The Delhi High Court allowed NRI businessman facing investigation under Black Money Act, 2015 to travel abroad and observed that Look Out Circular ( LOC ) cannot be continued for long period without any cogent and valid reason.
The petitioner is an Indian citizen holding an Indian Passport and is a Non-Resident Indian living in Dubai, United Arab Emirates. It is stated that the Income Tax Department conducted search and seizure operations under Section 132 of the Income Tax Act, 1961 on the premises of the Suri Family of the Lalit Hotels Group, including the premises of the petitioner herein.
It was stated by the Counsel for the Petitioner that the Petitioner has not been summoned by the IT Department after 12.03.2022 and that the LOC against Ms. Jyotsana Suri has been quashed by the ACMM (Special Acts), subject to Ms. Jyotsana Suri furnishing an FDR of Rs.1 crore as a security for her future travels abroad.
The counsel further stated that the LOC against the Petitioner herein was opened on 22.01.2020 and though the LOCs have been periodically reviewed, no reason is discernible as to why the LOC against the Petitioner has still not been closed and that the Petitioner has not been called by the IT Department since 12.03.2022 which means that the physical presence of the Petitioner is no longer required for the investigation to continue.
The counsel for the Respondent stated that the Petitioner is involved in various offences under the Prevention of Money Laundering Act, 2002 and he has been instrumental in creating a structure of institutions/trusts in offshore jurisdictions for the benefit of the larger family and has indulged in diversion of unaccounted income/assets with the purpose of circumventing the jurisdiction of Indian revenue authorities.
Initially LOCs were issued against such individuals who were suspected of committing serious crimes and were indulged in anti national activities, terrorist activities, etc. However, after amendment, LOCs are now also opened at the instance of investigating agencies and banks against persons who have committed economic offences which involve offences under the Black Money Act and Prevention of Money Laundering Act
A Single Bench of Justice Subramonium Prasad observed that “An LOC cannot be permitted to continue for such a long period without there being any cogent and valid reason. The Petitioner has not been called for investigation since March 2022 and the counter affidavit filed by the Respondents does not indicate as to how the Petitioner has not cooperated with the investigation. In fact, material on record discloses that the petitioner has complied with the summons and has cooperated with the ongoing investigations against him by the IT Department.”
“In view of the fact that LOC against Ms. Jyotsana Suri has been quashed and also in view of the fact that the Petitioner has not been called for investigation by the Investigating Agency for the past two years and in the absence of any material which indicates that the Petitioner is likely to be called for investigation in the near future, this Court is inclined to quash the LOC opened against the Petitioner. Mere fact that information sought through the Foreign Tax and Tax Research from other jurisdictions such as the UAE is still awaited does not persuade this Court to keep the LOC against the Petitioner pending to curtail his fundamental rights” the Court added.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
