TaxTMI 
TaxTMI 
2024 (2) TMI 948
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....er referred to as "the IT Act") on the premises of the Suri Family of the Lalit Hotels Group, including the premises of the petitioner herein. It is stated that the preliminary investigation reveals that the Suri Family with the help of the Petitioner herein have indulged in evading the disclosure of a large amount of undisclosed foreign assets/income to the tune of Rs. 1400 crores in offshore jurisdictions. It is stated that the Petitioner has employed his NRI status in creating a structure of institutions/trusts in offshore jurisdictions for the benefit of the larger family and his sister, Ms. Jyotsana Suri, and has indulged in diversion of unaccounted assets/income with the purpose of circumventing the jurisdiction of Indian revenue authorities. Statement of the Petitioner under Section 132 of the IT Act was taken on 20.01.2020. On the basis of the search and seizure operations conducted by the Income Tax Department and the evidence collected by the Income Tax Department, the Deputy Director of the Income Tax issued an LOC against the Petitioner on 22.01.2020. Material on record discloses that summons have been issued against the Petitioner on 23.01.2020, 24.08.2020, 21.12.2020,....
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.... to these entities, foreign income has been accrued to the petitioner and his family in excess of the amounts disclosed to the IT Department which is an offence under the Black Money Act. He states that the petitioner has been the architect of these structures which he has created by misusing his residential status as an NRI. He further states that the information sought through the Foreign Tax and Tax Research Division (FT&TR) from other jurisdictions such as the UAE, UK and Switzerland is still awaited and the presence of the petitioner will be necessary for further departmental proceedings on receipt of the information. He states that it is for this purpose that the LOC against the petitioner should not be quashed. 7. Heard the Counsels for the parties and perused the material on record. 8. Initially LOCs were issued against such individuals who were suspected of committing serious crimes and were indulged in anti national activities, terrorist activities, etc. However, after amendment, LOCs are now also opened at the instance of investigating agencies and banks against persons who have committed economic offences which involve offences under the Black Money Act and Prevention....
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....ch departure ought not to be permitted in the larger public interest at any given point in time." 10. The scope and ambit of the term "economic interests of India" has been a subject matter of a number of judgments and most of the Courts, in unison, have held that the magnitude of the offence must be such that it has affected the economic interest of the country and larger public interest is involved. In Vikas Chaudhary v. Union of India, 2022 SCC OnLine Del 97, this court while discussing the extent of the term "economic interest of India" held as under "36. However, the matter does not end here and the crucial issue which needs to be now determined is as to whether the Clause 'detrimental to the economic interests of India' introduced vide the amendment in 2017, with a specific rider that the same would be used only in exceptional circumstances, could have, in the facts of the present case, been resorted to, for issuing the impugned LOC, as also whether the impugned LOC could be continued for the last almost 3 years without any proceedings under the IPC or any other penal law being initiated against the petitioner. It has to be kept in mind, that the issuance of a LOC necessa....
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....1 the Constitution of India. Thus, the issuance of a LOC against the petitioner, without any end in sight, would definitely cause irreparable and considerable damage to the business interests of the petitioner. One also has to keep in mind that the issuance of a LOC is an extremely severe step and when purportedly issued in exceptional circumstances, on the ground of the departure of the person being 'detrimental to the economic interests of India', the authorities must tread with caution. Once this Clause itself is meant to be used in exceptional circumstances, it cannot be permitted to be used in such a mechanical manner, as in the present case." 11. Admittedly, the allegations made by the IT Department after conducting a search and seizure operations warranted the issuance of an LOC in 2020 for ensuring compliance of the petitioner with the ongoing investigation. The LOC was further reviewed and extended in 2021 and 2022. However, the investigation has been going on for more than 3 years and the petitioner has complied with multiple summons issued to him. The last summon was issued to the Petitioner in March 2022, i.e. about two years back, and the Petitioner has not been summ....