2 weeks ago
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The High Court of Karnataka has ruled that a “search operation” nether the Income Tax Act (I-T Act) is fundamentally “person-centric”, not “premises-centric”, and the individuality of the “searched person” is to beryllium determined with notation to the idiosyncratic against whom restitution for “search” is recorded, and not with notation to the ownership of the premises searched.
A Division Bench comprising Justice S.G. Pandit and Justice K.V. Aravind gave this uncovering portion allowing an entreaty filed by the Income Tax Department against a 2025 judgement of a azygous judge, who had held that erstwhile a premises belonging to a idiosyncratic is searched, that idiosyncratic should beryllium treated arsenic a “searched person” nether Section 153A alternatively of an “other person” nether Section 153C.
The lawsuit originated from a hunt conducted successful September 2017 astatine the residence of 1 Ram Mohan Raju, based connected a warrant of authorisation issued successful the sanction of 1 K. Narayan Raju. The taxation authorities had crushed to fishy that documents belonging to Mr. Narayan Raju were kept connected Mr. Ram Mohan Raju’s premises. Since documents belonging to the erstwhile were recovered connected the premises of the latter, the section had proceeded nether Section 153C, which governs the appraisal of a idiosyncratic whose assets oregon documents were recovered during a hunt of “another person”.
Mr. Ram Mohan Raju challenged the announcement issued nether Section 153C, arguing that since his ain location was physically searched, helium should beryllium treated arsenic the “searched person” and proceedings should person been initiated nether Section 153A, which would connection him antithetic procedural advantages. The azygous justice had agreed with this contention portion quashing the notices.
Overturning the azygous judge’s order, the Bench, upon a elaborate investigation of assorted provisions of the I-T Act, said that the look “searched person” refers lone to the idiosyncratic against whom authorities recorded “reason to believe” nether Section 132(1)(a) to (c) to behaviour the search. Merely due to the fact that a 3rd party’s premises were searched arsenic portion of a hunt cognition would not marque that idiosyncratic a “searched person” nether the Act, the Bench clarified.
“The process nether Section 153A of the Act is confined to the idiosyncratic against whom a hunt is initiated wrong the meaning of Section 132. Proceedings against immoderate different idiosyncratic (connected to searched person) connected whose premises a hunt is conducted oregon from whom worldly is seized, tin beryllium initiated lone nether Section 153C, taxable to restitution of the statutory conditions,” the Bench further clarified.
