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TMI Blog2023 (3) TMI 1317X X X X Extracts X X X X X X X X Extracts X X X X ..... Principal Director of Income Tax (Inv.)-1, Income Tax Department and other concerned authorities of the Union of India i.e., the Secretary, Ministry of Finance, Secretary, Ministry of Home and the Foreigners Regional Registration Officer. 4. The brief facts in this case are that a search and seizure operation was conducted by the Income Tax department on 1st November, 2019 against the Petitioner. Thereafter, a LOC is stated to have been issued qua the Petitioner. After the search and seizure was conducted, proceedings were initiated against the Petitioner both under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (hereinafter 'Black Money, Act') and the Income Tax Act (hereinafter 'IT, Act'). 5. It is not disputed that as on date, the money demanded under the Black Money, Act, as per demand order/notice dated 8th June 2022, after notice was issued under Section 10 of the Black Money, Act, to the tune of Rs.7,99,300/- has been deposited by the Petitioner vide challan serial no.22942 dated 9th June 2022. 6. Insofar as the Income Tax department is concerned, initially summons were issued to the Petitioner. The Petitioner has complied with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the LOC. He further submits that, in the present case, there has been no FIR, which has been registered and no prosecution has been undertaken by the Income Tax department or under the Black Money Act, 2015. Further, the circular and the conditions imposed therein are also not complied with for continuation of the LOC. There is no valid ground made out for the LOC to be continued in this manner, which has resulted in restraining the Petitioner from traveling abroad. 11. Mr. Handoo further submits that the assessment having already been done and the amounts having been deposited by the Petitioner before the CIT (Appeals) as also under the Black Money Act, the LOC deserves to be quashed. He further relies upon paragraph (H), (I) & (J) of the Office Memorandum to argue that no case of a cognizable offence under the IPC or other Penal laws has been made out. No sanction has been granted for prosecution of the Petitioner and thus, the Petitioner's freedom to travel ought not to be curtailed by indefinitely extending the LOC. 12. On behalf of the Income Tax department, Mr. Kunal Sharma, ld. Counsel submits that both under the Black Money Act and Income Tax Act, prosecution can be lau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, with rigorous imprisonment for a term which shall not be less than three months but which may extend to two years and with fine. (2) If a person wilfully attempts in any manner whatsoever to evade the payment of any tax, penalty or interest under this Act, he shall, without prejudice to any penalty that may be imposable on him under any other provision of this Act, be punishable with rigorous imprisonment for a term which shall not be less than three months but which may extend to two years and shall, in the discretion of the court, also be liable to fine. Explanation.-For the purposes of this section, a wilful attempt to evade any tax, penalty or interest chargeable or imposable under this Act or the payment thereof shall include a case where any person- (i) has in his possession or control any books of account or other documents (being books of account or other documents relevant to any proceeding under this Act) containing a false entry or statement; or (ii) makes or causes to be made any false entry or statement in such books of account or other documents; or (iii) wilfully omits or causes to be omitted any relevant entry or statement in such books of account ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , for the purposes of granting sanction under sub-section (1) or compounding under sub-section (2), so as to impart greater efficiency, transparency and accountability by- (a) eliminating the interface between the income-tax authority and the assessee or any other person to the extent technologically feasible; (b) optimising utilisation of the resources through economies of scale and functional specialisation; (c) introducing a team-based sanction to proceed against, or for compounding of, an offence, with dynamic jurisdiction. (5) The Central Government may, for the purpose of giving effect to the scheme made under sub-section (4), by notification in the Official Gazette, direct that any of the provisions of this Act shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in the notification: Provided that no direction shall be issued after the 31st day of March, 2022. (6) Every notification issued under sub-section (4) and sub-section (5) shall, as soon as may be after the notification is issued, be laid before each House of Parliament.] Explanation.-For the removal of doubts, it is hereby declared that the power ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ginating agency must keep reviewing the LOCs opened at its behest on a quarterly and annual basis and submit the proposals to delete the LOC, if any, immediately after such a review. Clearly, the counter affidavit does not state that such a review has been undertaken either on a quarterly basis or annual basis and the reasons why the LOC is being continued against the Petitioner. The Office Memorandum also clearly records categorically that if the person is no longer wanted by the originating agency, the LOC cannot be continued. Thus, the spirit of the OM is to ensure that LOCs are not continued without periodic application of mind by the Originating Agency. 17. In the present case, the following facts are borne in mind by this Court- (i) The Petitioner has participated in the investigation of the Income Tax department and his statements stand recorded. (ii) The assessment is already completed and the demand has been raised. (iii) 20% of the demand has already been deposited before the CIT (Appeals) and the proceedings are now pending before the CIT (Appeals). (iv) The proceedings under the Black Money Act have been concluded and the demanded amount has been paid. (v) No ..... X X X X Extracts X X X X X X X X Extracts X X X X
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