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2020 (12) TMI 668 - HC - Income TaxChallenging order u/s 230(1A) - Tax clearance certificate in case of traveling out of the country - circumstances on the basis of which the satisfaction is recorded - Section 230(1A) offered opportunity to an assessee to represent to the assessing officer that satisfactory arrangements had been made to defray the tax and other liabilities, if any, computed, in which case the necessary Tax Clearance Certificate (TCC) could well be issued by the officer permitting the assessee to travel out of the country - HELD THAT:- The satisfaction must be based on tangible material including (i) a history of previous incidents or events that establish the reluctance of the assessee to co-operate with the authorities or comply with statutory requirements, (ii) substantial outstanding arrears under tax enactments (iii) attempts by the assessee to evade the payment of the arrears (iv) difficulties faced by the authorities in collecting outstanding arrears or in ensuring appearance of the assessee in pending proceedings (v) nonco- operation on the part of the assessee in pending proceedings, to name a few illustrative situations. An order under Section 230(1A) cannot be arbitrary or capricious based simply on a mere assumption or presumption of the circumstances referred to therein. A general or overreaching perception of the authority that such circumstances exist is also not sufficient in the absence of more tangible material indicating a cause for alarm. In the present case, there is absolutely no material to indicate the existence of such circumstances as seen from the record. The request seeking approval from the superior authority must contain the details of the circumstances that justify such request. As perused the relevant file and find that it contains the reasons recorded by the respondent authority as well as the approval issued by the DGIT. Nowhere is there any mention any of the circumstances that would justify the invocation of Section 230(1A) as the reasons merely refer to voluminous assets found during search as well as material indicating connections abroad. These, by itself, would not justify invocation of the provision. Section 230(1A) vests substantial power upon an authority to restrain and restrict the mobility of a citizen and with such great power must come great responsibility. One must be conscious of the extent of the power available and ensure that the same is exercised only in those cases where tangible circumstances and evidences justify its deployment. The requirement of prior consent by the superior authority must not be mechanical or automatic but must be preceded by a proper examination as to whether such intrusive and extraordinary measures as advocated under Section 230(1A) are warranted in that specific case. After all, that is the purpose of seeking consent of a superior authority who is expected to examine the circumstances involved and ratify the reasons recorded by the authority. In the present case, both the reasons recorded by the authority as well as the consent of the DGIT are based only on the seizure of substantial assets and the alleged connection of the petitioner with various entities abroad. In my view, these materials do not justify invocation of the rigour of Section 230(1A) that call for evidences and material of a far greater degree and gravity. The impugned order dated 18.10.2019 is set aside and this writ petition allowed.
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