The Karnataka High Court has ruled that a company director can’t challenge an income tax search and seizure conducted against the company in their individual capacity, provided the search was not directed against director personally.
Justice B M Shyam Prasad rejected the Revenue’s claim that Obedulla A, a director of Attica Gold Private Limited, could not challenge the search against the company on its own. The Bench mentioned that-
“If any person could have a grievance with the search and seizure or the manner of authorisation which could be canvassed to invoke this Court’s jurisdiction, it has to be by the affected person, and the petitioner cannot be such a person.”
Read Also: HP High Court Permits Fresh Challenge to Section 147A After SC Remand
Obedulla, identified as a director of Attica Gold Private Limited, challenged the authorisation issued for the search conducted against the company and the subsequent summons served upon him; he also sought protection against coercive action.
Counsel argued that the search authorisation was invalid because statutory pre-conditions were not met-specifically, there was no non-compliance with statutory notices, nor any reasonable grounds to believe the assessee possessed undisclosed assets or relevant records.
The petition was opposed by the revenue, claiming that the search was against the company and that Obedulla, the director of the company, had no personal cause of action to contest it.
The Court mentioned that the person impacted by the search should raise concern for any grievance related to the search and seizure or the manner of its authorisation. As the search was against the company, Obedulla could not contest it on its own.
Important: Delhi HC: Co-Accused Can Independently Seek Compounding of Offences Under Income Tax Act
When Obedulla asked for time to appear in response to the summons issued to him, the revenue had considered allowing him to appear on a later date.
Therefore, the High Court disposed of the petition, allowing him to appear before the authorities in response to the summons. It said that if he did not appear, then the authorities could take any action under the law.
| Case Title | Obedulla vs. Union of India |
| Case No. | 31229 OF 2026 (T-IT) |
| For the Appellant | Sri. Mohammed Tahir |
| For the Respondent | Sri. Aravind Kamath, Sri. Y.V. Raviraj, and Sri. M. Dilip |
| Karnataka High Court | Read Order |
