Delhi HC recalled ‘Look Out Circular’ issued against CA as he co-operated in proceedings initiated against him

Lakshmi Satyanarayana Dutt Tadikonda v. Union of India – [2020] 114 taxmann.com 424 (Delhi)

In the instant petition, the petitioner sought the withdrawal of the Look Out Circular (LOC) issued against him. Petitioner was a qualified chartered accountant and migrated to Dubai to work as a Financial Controller for Jaleel Group of companies and had been living in Dubai ever since.

The Dept. had alleged that the petitioner had helped in tax evasion by facilitating payments against bogus bills and invoices raised to M/s Punj Lloyd Limited by entities based in the foreign jurisdiction. During the course, the proceedings for LOC were initiated against the petitioner under section 53 of the Black Money and Imposition of Tax Act, 2015 for abetment in tax evasion.

The petitioner contented that he appeared before the investigating officers on multiple occasion and fully co-operated in the investigation.

 Thus, the LOC issued against him should be revoked so that he could travel to Dubai.

The Delhi High Court held that the petitioner was not an employee of M/s Punj Lloyd Limited and same was not denied by the respondents.

It was also not the case that the petitioner was not joining the investigation or that he had not co-operated during the investigation.

The issuance of the LOC is a serious matter as it contains full particular of the individual which are sent throughout the world.

 Thus, it was directed to be recalled by the issuing authority. However, the following conditions are imposed on the petitioner:

a) He shall join the investigation as and when called by the investigating officer. However, the investigating officer shall give him at least 7 days prior notice.

b) He shall co-operate in the investigation.

c) In case the petitioner is proposing to travel beyond Dubai, he shall furnish details of the country (ies) with his complete itinerary to the investigating officer.