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CS Executive · Economic, Commercial and Intellectual Property Laws · Overseas Direct Investment

Rohan is found to have acquired foreign security situated outside India with aggregate value exceeding the threshold prescribed under the proviso to Section 37A(1). Which statement is correct under Section 13(1A) to 13(1D)?

Rohan faces a penalty up to three times the sum involved and confiscation of equivalent value in India, plus possible imprisonment up to five years and fine. A court can take cognizance only on a written complaint by an officer not below the rank of Assistant Director.

  1. APenalty is limited to Rs 2 lakh and no prosecution is possible
  2. BPenalty up to three times the sum involved and confiscation of equivalent value situated in India; imprisonment up to five years with fine may also follow, with court cognizance only on a written complaint by an officer not below Assistant DirectorCorrect
  3. COnly a penalty of Rs 5,000 per day applies
  4. DCourts may take cognizance suo motu of the imprisonment offence

Explanation

Section 13(1A) gives penalty up to three times the sum and confiscation of the equivalent value in India. Section 13(1C) adds imprisonment up to five years and fine. Section 13(1D) bars cognizance except on written complaint by an officer not below Assistant Director, so suo motu cognizance is wrong.

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