New Delhi: The Supreme Court on Thursday (April 6) in a significant judgement on income tax searches upheld the income tax provision and amendment to search relatives and friends other than the accused. Explain that the provision of Section 153C was added to the Income Tax Act of 1961 through the Finance Act of 2015, which was to come into effect on June 1, 2016. In its decision, the top court said that this law will be applicable from the retrospective date.

Explain that. Section 153C of the Income Tax Act says that the Revenue Department can search other people other than the accused person, and if criminal material related to them is found in the search, the department can also search them. The words 'relation and relationship were initially used in this section. That is, if during the search any book of account or document belonging to someone other than the accused is found, it can also be searched.

However, this provision was struck down by the Delhi High Court in 2014. Subsequently, the Finance Act of 2015 amended it and replaced the word 'relates to' with 'is connected with'. This amendment was challenged in the Supreme Court. A bench of Justice MR Shah and Justice CT Ravikumar upheld the amendment, saying that the Delhi High Court had too narrowly defined the meaning of the word to allow tax evaders to escape, which was not the intention of the legislature. So it amended Section 153C to include those involved in tax evasion.

The top court said searches under section 132 of the Income Tax Act would continue in cases prior to June 1, 2015. In this case, 115 appeals were filed against the judgement of the Delhi High Court. All these appeals were dismissed by the apex court.

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