Section 246 of the Income-tax Act, 2025 vests income-tax authorities with the powers of a civil court under the Code of Civil Procedure, 1908 for discovery and inspection, enforcing attendance and examining on oath, compelling production of documents, and issuing commissions.
What section 246 does
Section 246 is the summons power — the successor to section 131 of the Income-tax Act, 1961. It is the provision under which taxpayers and third parties are called to appear, produce records and give evidence on oath.
The authorities named have the same powers as are vested in a court under the Code of Civil Procedure, 1908 when trying a suit, in respect of four matters: discovery and inspection; enforcing the attendance of any person, including an officer of a banking company, and examining him on oath; compelling the production of books of account and other documents; and issuing commissions.
Sub-section (2) is the significant one. Certain authorities may exercise these powers even where no proceedings are pending against the person before them or any other income-tax authority — a standing investigative power rather than one incidental to an assessment.
The Income-tax Act, 2025 takes effect from 1 April 2026 and applies from tax year 2026-27. The Income-tax Act, 1961 continues to govern every year up to 31 March 2026, including assessments, appeals and penalties for those years, because of the repeal and savings provision in section 536. Figures quoted here are the amounts written into the Act as enacted (with the Gazette corrigenda of 3 September 2025); the annual Finance Act can change rates and thresholds.
Old Act and new Act, side by side
The table below shows what the Income-tax Act, 1961 did and where the same ground is covered in the Income-tax Act, 2025.
| Income-tax Act, 1961 | What it did | Income-tax Act, 2025 |
|---|---|---|
| 131(1) | Civil court powers of specified authorities | 246(1) |
| 131(1A) | Powers where no proceedings are pending | 246(2) |
| 131(2) | Powers for inquiries under an agreement | 246(2)(a) with 159 |
| 131(3) | Impounding and retention of books | 246(3) |
| 133 | Power to call for information | 252 |
| 132 | Search and seizure | 247 |
| 133A | Survey | 253 |
Section 246 sub-section by sub-section
Read this alongside the bare text — each heading below is a sub-section of the section as enacted.
Sub-section (1) — who has the powers, and what they are
The Assessing Officer, Joint Commissioner, Joint Commissioner (Appeals), Commissioner (Appeals), Commissioner or Principal Commissioner, Chief Commissioner or Principal Chief Commissioner, and the Dispute Resolution Panel referred to in section 275(17)(a), have the powers of a civil court under the Code of Civil Procedure, 1908 in respect of: (a) discovery and inspection; (b) enforcing the attendance of any person, including any officer of a banking company, and examining him on oath; (c) compelling the production of books of account and other documents; and (d) issuing commissions.
Sub-section (2) — powers without pending proceedings
The powers may also be exercised in respect of any person or class of persons by the following authorities even when no proceedings are pending before them or any other income-tax authority: (a) any income-tax authority not below the rank of Assistant Commissioner notified by the Board, for an inquiry or investigation in respect of an agreement referred to in section 159 — that is, a tax treaty; (b) the Principal Director General, Director General, Principal Director, Director, Joint Director or Assistant Director for an inquiry into concealment of income where there is reason to suspect it; and (c) the authorised officer under section 247(1), before or during a search, where there is reason to suspect concealment.
Why the 'no pending proceedings' limb matters
It is the statutory basis on which the investigation wing calls for information and records long before any assessment or reassessment is initiated. A summons under this limb is therefore not evidence that proceedings have begun — but the material gathered may later found a notice under section 280.
Sub-section (3) — impounding books
An income-tax authority exercising these powers may impound and retain books of account and other documents produced before it, subject to the conditions and time limits the sub-section specifies. Read it for the recording and approval requirements before agreeing to leave records behind.
The link to treaty inquiries
Clause (2)(a) expressly ties the power to inquiries under an agreement referred to in section 159 — the double taxation avoidance provision. This is how exchange-of-information requests from treaty partners are given effect domestically.
Worked example
Three summons issued in 2029, none of them during a pending assessment.
| Recipient | Purpose | Valid under section 246? |
|---|---|---|
| A taxpayer, from the Director (Investigation) | Inquiry into suspected concealment of income | Yes — sub-section (2)(b) |
| A bank officer, to attend and be examined on oath about an account | Enforcing attendance | Yes — clause (1)(b) names an officer of a banking company |
| A taxpayer, from a notified Assistant Commissioner | Inquiry under a tax treaty referred to in section 159 | Yes — sub-section (2)(a) |
| A taxpayer, from an Income-tax Officer with no pending proceedings and no clause (2) authority | General inquiry | Questionable — sub-section (2) lists who may act without pending proceedings |
The fourth row is the point worth checking on receipt of any summons. Where no proceedings are pending, the issuing authority must fall within one of the three categories in sub-section (2). A summons from an officer outside those categories, with nothing pending, is open to challenge on jurisdiction.
Compliance checklist and due dates
- On receiving a summons, identify the issuing authority and whether any proceedings are pending.
- Where nothing is pending, check that the authority falls within sub-section (2)(a), (b) or (c).
- Attend or seek an adjournment in writing; non-compliance can lead to a best judgment assessment under section 271 and penalty under section 465.
- Produce what is specifically called for; the power is to compel production of books of account and other documents.
- If records are impounded, obtain an acknowledgment and check the conditions and time limits in sub-section (3).
- Statements are recorded on oath under clause (1)(b) — prepare accordingly, since section 482 penalises a false statement in verification.
Common mistakes
- Assuming a summons means an assessment has begun; sub-section (2) permits inquiry with nothing pending.
- Ignoring a summons on the view that no proceedings exist.
- Leaving original records without an acknowledgment of impounding.
- Treating a statement on oath casually — it can found both assessment and prosecution.
This is an explanatory guide, not tax advice, and it does not reproduce the section in full. Read the bare text of the section before you rely on it, and check for later amendments, the Income-tax Rules made under the new Act, and CBDT circulars and notifications.