income tax
On October 28, 2021, the Income Tax Department launched search and seizure operations focused on a prominent construction group operating in Karnataka. This group is known for its civil construction projects related to road and irrigation development across various locations in North Karnataka.
The search resulted in the discovery that the construction group had been masking its profits by falsely reporting expenses associated with:
Substantial incriminating evidence, including digital assets, was seized during these operations. An analysis of the findings revealed that a key individual within the group received unaccounted cash from numerous vendors and suppliers. Moreover, it was found that the group engaged family members, friends, and employees as intermediaries, misrepresented as subcontractors. These subcontractors did not perform any actual work and lacked the necessary capabilities. As a result, the group was able to generate unaccounted cash through these fraudulent transactions.
The search operation has led to the revelation of undisclosed income exceeding Rs. 70 crore. This amount has been recognized as unreported income by the assessee group.
Further investigations are currently underway to delve deeper into the group’s financial activities and evaluate the full extent of the identified issues from the search operation.
The Finance Bill 2025 introduces amendments to Section 132(8), extending the deadline for retention approval of seized documents to one month following the end of the quarter in which the assessment order is issued, replacing the previous guideline of 30 days from the order date.
Additionally, the term “authorisation” has been clarified to “authorisations” to encompass multiple warrants for a single assessee.
References in Section 132B have been updated to enhance legislative clarity.
These amendments intend to streamline compliance and are crucial for future search operations; however, they do not apply retroactively to the 2021 case.