Special judge observed that “.. no exceptional circumstance has been put forth by the department,” states the order reviewed by ET. The judge further observed that issuing of a LoC requires fulfillment of two conditions: First, accused deliberately evading arrest or not appearing before the agency despite issuance of a non bailable warrant and other coercive measures and second, there is likelihood of the accused fleeing the country.
A Special Court in Delhi quashed the look out circular (LOC) LOC issued by Income Tax Department against businessman Samir Modi, the Executive Director, KK Modi Group in alleged tax evasion case and for offences under the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act.
The court has however asked Modi to seek permission of the court before leaving the country and share all addresses including international address and mobile numbers.
Special judge observed that “.. no exceptional circumstance has been put forth by the department,” states the order reviewed by ET. The judge further observed that issuing of a LoC requires fulfillment of two conditions: First, accused deliberately evading arrest or not appearing before the agency despite issuance of a non bailable warrant and other coercive measures and second, there is likelihood of the accused fleeing the country.
On November 22, Modi while travelling to Dubai for an official CACCI(Confederation of Asia-Pacific Chambers of Commerce and Industry) meeting was apprehended at Delhi airport based on a LoC issued by Income Tax Department.
Modi through his advocates, Vijay Aggarwal, Rhythm Aggarwal and Hardik Sharma challenged the said LoC the Special Income Tax Court.
The tax department had contested the plea stating that Modi has not cooperated with the investigating agency and failed to appear before the agency at least on two occasions.. It also contended that Modi was trying to take the citizenship of the other country. It also argued that the applicant had not responded to the summons issued to him under section 131 (1A) of the IT Act. “the applicant is trying to run away from the country to avoid huge tax liability and penal consequences,” it argued. “... his wife and family members are holding certain shares in the company registered in the British Virgin Islands”, the reply stated. “Applicant is liable to be prosecuted under the BMA as has not disclosed his foreign assets and at the same time sufficient material has been unearthed during the post search investigation,” the reply further adds.
Advocate Vijay Aggarwal appearing for Modi argued before the Special Court that the issuance of LOC against his client is arbitrary and in complete violation of principle of Audi Alteren Partem, i.e. the right of the party to get fair hearing. He further argued that his client being an esteemed citizen of this nation, is further the Current President of CACCI and Executive Member of FICCI. Thus, by issuance of the present LOC reputation has been tarnished by the unjust and arbitrary act of the agency.
He also argued that the recourse to LOC can be taken by investigating agencies in cognizable offences under IPC for other penal laws, where the accused was deliberately evading arrest or not appearing in the court. Aggarwal also contended that none of the above conditions were fulfilled by the investigating agency as his client has always co-operated in the investigation and thus, the issuance of the said circular is just an abuse of process.
Source - https://economictimes.indiatimes.com/news/india/special-court-revokes-loc-against-businessman-samir-modi/articleshow/88439290.cms
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