In a significant development in the high-profile gold smuggling case involving Kannada actor Ranya Rao, a special court for economic offences in Bengaluru has allowed the Income Tax Department to interrogate her in prison. The court rejected objections raised by Rao’s legal counsel and granted permission to record her statement between June 11 and June 13 from 10 AM to 5 PM.
The I-T Department had sought to question the 33-year-old actor inside Bengaluru Central Prison to investigate her alleged use of “unexplained sources and cash” in the smuggling of 14.2 kg of gold, valued at ₹12.56 crore. Rao was arrested by the Directorate of Revenue Intelligence (DRI) on March 3 upon her arrival at the Bengaluru International Airport from Dubai.
The assistant director of I-T (Investigations) had moved an application last week, citing the need to record Rao’s statement under Section 131(1) of the Income Tax Act. The court ruled in favour of the department, stating that the Act confers powers akin to those of a civil court, thereby validating the recording of statements during an investigation.
Rao’s counsel, B S Girish, contended that such questioning under the I-T Act would infringe upon her constitutional rights under Article 22 and argued that the I-T and Customs Acts were distinct statutes. However, the special public prosecutor rebutted these claims, asserting the Department’s authority to probe large cash flows allegedly linked to the acquisition and sale of smuggled gold.
Rejecting Rao’s objections, the court observed:
“The powers vested under the Income Tax Act for investigation, including the recording of statements, do not violate constitutional safeguards, nor does the distinction between the Customs Act and the I-T Act bar concurrent investigations based on credible information.”
Timeline of the Gold Smuggling Case
- March 3, 2025: Ranya Rao arrested by DRI at Bengaluru Airport with 14.2 kg of concealed gold.
- March 9, 2025: Telugu actor and US citizen Tarun Konduru arrested as a co-accused.
- March 26, 2025: Hawala operator Sahil Jain arrested for allegedly receiving and laundering the smuggled gold.
- April 22, 2025: Preventive detention orders issued against all three under the COFEPOSA Act.
- June 3, 2025: Rao’s mother’s habeas corpus plea adjourned pending COFEPOSA advisory board decision.
Investigations have unearthed a broader smuggling syndicate allegedly involving over 100 kg of gold trafficked into India from Dubai during the 2024–25 period. The DRI claims that Sahil Jain was responsible for disposing of 49.6 kg of this gold and funnelling over ₹39 crore to Dubai through hawala channels.
Rao is also under scrutiny for allegedly misusing her stepfather’s official protocol privileges at Bengaluru Airport. Her stepfather, K Ramachandra Rao, is a senior IPS officer in Karnataka.
Both the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) have initiated separate probes into the criminal and money laundering aspects of the case. The ED has conducted searches linked to Rao, including at the premises of an education trust headed by Karnataka Home Minister G Parameshwara. The trust is alleged to have cleared credit card bills worth ₹40 lakh on behalf of Rao.
Although statutory bail was granted to Rao, Konduru, and Jain due to a delay in filing chargesheets by the DRI, their continued incarceration under the COFEPOSA Act ensures that investigations across multiple agencies remain active.
The Karnataka High Court is set to hear the habeas corpus petition filed by Rao’s mother later this month.
