Evidence against 3rd parties subject to tax proceedings, rules SC

The Supreme Court upheld an amendment that allows income tax officials to proceed against “third parties” against whom incriminating evidence was found at another person’s premises during search operations. It also said that the amendment would apply retrospectively.

The matter pertains to the application of Section 153C of the Income Tax Act, which provides the revenue department the power to proceed against third parties and issue notice and assess and reassess income in case of undisclosed income and assets. This amendment was passed through the Finance Act of 2015, which came into effect on June 1, 2015.