Big Win for Actor Yash: Karnataka HC Confirms ‘Searched Person’ Status, Quashes Order Passed u/s 153C Without Incriminating Material [Read Order]

The Karnataka High Court has granted significant relief to Kannada actor Yash, holding that he was a “searched person” under the Income Tax Act, 1961, and therefore, could not be subjected to proceedings under Section 153C. A Single Judge Bench comprising Justice B.V. Nagarathna quashed the notices issued to him on the ground that no incriminating material had been found to justify the assumption of jurisdiction.

The petition arose from a search action during which the authorities entered and searched the residence of the assessee and recorded his statement. Despite this, the revenue claimed that the initial warrant was issued in the name of another person and related business companies, making him "such other person" for the purposes of Section 153C. This led the assessee to challenge the notices and subsequent assessment orders.

Upon examining the search warrant, the panchnama and the surrounding circumstances, the Court held that the petitioner had been subjected to a direct search, making him a “searched person” in the eyes of law.

The Court placed reliance upon an earlier ruling in C.R. Ram Mohan Raju v. DCIT (2024), where it was held that once the premises of a person are searched, the individual cannot be treated as “any other person” to attract the provision of Section 153C.

Going by what was reaffirmed by the Supreme Court in V.C. Shukla and Common Cause, the Court further pointed out that the material produced by the department did not satisfy the evidentiary requirements outlined in the Evidence Act. Since these records were not included in any regularly kept books of account, they could not be used as incriminating evidence to overturn an assessment that had already been made.

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The Court underlined that “sole, unmistakable conclusion/inference that can be arrived at from the material on record is that the petitioner was a searched person and not a non-searched person/such other person as contemplated under Section 153C of the I.T. Act and consequently, Section 153C would neither be applicable nor invocable as against the petitioner, who was a searched person to whom this provision would not apply.”

Concluding the matter, the High Court allowed the writ petition, quashing the notices issued under Section 153C and all consequential actions.

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