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TMI Blog2019 (4) TMI 2173X X X X Extracts X X X X X X X X Extracts X X X X ..... BI on its parent company PVP Ventures Ltd., a listed company and appellant in Appeal No. 450 of 2018, for the period September 01, 2009 to October 30, 2009. Pursuant to the said investigation, it was found that the appellant had violated Section 12A(d) and (e) of the Securities and Exchange Board of India Act, 1992 ('SEBI Act' for short) and Regulation 3(i) and (ii) read with Regulation 4 of SEBI (Prohibition of Insider Trading) Regulations, 1992, pursuant to which the Adjudication Officer of SEBI after making necessary enquiry and, after providing an opportunity of hearing, passed an order dated March 27, 2015 imposing a penalty upon the appellant. The appellant being aggrieved filed an appeal before the Securities Appellate Tribunal which was disposed off. Thereafter the appellant filed a SLP before Supreme Court which was dismissed on September 14, 2018. 3. Thus, the penalty imposed by the Adjudicating Officer became payable. The Recovery Officer issued a certificate dated October 26, 2018 under section 28A of the SEBI Act read with Section 222 of the Income Tax Act, 1961 certifying that a sum of Rs. 21,45,53,425/- was payable which amount included the penalty imposed by the Ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it would be appropriate to quote section 28A of SEBI Act (to the extent relevant) and Section 220 of the Income Tax Act, 1961, which read thus:- Section 28A of SEBI Act, 1992 w. r. e. f. 18/07/2013 "Recovery of amounts. 28A. (1) If a person fails to pay the penalty imposed by the adjudicating officer or fails to comply with any direction of the Board for refund of monies or fails to comply with a direction of disgorgement order issued under section 11B or fails to pay any fees due to the Board, the Recovery Officer may draw up under his signature a statement in the specified form specifying the amount due from the person (such statement being hereafter in this Chapter referred to as certificate) and shall proceed to recover from such person the amount specified in the certificate by one or more of the following modes, namely:- (a) attachment and sale of the person's movable property; (b) attachment of the person's bank accounts; (c) attachment and sale of the person's immovable property; (d) arrest of the person and his detention in prison; (e) appointing a receiver for the management of the person's movable and immovable properties, and fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing with the day on which the amount is paid : Provided that, where as a result of an order under section 154, or section 155, or section 250, or section 254, or section 260, or section 262, or section 264 or an order of the Settlement Commission under subsection (4) of section 245D, the amount on which interest was payable under this section had been reduced, the interest shall be reduced accordingly and the excess interest paid, if any, shall be refunded : Provided further that in respect of any period commencing on or before the 31st day of March, 1989 and ending after that date, such interest shall, in respect of so much of such period as falls after that date, be calculated at the rate of one and one-half per cent for every month or part of a month. (2A) Notwithstanding anything contained in sub-section (2), the Chief Commissioner or Commissioner may reduce or waive the amount of interest paid or payable by an assessee under the said sub-section If he is satisfied that- (i) payment of such amount has caused or would cause genuine hardship to the assessee; (ii) default in the payment of the amount on which interest has been paid or was payable under the said sub- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee as not in default in respect of such part of the tax until the prohibition or restriction is removed. Explanation.-For the purposes of this section, income shall be deemed to have been brought into India if it has been utilised or could have been utilised for the purposes of any expenditure actually incurred by the assessee outside India or if the income, whether capitalised or not, has been brought into India in any form." 7. The object and intention of inserting Section 28A to the SEBI Act was to provide a mechanism for recovery of the amount due to SEBI. Instead of prescribing an independent mechanism for collection and recovery of the amounts due to SEBI, the legislature deemed it fit to follow the mechanism provided under the Income Tax Act and accordingly inserted Section 28A to SEBI Act wherein the provisions of the Income Tax Act relating to collection and recovery have been incorporated. Thus, the legislature by inserting Section 28A to SEBI Act has provided that if a person fails to pay the amounts referred in Section 28A, then the Recovery Officer shall draw up a statement/certificate and proceed to recover the amounts specified in the certificate by a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is no substantive provision in the SEBI Act to demand interest and hence, the RO, could not demand interest for the delayed payment cannot be accepted." 9. The order of the Tribunal holding that no separate notice is required to be issued under Section 28A read with 220 of Income Tax Act was affirmed by the Supreme Court in the appeal filed by Dushyant N. Dalal. 10. We further find that the Adjudicating Officer in its order while imposing penalty had also directed the appellant to pay the penalty amount within 45 days. In our view this order of penalty would also be deemed to include a notice of demand and thus a formal requirement for issuance of a separate notice of demand pursuant to the order of penalty is no longer required. Thus, the contention raised by the appellant is not sustainable and is rejected. 11. The contention that interest was impliedly waived when the penalty was reduced by the Tribunal or that interest cannot be imposed with retrospective effect is patently misconceived. Hon'ble Supreme Court while affirming the judgment of this Tribunal in Dushyant Dalal's matter held as under:- "We agree with the aforesaid statement of the law. It is clear, there ..... X X X X Extracts X X X X X X X X Extracts X X X X
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