No Prohibition on travelling abroad if proceedings u/s 10 of Black Money Act initiated

No Prohibition in law on travelling abroad if proceedings u/s 10 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 have been initiated

ABCAUS Case Law Citation
ABCAUS 3620 (2022) (11) AC

Important Case Laws relied upon:
Parvez Noordin Lokhandwala
Satwant Singh Sawhney vs. D. Ramarathnam AIR 1967 SC 1836
Maneka Gandhi VS. UOI

In the instant case, the applicant (the Revisionist) had filed a Revision Petition before the Sessions Court impugning order passed by the Trial Court (ACMM (Special Acts) vide which one application of the petitioner seeking permission to travel abroad was dismissed.

The Income Tax Department (Respondent here) received information from the competent authority of British Virgin Islands (BVI) that the Revisionist was a shareholder and beneficial owner of a company there.

The Department filed a Criminal Complaint u/s 50 of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 against the revisionist. The Trial Court took cognizance of the matter and granted bail to the Revisionist herein upon furnishing bail bonds and surety. One of the conditions of the bail was that revisionist shall seek permission of the Court before travelling outside India.

Later, the revisionist filed an application before the Trial Court seeking permission to travel abroad. The Revisionist also filed an affidavit in support of his application, placing on record, the confirmed flight tickets, proof of hotel reservation and a certificate showing his net worth as prepared by his Chartered Accountant.

The Income Tax Department raised an objection that a Show Cause Notice had been issued to the Revisionist and its reply was awaited, therefore since the enquiries were still on, the Revisionist may tamper with evidence, interfere with the enquiries and poses flight risk.

The Sessions Court observed that it was apparent that, only in order to oppose the Application of the Revisionist to travel to abroad for a week, the Income Tax Department had issued the said notice u/s 10 of the Black Money Act, 2015, vide an email to his Chartered Accountant, pertaining to subject matter of the year 2016, admittedly issued after a period of 5 years.

The Court further observed that there is nothing in law which prohibits a person from travelling abroad if the proceedings u/s 10 of the Black Money Act have been initiated against a person.

The Hon’ble Court also observed that even otherwise, the net worth of the revisionist is more than 250 time of the allegation and also the income tax paid for one year by the Revisionist was more approx. 10 times of the alleged tax claim. Therefore, there could be no fear with the department about the recovery of alleged claim of tax.

Further, there was no allegation of the Department that the Revisionist had ever tried and/or will try to influence any witness.

The Hon’ble Sessions Court observed that the Constitutional bench of the Hon’ble Supreme Court held that a person living in India has a fundamental right to travel abroad under Article 21 of the Constitution of India.

The Sessions Court observed that the Trial Court did not assess and evaluated if the accused posed any flight risk, it was not that the accused was alleged to have no roots in India, it was also not apprehended that the accused may tamper with evidence, infact the record relied upon pertains to British Virgin Islands and not the place where revisionist was travelling.

The Hon’ble Court allowed the revision petition and directed that the applicant to file before the Trial Court the proposed dates of travel, with confirmed tickets, which shall be verified by the Trial Court, the petitioner shall also file an undertaking that the accused/petitioner shall return on the date mentioned therein, and shall not absent himself in the course of the proceedings except on dates his presence is exempted.

The Trial Court may also impose such other reasonable conditions as deemed fit in the facts and circumstances of the case.

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