LOC issued by Income Tax Dept due to Assessee Lacks of Contact: Bombay HC lifts Travel Bans on Assessee to Accompany Pregnant Daughter in Law [Read Order]

The Bombay High Court lifted the travel ban on the assessee in the case of the Look Out Circular (LOC) issued by the Income Tax Department due to the lack of contact since she had to accompany her pregnant daughter-in-law to visit the doctor.

Aarti Ramesh Chaurasia, the Petitioner encountered LOC  a when she attempted to travel overseas on 30th May 2023. The LOC was issued at the instance of the 1st Respondent, Deputy Director of Income Tax.

The Petitioner is the wife of the promoter of the ARC group. She is also independently assessed for tax. The tax authorities carried out a search and seizure of ARC entities and promoters, including the present Petitioner, on 15th February 2022. LOCs were indeed issued against inter alia the Petitioner and others in his family.

The Income Tax department stated that there were no pending proceedings with the authority which triggered the LOC. The assessing officer was informed about the position of the LOC and it was he who said that the LOC will continue till 31st March 2024, i.e., the due date for completion of assessment proceedings.

There was an assessment proceeding that does not always or invariably justify the issuance of a LOC, nor does it justify preventing a Petitioner from travelling overseas in the exercise of well-settled fundamental rights.

A division bench comprising Justice G.S. Patel & Justice Neela Gokhale stayed the LOC until 10th September 2023 since the Petitioner proposes to travel to Dubai to accompany her pregnant daughter-in-law to the doctor.  The permission was subject to usual conditions.

Further held that the immigration authorities at all ports of departure including all airports will permit the Petitioner passage and permit the Petitioner to take his flights out of the country irrespective of whether the Income Tax Department has notified them or not and irrespective of whether this suspension is noted in the immigration authorities’ systems or not.

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