Search and Seizure Provisions under Income-tax Act, 2025

Search and seizure is the most intrusive power available to the Income-tax Department. Under the Income-tax Act, 2025, these provisions continue to exist, but with clear statutory thresholds, procedural safeguards, and post-search accountability.

A search is not routine assessment. It is an exceptional action that must strictly comply with law.

When Can Search and Seizure Be Initiated

A search can be authorised only when the competent authority has reason to believe, based on credible information, that a person:

Is in possession of undisclosed income or assets

Has failed or is likely to fail to produce relevant books or documents

Is attempting to conceal income or property

Search power is not based on suspicion. It requires legally sustainable information.

Authority and Scope of Search

Once authorised, the department may:

Enter and search premises

Break open locks where access is denied

Seize books, documents, cash, bullion, or valuables

Place marks of identification

Examine persons on oath

However, the scope of search must remain confined to the authorisation. Any excess renders the action legally vulnerable.

What Cannot Be Seized

The law also places limits on seizure powers.

Generally:

Stock-in-trade of business cannot be seized

Reasonable cash explained through books cannot be seized

Personal effects are protected

Search is not a license for confiscation.

Statements Recorded During Search

Statements recorded during search proceedings carry evidentiary value. However:

Coercive statements are legally unsustainable

Admissions must be voluntary

Retraction is permissible if supported by evidence

Under judicial scrutiny, documents outweigh oral statements.

Post-Search Assessment Proceedings

Search triggers special assessment procedures:

Assessment of multiple years

Determination of undisclosed income

Levy of tax, interest, and penalty

However, additions must be based on seized material, not conjecture.

The concept of roving post-search additions has been consistently rejected by courts.

Safeguards and Taxpayer Rights

Even during search, taxpayers have rights:

Right to see authorisation

Right to medical assistance

Right to female occupants’ dignity

Right against illegal seizure

Right to appeal against additions

Search power is subject to constitutional and judicial control.

Consequences of Illegal or Improper Search

If search action violates legal requirements:

Entire proceedings can be quashed

Additions may not survive appellate scrutiny

Department faces judicial criticism

Legality of initiation is often the first battleground in litigation.

Conclusion

Under the Income-tax Act, 2025, search and seizure provisions remain powerful but not absolute.

They operate within:

Defined legal thresholds

Procedural discipline

Strong appellate oversight

For taxpayers, knowledge of rights is protection.
For authorities, lawful exercise of power is sustainability.

Search is a weapon of law, not a tool of pressure.

Written by:
Abhishek Gupta
Chartered Accountant
Office No. 19, Sagar Building, 4th Floor, Plot-327,
Narshi Natha Street, Masjid Bunder (West),
Mumbai – 400009
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