In a recent judgment, the Delhi High Court directed the trial court to release the Rs. 25 lakh Fixed Deposit Receipt (FDR) to the petitioner, citing the absence of a fresh Look-Out Circular (LOC).
The petitioner Ashutosh Sharma invoked the supervisory jurisdiction of the Court under Article 227 of the Constitution of India. The case involved a previously issued Look Out Circular (LOC) by the Income Tax Department against the petitioner, which the petitioner claimed was issued illegitimately. The petitioner sought the cancellation of the LOC and requested permission from the Trial Court to travel abroad.
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The Trial Court, specifically the Court of Addl. Chief Metropolitan Magistrate (Special Acts), Central District, Tis Hazari Court, Delhi, considered the request on May 31, 2019. The LOC was rescinded, and permission was granted to the petitioner to travel abroad. The Court stipulated that the petitioner must submit his travel itinerary and stay details to the Assessing Officer and the Court before leaving the country. Additionally, the petitioner was directed to deposit a Fixed Deposit Receipt (FDR) of Rs. 25 lakhs and to join the investigation as required by the Assessing Officer.
Subsequently, the petitioner applied to the same court for the release of the FDR, but the request was denied. The Court stated that the FDR was a condition for rescinding the LOC and not solely for travel purposes. The impugned order, dated June 4, 2024, clarified that the FDR deposit was integral to the cancellation of the LOC and dismissed the application.
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In the present proceedings, the Income Tax Department, represented in Court, confirmed that no further Look Out Circular had been issued against the petitioner. The Court, referencing the earlier order permitting the petitioner to travel abroad, noted that the FDR was specifically tied to this permission. Given that the LOC had been rescinded and there was no new LOC, the Court found no justification for retaining the FDR.
Justice Manoj Jain of the Delhi High Court, allowed the petition and directed the Trial Court to release the FDR of Rs. 25 lakhs to the petitioner, after which the petition was subsequently disposed of.
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