In this guide
Section 247 of the Income-tax Act, 2025 deals with search and seizure, commonly referred to as an Income Tax raid. It is an extraordinary power available to the Income Tax Department where credible information indicates possible undisclosed income, black money, undisclosed assets, non-production of records or other material relevant to tax proceedings.
A search is not meant to be conducted casually. The Department must have information in its possession, a statutory reason to believe, and proper authorization before the search powers under Section 247 can be exercised.
When Can an Income Tax Search Be Conducted?
Section 247(1) broadly covers two important situations.
1. Books, Documents or Electronic Records Are Not Produced
A search may be authorised where a taxpayer has received a summons or notice requiring production of:
- Books of account;
- Documents;
- Information in electronic form; or
- Information available on a computer system,
but has failed to produce the required material.
A search may also be authorised proactively where the Department has reason to believe that, even if a notice or summons is issued, the person will not or would not produce information relevant to income-tax proceedings.
For example, where credible information indicates that records may be deleted, manipulated or removed after receipt of a notice, the Department is not necessarily required to wait for the evidence to disappear before taking action.
2. Undisclosed Income or Property Is Suspected
Search proceedings may also be initiated where the Department has information suggesting that a person possesses an asset, or information relating to an asset, representing wholly or partly undisclosed income or property.
Such assets may include:
- Cash;
- Jewellery;
- Undisclosed property;
- Foreign assets;
- Virtual digital assets;
- Undisclosed bank accounts; or
- Other valuable assets connected with unreported income.
Three Important Requirements Before a Search
| Requirement | Practical meaning |
|---|---|
| Information | The Department must possess relevant information |
| Reason to believe | There must be a reasonable basis for initiating search proceedings |
| Proper authorization | The search must be undertaken by a duly authorised officer |
Rumours or general suspicion alone are not the basis contemplated by Section 247. Search and seizure is a statutory proceeding and the powers must be exercised within the framework provided under the Act.
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Who Can Be an Authorised Officer?
Section 247 provides for authorization of prescribed Income Tax authorities for conducting the search.
Depending on the authorization structure, officers involved may include:
- Joint Director;
- Joint Commissioner;
- Assistant Director;
- Assistant Commissioner; and
- Income Tax Officer.
The important point is that the officer exercising search powers must be properly authorised. An officer cannot simply conduct a search at any premises without the statutory authorization contemplated by the section.
What Powers Does the Income Tax Department Have During a Raid?
Once a valid search has been authorised, Section 247 gives extensive powers to the authorised officer.
Enter and Search Premises
The authorised officer can enter and search a:
- House;
- Office;
- Warehouse;
- Godown;
- Building or other place;
- Vehicle;
- Vessel; or
- Aircraft,
where the authorised officer has reason to suspect that relevant books, assets, documents or electronic information are kept.
The authorization remains important. The power does not mean that officers can randomly search unrelated premises.
Locks and Lockers Can Be Opened
If access is not provided, the authorised officer can break open the lock of a:
- Door;
- Box;
- Locker;
- Safe;
- Almirah; or
- Other receptacle.
This power is intended to ensure that evidence cannot be withheld simply by refusing to provide a key.
Access to Computers and Electronic Information
One of the most practically significant areas of Section 247 is electronic data.
A person controlling electronic records or a computer system may be required to provide reasonable technical assistance, including the necessary access code.
Accordingly, during an authorised search, the Department may inspect relevant information contained in computers and other electronic systems and may make copies or extracts of such records.
The Income-tax Act, 2025 came into force from 1 April 2026. For searches initiated on or after that date, Section 247 applies, while searches initiated before 1 April 2026 continue under the corresponding provisions of the earlier Income-tax Act, 1961.
Can People Present at the Premises Be Searched?
Yes, subject to the statutory conditions.
Where the authorised officer has reason to suspect that a person entering, leaving or present at the searched premises is carrying concealed books, documents, electronic information, computer systems or assets, that person may also be searched.
Therefore, the power is not necessarily restricted only to the proprietor, director or taxpayer.
Depending on the facts, it may become relevant to:
- Employees;
- Directors;
- Partners;
- Accountants;
- Other staff; or
- Another person present at the premises.
Books, Documents and Digital Data Can Be Copied
During the search, officers can place identification marks on books and documents and can take extracts or copies.
Copies may also be made from computer systems.
This allows the Department to preserve evidence for subsequent investigation and assessment instead of depending entirely on physical records.
What Can Be Seized?
The authorised officer may seize relevant:
- Cash;
- Jewellery;
- Books of account;
- Documents;
- Computer systems;
- Hard disks; and
- Other assets covered by the search provisions.
However, stock-in-trade of a business is specifically excluded from seizure under this power. The Department can prepare an inventory of the stock found during the search, but the stock-in-trade itself is not seized in the same manner. The prescribed search authorization also specifically distinguishes stock-in-trade from assets that may be seized.
Inventory Can Be Prepared During Search
The authorised officers can prepare a detailed inventory recording what was found at the premises.
This may cover:
- Cash found;
- Jewellery found;
- Stock available;
- Documents and records;
- Electronic information; and
- Other relevant assets or material.
Such documentation becomes an important part of the search record and subsequent proceedings.
Practical Compliance During an Income Tax Search
Search and seizure proceedings are serious and should be handled carefully. A taxpayer should avoid destroying, hiding, deleting or manipulating records.
Where authorised officers require access to accounts, documents or computer systems within the scope of the search, proper cooperation should be maintained while simultaneously keeping a clear record of documents and assets examined or taken by the Department.
Where a search subsequently results in an assessment, demand, penalty or appeal, professional review becomes important because the case may involve substantial documentary and procedural issues.
For professional tax appeal assistance, visit TaxClear Tax Appeal Services:
Frequently Asked Questions
What is Section 247 of the Income-tax Act, 2025?
Section 247 deals with the Income Tax Department’s powers relating to search and seizure.
Can the Income Tax Department conduct a raid without information?
Section 247 requires information in the possession of the competent authority and the prescribed reason to believe before search authorization is issued.
Can Income Tax officers access computers during a raid?
Yes. During a valid search, the authorised officer can require reasonable technical assistance and access necessary to inspect relevant electronic information and computer systems.
Can the Department break open a locker?
Yes. Where the key or required access is unavailable, Section 247 permits the authorised officer to break open specified locks or lockers for exercising the search powers.
Can cash and jewellery be seized?
Relevant cash, jewellery and other assets covered by the search provisions may be seized subject to the statutory conditions.
Can business stock be seized during an Income Tax raid?
Stock-in-trade of the business is excluded from seizure under Section 247(1). However, the Department can examine it and prepare a detailed inventory.
