Income Tax Dept Administrative Delay in Gathering Foreign Information Cannot Restrict Right to Travel Abroad: Delhi HC [Read Order]
The High Court held that Income Tax Department’s delay in gathering foreign information cannot restrict a person’s right to travel abroad when no proceedings or tax demand is pending.
![Income Tax Dept Administrative Delay in Gathering Foreign Information Cannot Restrict Right to Travel Abroad: Delhi HC [Read Order]](https://images.taxscan.in/h-upload/2026/03/04/2127756-foreign-informationjpg.webp "Income Tax Dept Administrative Delay in Gathering Foreign Information Cannot Restrict Right to Travel Abroad: Delhi HC [Read Order]")
In a recent ruling, the Delhi High Court held that the Income Tax Department’s delay in collecting foreign information cannot restrict a person’s right to travel abroad especially when no case or tax demand is pending. Gaurav Dalmia and Mridu Hari Dalmia challenged the Lookout Circulars issued against them. A search was conducted at their residence and business premises on...
In a recent ruling, the Delhi High Court held that the Income Tax Department’s delay in collecting foreign information cannot restrict a person’s right to travel abroad especially when no case or tax demand is pending.
Gaurav Dalmia and Mridu Hari Dalmia challenged the Lookout Circulars issued against them. A search was conducted at their residence and business premises on 17 March 2021. After that, in April or May 2021, a Lookout Circular was issued without informing them. Their request to remove the travel restriction was rejected in June 2021.
The petitioners stated that they fully cooperated with the Income Tax Department. Assessment orders were later passed, but these were partly allowed by the Commissioner (Appeals) and finally quashed by the Income Tax Appellate Tribunal. As on the date of hearing, no proceedings were pending and no tax demand was outstanding.
The petitioners argued that even after the cases were over, the Lookout Circular continued, and they had to take permission every time they wanted to travel abroad. They said this violated their fundamental rights.
The Department argued that the Lookout Circular was valid and that references were made to foreign countries to check if the petitioners had assets outside India. Since information from foreign authorities was still awaited, the restriction should continue.
The Division Bench of Justice Dinesh Mehta and Justice Vinod Kumar observed that all tax proceedings had already ended and nothing was pending. The court explained that if the Department is not able to get information from foreign countries for many years, the petitioners’ rights cannot be kept suspended for unlimited time.
The court set aside the Lookout Circulars but it directed the petitioners to give an undertaking that they will not transfer or create third-party rights in their foreign assets without informing the Department at least 30 days in advance. The petitions were allowed.
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