TMI Blog2022 (9) TMI 1266X X X X Extracts X X X X X X X X Extracts X X X X ..... se and to correct or controvert the material sought to be relied upon against him. It is essential for a show cause notice to indicate the precise scope of the notice and also to indicate the points on which the recipient of the show cause notice give a reply. In our view, there is nothing in the show cause notice to give any indication as to what are the allegations to which petitioner should furnish a statutory explanation. In paragraph 9 of the show cause notice, it is stated that without obtaining the prior permission of RBI, petitioner has repatriated the sale proceeds to M/s Salvation Army but the provisions relied upon in the show cause notice by respondent no.2 has nothing to do with repatriation of any sale proceeds. Further, Regulation 8 of the said Regulation only provides save as otherwise provided in the act or regulations no person resident outside India shall transfer any immovable property in India . It does not refer to any acquisition. As could be seen from the show cause notice itself the admitted position is Mrs. Meerabai Dawson held immovable property in India, which she inherited from her parents, who were resident in India. The Executors of the Will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vour of one Mr. Sameer Tapia and two erstwhile associates of petitioner firm empowering them to execute the sale of the Indian properties forming part of the Indian estate of Mrs. Meerabai Dawson. One of the major property Mrs. Meerabai Dawson inherited from her parents, who were resident Indians, was a landed property at Adayar, Chennai. It was found that there were many encroachers in the said property. To cut the matter short, at the time of selling the property, petitioner settled with all the encroachers and that left finally surplus of about Rs.5,01,47,271/- (Rs.4,65,00,000 + Rs.36,47,271/-) equivalent to pound sterling 651,588/- at exchange rate then prevailing. Petitioner deposited the sale consideration of immovable properties and credits of Mrs. Meerabai Dawson into its clients account and on or about 26th February 2008 transferred the amount into the savings bank account that petitioner had opened in the name of Executors to the Will of Mrs. Meerabai Dawson. Petitioner thereafter repatriated the total sum of Rs.5,01,47,271/- in two tranches, a sum of Rs.4,65,00,000/- on 3rd November 2009 and Rs.36,47,271/- on 8th September 2010 to the account of M/s Salvation Army, Un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le Property in India) Regulations 2000 read as under: Prohibition on transfer of immovable property in India : Save as otherwise provided in the Act or regulations, no person resident outside India shall transfer any immovable property in India. 5. We are at a loss to understand how petitioner has contravened these provisions. First of all Section 6(3) of FEMA is only an enabling provision which provides that without prejudice to the generality of the provisions of sub-Section (2) of Section 6 of FEMA, RBI may by regulation, prohibit, restrict or regulate, and under clause (i), acquisition or transfer of immovable property in India, other than a lease not exceeding five years, by a person resident outside India. 6. According to respondent no.2, RBI has prohibited, restricted and/or regulated the acquisition of transfer of immovable property in India by a person resident outside India. As per the said Regulation 8 of FEMA Regulations, the provision relied upon by respondent no.2, says save as otherwise provided in the Act or regulations, no person resident outside India shall transfer any immovable property in India . That has nothing to do with repatriation of any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds which had prompted the appropriate authority to arrive at prime facie conclusion that the power under Section 269UD(1) of the Act was required to be exercised and the property should be compulsorily purchased. The Division Bench of Gujarat High Court in Om Shri Jigar Association vs. The Union of India and others [(1995) 80 Taxman 514/1994] 209 ITR 608 at paragraphs 7,8 and 9 held as under :- 7. In our view, considering the findings given above, it is not necessary to deal with the aforesaid contention exhaustively. However, it should be noted that issuance of a show-cause notice is not an empty formality. Its purpose is to given a reasonable opportunity to the affected persons to contend that the apparent consideration as per the agreement to sell is the market price or that there is no undervaluation because of peculiar facts. Therefore, before taking any action under section 269UD(1) of the Income-tax Act, the appropriate authority should give to the person likely to be affected by the order proposed to be made a notice of the action intended to be taken, inform him about the material on the basis of which the appropriate authority proposes to take action for pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... once assail one's mind are many : In what way was the explanation of the appellant unsatisfactory ? Which part of the appellant's explanation was so unsatisfactory ? On what materials did the Government think that the appellant's explanation was unsatisfactory ? It is to our mind essential for a 'Show-Cause-Notice' to indicate the precise scope of the notice and also to indicate the points on which the officer concerned is expected to give a reply. 9. The same would be the position here. It would be difficult for the transferor and the transferee to show cause as to why the property should not be compulsorily purchased or to point out that there is no undervaluation of the property or even if there is undervaluation, it is because of the peculiar facts regarding the property. (Emphasis Supplied) It is essential for a show cause notice to indicate the precise scope of the notice and also to indicate the points on which the recipient of the show cause notice give a reply. 8. In our view, there is nothing in the show cause notice to give any indication as to what are the allegations to which petitioner should furnish a statutory explanation. In p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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