The Supreme Court on Tuesday said it will examine a public interest litigation challenging the expanded search and seizure powers granted to income tax authorities under the Income Tax Act, 2025, an Economic Times report said on Wednesday.
The petition questions provisions that allow searches of “computer systems” and “virtual digital space,” including the seizure of personal electronic devices, cloud servers and digital communications.
The Economic Times noted that the 2025 law, which comes into force on April 1, 2026, significantly widens the scope of search powers under Section 247. The provision authorises tax officials to carry out searches if they have “reason to believe” that income has been concealed, including powers to bypass passwords, access emails and social media accounts, and seize digital devices.
A bench headed by Chief Justice of India Surya Kant observed, as reported by the Economic Times, that the Supreme Court had already recognised the principle of limited judicial review of income tax search actions in its 2022 judgment.
Under that framework, courts can scrutinise whether there is a rational nexus between the material available with tax authorities and the belief recorded to justify a search.
The bench further said the law permits searches based on apprehension of non-compliance to prevent destruction of evidence, the Economic Times reported. The court acknowledged that much of today’s evidence exists in digital form, either on devices or on cloud platforms, and without adequate search powers, investigations could be rendered ineffective.
Highlighting the risks involved, the bench remarked that giving advance notice of a search could lead to evidence being destroyed. “If notice is given for this search and seizure, there is a potential for destroying the evidence. The best way to snub out such an investigation against the digital record is to destroy the device itself,” the court said, according to the Economic Times.
Appearing for the petitioner Vishwaprasad Alva, senior advocate argued that the challenged provision vests excessive power in the hands of tax authorities and exposes not just alleged tax evaders but also third parties to coercive action, the Economic Times reported.
