Income Tax Search and Seizure Under Income Tax Act 2025: Section 247 Guide

Income Tax Search explained: this guide covers what Income Tax Search means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.

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Key Highlights

• Search authorised under Section 247, ITA 2025 by Principal Commissioner or above
• Grounds: reason to believe undisclosed income or assets exist based on information
• Powers: search premises, vehicles, lockers, seize books, cash, jewellery, documents
• Assessment after search: Section 248 — assessment for 6 preceding years
• Seized assets: held for up to 120 days — released on providing security
• Penalty after search: 30%–60% of undisclosed income (in addition to tax)

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1. When Can Search Be Authorised?

A search can be authorised by the Principal Commissioner or above when there is reason to believe that:

• A person has suppressed income or assets not disclosed in returns
• Books, documents, or valuable articles are concealed and will not be produced
• The person is in possession of money, bullion, or assets not accounted for

The word "reason to believe" is important — there must be credible, specific information (not mere suspicion). Courts have held that search orders without proper reason to believe are invalid.

2. What Happens During a Search?

1. Officers arrive with a valid warrant authorising search at specific premises
2. They are entitled to search any part of the premises — including lockers, safes, vehicles, offices
3. All persons present can be required to stay during the search
4. Books, documents, electronic records, cash, jewellery, and other assets can be seized
5. A panchnama (seizure memo) is prepared in the presence of witnesses
6. The person being searched has the right to be present and to make statements

3. Taxpayer Rights During Search

• Right to see the search warrant — verify it is authorised by the correct authority
• Right to have a witness present during search
• Right to receive a copy of the panchnama (seizure memo)
• Right to inspect seized books and documents
• Right to make statements (but statements made during search can be used as evidence)
• Right to not answer self-incriminating questions

4. Assessment After Search: Section 248

After a search, the AO can assess income for up to 6 preceding Tax Years. The normal reassessment limitation periods are overridden — the search opens a fresh 6-year window regardless of earlier assessments. During this period, returns filed earlier may be re-examined and income assessed at higher values based on seized documents.

5. Penalty and Prosecution After Search

6. Why TaxClue

Facing an income tax search is stressful — proper handling during and after search is critical to minimise tax liability and avoid prosecution. TaxClue provides expert representation and post-search assessment advisory. Contact us if you have received a search or need pre-search advisory under ITA 2025.