The issuance of a LOC must be based on exceptional circumstances and supported by substantial evidence. Mere suspicion is not sufficient to curtail an individual's right to travel abroad.

JUDGMENT

1. The present petition under Article 226 of the Constitution of India seeks quashing of the Look Out Circular (hereinafter referred to as "LOC")issued against the petitioner by respondent No. 1/Ministry of Home Affairs at the instance of respondent No. 3/Income Tax Department.

2. The Petitioner is a director in two companies, namely M/s Nautilus Metal Crafts Pvt. Ltd., and M/s Aastha Apparels Pvt. Ltd. having their registered offices in Delhi. It is claimed that the two companies are in the business of exporting garments to the USA, Europe, South America, the UK and the UAE, and based on their performance are the recipients of various certificates and awards from the Government including a "Two Star Export House Status" and an "Authorized Economic Operator T-1 Certificate".

3. On the basis of a Warrant of Authorization (WoA) issued on 05.02.2019 u/s 132(1) of the Income Tax Act against a third party, namely 'The Kochar Group' comprising inter alia of Shri Avtar Singh Kochar, Shri Gagandeep Singh Kochar, Shri Hari Singh Kochar and M/s HL Impex (P) Ltd, a search action was conducted at the petitioner's residence from 06.02.2019 to 09.02.2019. During this search, besides some loose papers, a hard disk, a digital video recorder, a key to locker no. 150F, Bank of India, Punjabi Bagh New Delhi was also seized and as per procedure, the statements of both the petitioner and his wife were recorded. A WoA was thereafter, issued on 12.02.2019 against the petitioner and his wife for a search of the aforesaid locker, which led to the seizure of jewellery worth about Rs. 1,00,67,181 found in the locker. It is at this stage, that upon a request made by the respondent no.3 to the respondent no.1 on 25.02.2019, the impugned LOC came to be issued against the petitioner.

4. The reasons provided by the respondent no. 3 to the respondent no. 1 for issuing the LOC as reflected in column 4 of the prescribed performa read as under:-

"Undisclosed foreign assets and interests in foreign entities liable for penalty and prosecution under the Income Tax Act, the Black Money (Undisclosed foreign income and assets) and Imposition of Tax Act, 2015 and Prevention of Money Laundering Act, 2002."

5. In the meanwhile, on 04.04.2019 the search action at the petitioner's residence resumed under the initial WoA issued on 05.02.2019, and continued till 05.04.2019, when after recording the petitioner's statement, a final panchnama was drawn up. The petitioner claims that his requests for being provided with copies of the seized documents as also of the statements recorded during the search action, were not acceded to.

6. On 20.04.2019, proceedings under the Income Tax Act for the assessment of his income for the financial years 2018-19 and 2019-20 were initiated against the petitioner, and culminated in two assessment orders, both dated 05.07.2021. Under these orders, challenge whereto is pending adjudication in proceedings initiated by the petitioner, his additional income has been assessed at Rs. 21.40 crores.

7. At this stage, it may also be noted that the petitioner had by way of W.P.(C) 5213/2020 assailed before this Court, the search actions conducted at his residential premises, and at his locker. This writ petition came to be dismissed by the Division Bench on 07.12.2020 by holding that the respondent's action of carrying out search actions conducted at the petitioner's residence and locker were justified.

8. Upon learning about the issuance of the LOC against him, the petitioner sought withdrawal thereof by approaching the respondents vide representations dated 02.04.2019, 04.05.2019, 15.05.2019 & 31.05.2019. Along with his representations, the petitioner also submitted an affidavit dated 04.05.2019, deposing therein that neither he nor any of his family members held any foreign accounts or any undisclosed assets. The said affidavit was accompanied by supporting certificates issued by the Government of Dubai.

9. However, upon finding that no action was being