SC to examine PIL against I-T’s digital search powers
The 2025 Act, effective April 1, 2026, expanded search powers under Section 247, giving tax authorities the power to search income if there is “reason to believe” that it is confidential. This includes bypassing passwords, accessing emails/social media, and seizing devices.
A limited judicial review of the income tax department’s search actions has already been accepted in the 2022 judgment, a bench led by Chief Justice of India Surya Kant said under the law, tax authorities can search when there is “a reason to believe” that income is hidden.
According to the apex court, courts can examine whether there is a rational connection between the material held by the income tax authorities and the belief recorded to initiate a search. The Board stated that there are provisions allowing searches based on suspicion of impropriety to prevent the destruction of evidence.
The court also observed that most digital evidence is stored on devices or in the cloud, and without search warrants, investigations may fail. “There is the potential for evidence to be destroyed if a warning is issued for this search and seizure. The best way to eliminate such an investigation into digital records is to destroy the device itself,” he said.
Senior advocate Sanjay Hegde, appearing for the petitioner Vishwaprasad Alva, argued that the impugned provision provides undue power in the hands of the tax authorities and exposes not only the alleged tax evader but also third parties to coercive action.
