Director Can't Challenge Income-Tax Search Against Company In Individual Capacity: Karnataka High Court

On 6 October, the Karnataka High Court held that a company director cannot challenge an income-tax search and seizure conducted against the company in his individual capacity when the search is not directed against him personally.

Justice B M Shyam Prasad found force in the Revenue's contention that Obedulla A, a director of Attica Gold Private Limited, could not challenge the search against the company in his individual capacity. The Bench observed:

“If any person could have a grievance with the search and seizure or the manner of authorization 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.”

Obedulla, stated to be a director of Attica Gold Private Limited, challenged the authorisations issued for searches conducted against the company and the consequential summons issued to him, besides seeking protection against coercive action.

He argued that the search authorisation could not have been issued unless the statutory conditions for conducting a search were satisfied, including failure to comply with summons or notices or the existence of reasons to believe that a person was in possession of undisclosed assets or relevant information.

The Revenue opposed the petition, contending that the search was against the company and that Obedulla, being a director, had no personal cause of action to challenge it.

The Court held that any grievance concerning the search and seizure or the manner of its authorisation had to be raised by the person affected by the search. Since the search was against the company, Obedulla could not challenge it in his individual capacity.

However, when Obedulla sought reasonable time to appear in response to the summons issued to him, the Revenue agreed to permit him to appear on a later date.

Accordingly, the High Court disposed of the petition, permitting him to appear before the concerned authorities on 14 October 2026 in response to the summons dated 30 September 2026. It clarified that if he failed to appear, the authorities would be free to take any measures permissible in law.

For Petitioner: Mohammed Tahir, Advocate 

For Respondent: Aravind Kamath, ASG, along with Y.V. Raviraj and M. Dilip, Advocates