UoI (D.L.A.) ED Vs Alok Bhartia & Anr (Appellate Tribunal Under SAFEMA At Delhi)
From Geneva to Nowhere – FEMA Tribunal Finds ED’s Case Built on Missing Evidence & Retractions No Proof, No FEMA Breach- HSBC Geneva Account Allegation Fails –
The Appellate Tribunal under FEMA, New Delhi, dismissed the appeal filed by the Enforcement Directorate (ED) against Shri Alok Bhartia & Smt. Alpana Bhartia, upholding the Adjudicating Authority’s order dated 16.10.2018 that had dropped proceedings u/s 4 of FEMA r/w Regulation 3 of the Foreign Currency Accounts Regulations, 2000
The case originated from an Income-Tax search on 25.08.2011 at M/s East India Commercial Co. & residences of the Bhartias, revealing alleged undisclosed deposits of USD 13,50,004 (≈ ₹5.98 crore) in a joint HSBC Geneva account. During the search, Alok Bhartia initially admitted to the account & offered ₹5.98 crore as income “to buy peace” but later retracted his statement (05.09.2011), claiming coercion. The IT Department added this sum to his 2007-08 income; the ITAT confirmed the addition in 2017, though related criminal complaints under ss. 276C, 276D & 277 were dismissed by the Economic Offences Court for lack of proof
ED alleged that maintaining this undisclosed foreign account without RBI approval violated s. 4 of FEMA. However, the Tribunal found that (i) the HSBC statement was never seized from the Bhartias’ premises, (ii) it was a mere photocopy without authentication as required by s. 39 FEMA, & (iii) ED had conducted no independent investigation, relying solely on IT materials.
