Lakshmi Satyanarayana Dutt Tadikonda v. UOI(2020)426 ITR 550/ 274 Taxman 414 (Delhi)(HC)

Black Money (Undisclosed Foreign Income And Assets) And Imposition Of Tax Act, 2015,

S.53 : Punishment for abetment – Tax evasion —Bogus bills – Statement on oath — Petitioner appearing before authorities and co-operating in investigation and making admissions — Directions to authorities to recall look out circular ,in name of petitioner [Income -tax Act , 1961 , S 131(IA ) 133A ,Art , 226 ]

Proceedings for a look-out circular were initiated against the petitioner under S.  53 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 for abetment in tax evasion. The petitioner held a resident visa issued by the U. A. E. authorities and frequently visited India. On January 6, 2020, when he arrived at Hyderabad he was informed by the officers at the airport to meet the Income-tax authorities regarding some pending issues. When on January 8, 2020, the petitioner was leaving for Dubai from Hyderabad Airport he was approached by a few officers of the Income-tax Department who served him with the copy of summons dated January 8, 2020 and took him for questioning in regard to their investigation pertaining to the PL group. The petitioner was questioned by the officers of the Department. The officers impounded soft copies of the two mobile phones of the petitioner and his laptop. From January 14, 2020 to January 17, 2020, the petitioner appeared before the investigating officers on multiple occasions. The petitioner in his statements recorded on oath under S.  131(1A) of the 1961 Act on January 8, 2020 and January 14, 2020 stated that the entities arranged by him had raised bogus invoices against PL and also quantified the total amount of expenses booked by PL against bogus invoices, that once the entities received the amount from the banks on behalf of PL, such entities then deducted their own commission for raising bogus bills while the petitioner deducted his commission for making the arrangement, after which the remaining amount went back to PL and its promoters. The petitioner filed a a writ petition seeking a direction to the Department to withdraw the look-out circular in his name  Court held that  the petitioner did not fall in any of the categories or types of persons who could be included in the look-out circular. There were no allegations that the petitioner ever absconded and did not participate in the criminal proceedings, rather according to the status report the petitioner had joined the investigation as and when called by the Income-tax office and his statements had already been recorded and as stated by the respondents, he had made certain admissions in his statements given to the Department, which showed that the petitioner had co-operated with the investigating agency. Since the statements of the petitioner had already been recorded, they could be confronted with the promoters of PL. In the entire status report there was neither any apprehension, nor any hint or any allegation that the petitioner would not be available for interrogation and would not present himself at the time of the trial. The petitioner was not an employee of PL. There was no justification to keep the look-out circular alive and therefore, it was to be recalled by the issuing authority.

Piyoosh Kumar Goyal v. UOI ( 2020) 426 ITR 546 (Delhi) (HC)  distinguished.  Court also observed that the petitioner was to join the investigation and co-operate as and when called by the Investigating Officer. However, the Investigating Officer shall give him at least 7 days’ prior notice. If the petitioner proposed to travel beyond Dubai, he should furnish the details of the country or countries with his complete itinerary to the Investigating Officer.