUTP Regulations and or on the question wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l is, that the appellants are directors in a company known as PACL Limited which was engaged in mobilizing funds from the general public by sponsoring various schemes which were none other than a Collective Investment Scheme and which were being carried out without obtaining a registration from SEBI as required under the SEBI Act, 1992. Pursuant to a show cause notice, SEBI issued directions under Section 11B of the SEBI Act dated 22.08.2014 holding that the schemes floated by the company, its directors and its promoters was nothing but a Collective Investment Scheme ( CIS ) and which was not registered under the SEBI Act. SEBI accordingly directed the company, its directors and promoters to wind up the collective investment schemes and ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the company filed appeals before this Tribunal which was decided together by an order dated 27.10.2016. This Tribunal quashed the impugned orders passed by SEBI and directed to pass fresh orders on merits and in accordance with law after computing the profits, if any. 5. Pursuant to the order of this Tribunal the AO issued a fresh show cause notice dated 18.01.2017 alleging that the company and other appellants had mobilized fund to the tune of ₹ 2686,25,54,797/- (Rupees Two Thousand Six Hundred Eighty Six Crore Twenty Five Lakh Four Thousand Seven Hundred and Ninety Seven only) during the period of 01.09.2013 to 15.06.2014 which was a collective investment schemes, without obtaining registration from SEBI. It was alleged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... collected the monies. The said collection of monies cannot be termed illegal nor can it be held that it to be an unlawful gain or that the appellants have made illegal profits. Attention was also invited to an order of the Delhi High Court wherein after considering the report, the Court allowed the company to execute the sale deeds in favour of the customers which fact was also not taken into consideration while passing the impugned order. The learned counsel contended that there is no finding that the appellants had made profits from the schemes and, in the absence of any finding on this aspect the penalty order could not have been imposed under Section 15HA of the SEBI Act. It was further contended that the amount realised under the coll ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relating to securities. The penalty shall not be less than five lakh rupees but may extend to twenty five crore rupees or three times the amount of profits made out of such unfair trade practices whichever is higher. In the instant case, SEBI found that a sum of ₹ 2686,25,54,797/- (Rupees Two Thousand Six Hundred Eighty Six Crore Twenty Five Lakh Four Thousand Seven Hundred and Ninety Seven only) was collected illegally under the scheme which was a collective investment scheme and since it was not registered the entire amount so collected was an unlawful gain/profit earned by the appellants and other entities. The AO accordingly imposed the aforesaid sum as penalty. 9. In our view, the collection so made by the appellants an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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