Days after the search they passed an order stopping me from leaving India without a tax clearance certificate. Can they do that, and does it even apply to a Black Money Act case?
On the text that can be read, the Madras High Court found the order under s.230(1A) indefensible at every point: it was passed one day after the search, on approval of the Director General of Income Tax (Investigation) and not of the Chief Commissioner as the provision requires, in language cut and pasted across five cases, and on no material showing that the assessee was a habitual offender, had criminal antecedents or was an assured flight risk. On the Black Money Act the Court recorded that s.84, which lists the Income-tax Act provisions carried into that Act, does not include s.230. The copy available stops before the formal disposal, so the order made on the writ petition is not stated here.
Decided by the High Court (Dr Anita Sumanth J) on 2020-09-07, reported as Writ Petition No. 31383 of 2019, High Court of Judicature at Madras. It bears on section BMA s.84, section 230(1), section 230(1A), section Constitution Art. 21 of the Income Tax Act 1961, in Demand, Recovery & Stay, Search, Survey & Block Assessment and How Tax Law Is Read matters.
Section 84 is the borrowing provision: it decides what machinery of the 1961 Act is available in a Black Money Act proceeding at all. This is authority that an omission from that list is deliberate and that what is not listed is not available - a reading that matters well beyond s.230. On the s.230 point itself, read the validity note before relying on it: Parliament has since moved.
Binding within that High Court's jurisdiction. Persuasive elsewhere.
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A search was conducted at the petitioner's premises on 16 October 2019, in which unaccounted cash of about Rs 23.87 crore, foreign currency of about USD 1.25 million, jewellery of about Rs 1.68 crore and diamonds of about Rs 1.78 crore were found (para 11). The department alleged that the assets had been generated through companies abroad in which the petitioner held shareholdings or was a trustee, and alleged hawala transactions (para 12). Proceedings were taken both under the Income-tax Act and under the Black Money Act for assessment of the seized income and assets (para 13). On 18 October 2019, in the judgment's own words 'one day after the search', an order was passed under s.230(1A) requiring a tax clearance certificate before foreign travel; approval was sought from and conveyed by the Director General of Income Tax (Investigation) on the same day (para 16). The petitioner made a representation on 7 November 2019 which was rejected by order dated 11 November 2019. A connected petition, Writ Petition No. 31971 of 2019, was listed with this one and was dismissed as withdrawn on 13 November 2019.
What can be read of the judgment runs against the order under s.230(1A) at every point, but the copy breaks off in mid-sentence in para 55 and the formal disposition of the writ petition was not reached; it is therefore not stated here, and the entry does not assert that the order was quashed. On approval, s.230(1A) requires the satisfaction and approval of the Chief Commissioner of Income Tax; the provision 'is categoric in regard to the requirement of approval from the CCIT' (para 40) and 'the statutory mandate for approval by the CCIT must be understood as that of the CCIT only and not as interchangeable with that of the DGIT' (para 48). On the merits, the hearings the department relied on to show non-cooperation 'have all been scheduled post the date of impugned order', and 'this one fact would be sufficient to decide that the impugned order has been passed in haste and pre-maturely' (para 37). The communication rejecting the representation was a 'cut and paste effort' 'couched in identical language in all five cases' (para 38). On the Black Money Act the Court recorded that s.230 of the Income-tax Act is a critical omission from the list in s.84 and that an omission in an enactment cannot be deemed inadvertent (para 54); para 55 begins the call for the legislature to extend s.230 to that Act, and the text cuts off inside it.
The Court read s.230(1A) as an exceptional power and set the threshold accordingly: it 'cannot be invoked unless the material available on file indicates circumstances that support the position that the assessee in question is a habitual offender, has criminal antecedents or is an assured flight risk' (para 26). It accepted that the provision can operate on an anticipated demand, but observed that the 'investigation is itself at a very nascent stage and assessments will be finalised in due course' (para 26). On the facts it went through the hearings said to show non-cooperation and found that all of them post-dated the impugned order (para 37). On approval it read the words of the provision as categoric (paras 40 and 48). On s.84 it applied the ordinary rule that the legislature is taken to have applied its mind to every word selected, so that the absence of s.230 from the list of borrowed provisions is a conscious choice and not an oversight (para 54).
It is a settled position that an omission in a statutory provision or an enactment cannot be deemed to be inadvertent.
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Handle my notice → Ask a CA on WhatsAppOn the text that can be read, the Madras High Court found the order under s.230(1A) indefensible at every point: it was passed one day after the search, on approval of the Director General of Income Tax (Investigation) and not of the Chief Commissioner as the provision requires, in language cut and pasted across five cases, and on no material showing that the assessee was a habitual offender, had criminal antecedents or was an assured flight risk. On the Black Money Act the Court recorded that s.84, which lists the Income-tax Act provisions carried into that Act, does not include s.230. The copy available stops before the formal disposal, so the order made on the writ petition is not stated here. This was decided by the High Court (Dr Anita Sumanth J) and bears on section BMA s.84, section 230(1), section 230(1A), section Constitution Art. 21 of the Income Tax Act 1961. It is reported as Writ Petition No. 31383 of 2019, High Court of Judicature at Madras. Section 84 is the borrowing provision: it decides what machinery of the 1961 Act is available in a Black Money Act proceeding at all. This is authority that an omission from that list is deliberate and that what is not listed is not available - a reading that matters well beyond s.230. On the s.230 point itself, read the validity note before relying on it: Parliament has since moved. If it applies to you, the first step is this: Check who approved the s.230(1A) order; on this judgment the mandate of approval by the Chief Commissioner is not satisfied by approval of the Director General.
A search was conducted at the petitioner's premises on 16 October 2019, in which unaccounted cash of about Rs 23.87 crore, foreign currency of about USD 1.25 million, jewellery of about Rs 1.68 crore and diamonds of about Rs 1.78 crore were found (para 11). The department alleged that the assets had been generated through companies abroad in which the petitioner held shareholdings or was a trustee, and alleged hawala transactions (para 12). Proceedings were taken both under the Income-tax Act and under the Black Money Act for assessment of the seized income and assets (para 13). On 18 October 2019, in the judgment's own words 'one day after the search', an order was passed under s.230(1A) requiring a tax clearance certificate before foreign travel; approval was sought from and conveyed by the Director General of Income Tax (Investigation) on the same day (para 16). The petitioner made a representation on 7 November 2019 which was rejected by order dated 11 November 2019. A connected petition, Writ Petition No. 31971 of 2019, was listed with this one and was dismissed as withdrawn on 13 November 2019. The matter was decided on 2020-09-07 by the High Court (Dr Anita Sumanth J). On those facts the High Court held as follows. What can be read of the judgment runs against the order under s.230(1A) at every point, but the copy breaks off in mid-sentence in para 55 and the formal disposition of the writ petition was not reached; it is therefore not stated here, and the entry does not assert that the order was quashed. On approval, s.230(1A) requires the satisfaction and approval of the Chief Commissioner of Income Tax; the provision 'is categoric in regard to the requirement of approval from the CCIT' (para 40) and 'the statutory mandate for approval by the CCIT must be understood as that of the CCIT only and not as interchangeable with that of the DGIT' (para 48). On the merits, the hearings the department relied on to show non-cooperation 'have all been scheduled post the date of impugned order', and 'this one fact would be sufficient to decide that the impugned order has been passed in haste and pre-maturely' (para 37). The communication rejecting the representation was a 'cut and paste effort' 'couched in identical language in all five cases' (para 38). On the Black Money Act the Court recorded that s.230 of the Income-tax Act is a critical omission from the list in s.84 and that an omission in an enactment cannot be deemed inadvertent (para 54); para 55 begins the call for the legislature to extend s.230 to that Act, and the text cuts off inside it.
The Court read s.230(1A) as an exceptional power and set the threshold accordingly: it 'cannot be invoked unless the material available on file indicates circumstances that support the position that the assessee in question is a habitual offender, has criminal antecedents or is an assured flight risk' (para 26). It accepted that the provision can operate on an anticipated demand, but observed that the 'investigation is itself at a very nascent stage and assessments will be finalised in due course' (para 26). On the facts it went through the hearings said to show non-cooperation and found that all of them post-dated the impugned order (para 37). On approval it read the words of the provision as categoric (paras 40 and 48). On s.84 it applied the ordinary rule that the legislature is taken to have applied its mind to every word selected, so that the absence of s.230 from the list of borrowed provisions is a conscious choice and not an oversight (para 54). In the words reproduced by the source cited on this page: "It is a settled position that an omission in a statutory provision or an enactment cannot be deemed to be inadvertent."
It was decided by the High Court on 2020-09-07 and is reported as Writ Petition No. 31383 of 2019, High Court of Judicature at Madras. Binding within that High Court's jurisdiction. Persuasive elsewhere. A High Court decision binds the assessing officer, the Commissioner (Appeals) and the Income Tax Appellate Tribunal within that state, and is persuasive elsewhere. If your assessment is in a different jurisdiction, check whether your own High Court has taken the same view before relying on it. On section BMA s.84, section 230(1), section 230(1A), section Constitution Art. 21, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. What can be read of the judgment runs against the order under s.230(1A) at every point, but the copy breaks off in mid-sentence in para 55 and the formal disposition of the writ petition was not reached; it is therefore not stated here, and the entry does not assert that the order was quashed. On approval, s.230(1A) requires the satisfaction and approval of the Chief Commissioner of Income Tax; the provision 'is categoric in regard to the requirement of approval from the CCIT' (para 40) and 'the statutory mandate for approval by the CCIT must be understood as that of the CCIT only and not as interchangeable with that of the DGIT' (para 48). On the merits, the hearings the department relied on to show non-cooperation 'have all been scheduled post the date of impugned order', and 'this one fact would be sufficient to decide that the impugned order has been passed in haste and pre-maturely' (para 37). The communication rejecting the representation was a 'cut and paste effort' 'couched in identical language in all five cases' (para 38). On the Black Money Act the Court recorded that s.230 of the Income-tax Act is a critical omission from the list in s.84 and that an omission in an enactment cannot be deemed inadvertent (para 54); para 55 begins the call for the legislature to extend s.230 to that Act, and the text cuts off inside it. It arises in Demand, Recovery & Stay, Search, Survey & Block Assessment and How Tax Law Is Read matters, on section BMA s.84, section 230(1), section 230(1A), section Constitution Art. 21 of the Income Tax Act 1961, and was decided by Dr Anita Sumanth J. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Test the timing - an order passed within days of the search, before any hearing has been held, is on this reasoning premature. Compare the language of the order with those served on other persons searched with your client; identical wording across cases showed the absence of application of mind here. Put the threshold high: the Court required material indicating a habitual offender, criminal antecedents or an assured flight risk. Before arguing the s.84 point on travel restrictions, check the current text of s.230(1A), which was amended with effect from 1 October 2024 to bring Black Money Act liabilities within the tax clearance certificate.
Superseded by amendment. As to the travel-restriction point, the gap the Court identified has been closed from the other side. Section 230(1A) was amended by the Finance (No. 2) Act, 2024 with effect from 1 October 2024 to add the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 to the list of Acts whose liabilities a person domiciled in India must satisfy before leaving the country. So the observation at paras 53 to 55 that s.230 is unavailable in a Black Money Act setting no longer states the current position, and the Court's own call for amendment has been answered in substance. What is not affected is the rest of the judgment: the reading of s.84 as a closed list from which an omission is deliberate, the requirement of approval by the Chief Commissioner, and the threshold of material needed before a citizen's travel is restricted. No decision applying, doubting or overruling the judgment was located. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The document at indiankanoon truncates in mid-sentence in para 55 ('it is incumbent upon the Legislature to have extended the provisions of Section 230...'), before the operative disposal. The reasoning against the order is complete in what could be read - paras 26, 37, 38, 40, 48 and 54 - but no line allowing the petition or quashing the order was reached, and the writ miscellaneous petition number that the discovery note carries (WMP No. 31550 of 2019) could not be confirmed from the text. Two dates appear and should not be confused: the order under s.230(1A) is dated 18 October 2019, and the rejection of the petitioner's representation is dated 11 November 2019. One retrieval of para 48 carried a parenthetical reference to the position prior to 1 April 2021 on the interchangeability of the Chief Commissioner and the Director General; that qualification could not be located in the judgment's own text and should be checked against the reported judgment before it is relied on. The petitioner's trusteeship of foreign companies is recorded in the department's allegations at para 12 and was not adjudicated. A later reading of the judgment against this entry corrected two things: the facts had the s.230(1A) order passed 'two days after the search' where para 16 says 'The search has taken place on 16.10.2019 and the impugned order has been passed on 18.10.2019, one day after the search'; and the held field asserted that the Court held the order unsustainable, a disposition that is not in the reachable text, so the held now states only what was reached and records the truncation. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
What can be read of the judgment runs against the order under s.230(1A) at every point, but the copy breaks off in mid-sentence in para 55 and the formal disposition of the writ petition was not reached; it is therefore not stated here, and the entry does not assert that the order was quashed. On approval, s.230(1A) requires the satisfaction and approval of the Chief Commissioner of Income Tax; the provision 'is categoric in regard to the requirement of approval from the CCIT' (para 40) and 'the statutory mandate for approval by the CCIT must be understood as that of the CCIT only and not as interchangeable with that of the DGIT' (para 48). On the merits, the hearings the department relied on to show non-cooperation 'have all been scheduled post the date of impugned order', and 'this one fact would be sufficient to decide that the impugned order has been passed in haste and pre-maturely' (para 37). The communication rejecting the representation was a 'cut and paste effort' 'couched in identical language in all five cases' (para 38). On the Black Money Act the Court recorded that s.230 of the Income-tax Act is a critical omission from the list in s.84 and that an omission in an enactment cannot be deemed inadvertent (para 54); para 55 begins the call for the legislature to extend s.230 to that Act, and the text cuts off inside it.
TaxSphere, “Preetha Krishna v ACIT (Inv)”, https://taxnotice.vittsphere.com/caselaw/case/preetha-krishna-v-acit-bma-84-section-230-omission/ (validity last checked 2026-09-16)
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