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HC frowns at roving tax inquiry
June, 11th 2009
Here's relief for companies who live in fear of surprise raids from the I-T department. The Delhi high court said tax personnel cannot resort to snooping on companies as it amounts to 'invasion of privacy'.

The court termed a search operation by the department as a "serious invasion of privacy and freedom of citizens'' and held that the department can't indulge in "roving or fishing" exercises. The observations came in a case pertaining to a search operation on infrastructure major EMMAR MGF in 2007 when tax officials seized two laptops from the company's auditing and accounting firm. The laptops contained information pertaining to other clients, including Maytas, which was promoted by kin of Satyam founder Ramalinga Raju.

The court held since the exercise of the power is "an invasion" on the rights of the taxpayer, it must be exercised only for purposes for which the law permitted it to occur.
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