Kerala High Court Refuses To Interfere With Income Tax Dept's Seizure Of Rs 1 Crore From CPI(M) During 2024 General Elections

The Income-Tax Department had in the days leading up to the 2024 Lok Sabha election, froze the bank account on the ground that there was a mismatch in the annual returns filed by the party. The petition challenging this action was filed by M. M. Varghese, the former Secretary of the District Committee.

“The pleadings and the materials placed for consideration do not indicate any malafides…..Hence, the satisfaction arrived at by the respondents to initiate the search and seizure under Section 132 of the Income Tax Act cannot be held to be perverse or legally untenable. Considering the scope of interference under 226 with a proceeding under 132 of the Act, this Court is of the view that the search and seizure proceedings initiated by the respondents do not warrant any interference at this juncture,” ordered Justice Bechu Kurian Thomas

The bank account was initially frozen seeing that the bank account was not linked to the PAN. The petitioner had submitted that this happened due to the emission on part of the bank. The Court however said that the material on record would prima facie show that the bank has requested to link the PAN with the account but there was total refusal from the part of the persons operating the account.

The Court also said that there is a prima facie material to suggest that the bank account was not mentioned in the tax returns till that date.

Counsel for the Petitioners: Advocates G. Mini, A. Kumar (Sr.), P. J. Anilkumar, P. S. Sree Prasad, Balasubramaniam R.

Counsel for the Respondents: Advocates Navaneeth N. Nath (CGC), Susie B. Varghese, Jose Joseph (Sr. SC)

Case No: WP(C) 19152 of 2024

Case Title: M. M. Varghese v Assistant Director of Income Tax

Citation: 2025 LiveLaw (Ker) 260

Click Here To Read/ Download Order