India, March 4 -- The Delhi High Court has held that the failure of tax authorities to obtain information about an assessee's overseas assets cannot be a ground to continue a Look Out Circular (LOC) indefinitely, particularly when income tax proceedings have concluded, and no demand remains outstanding.

A bench of justices Dinesh Mehta and Vinod Kumar, in a judgment delivered on February 27, observed that the prolonged continuation of such an LOC would infringe an individual's fundamental rights.

The court rendered the decision while hearing a petition filed by two businessmen, Gaurav Dalmia and Mridu Hari Dalmia, who challenged the Income Tax (I-T) Department's decision to issue and continue a LOC against them without justification. Th...