The Supreme Court began its examination of a petition challenging the powers of the Income Tax (IT) Department to carry out search and seizure operations without prior notice, including the confiscation and inspection of digital devices such as mobile phones, laptops and cloud-stored data.
The plea questions provisions under the Income Tax Act, 1961, as well as similar clauses in the newly introduced Income Tax Act, 2025. The petitioner has argued that the law permits tax authorities to enter premises, access electronic records and seize digital equipment based on a “reason to believe” that tax evasion has occurred—without obtaining prior judicial approval.
According to the petition, these wide-ranging powers allow officials to examine personal communications, emails, financial data and social media accounts, potentially affecting not only the individual under investigation but also third parties. The plea contends that such searches amount to a serious invasion of informational privacy and violate fundamental rights guaranteed under Articles 14, 19 and 21 of the Constitution.
A three-judge Bench led by Chief Justice of India Surya Kant, along with Justices Joymalya Bagchi and NV Anjaria, briefly heard the matter and agreed to consider it further. The Court noted that the issue raises important constitutional questions, particularly in the context of digital data and privacy protections in the modern era.
During the hearing, concerns were raised about the absence of prior judicial scrutiny before conducting searches of electronic devices. The petitioner’s counsel argued that unchecked access to digital data could lead to misuse and disproportionate intrusion into private lives and business operations.
At the same time, the Bench observed that investigative agencies require effective tools to prevent the destruction or concealment of evidence, especially in cases involving digital records that can be easily altered or deleted. The Court also referred to earlier judgments that have upheld tax authorities’ search powers, subject to limited judicial review.
The petition seeks either the striking down of the impugned provisions or the introduction of safeguards such as mandatory judicial oversight before digital searches, clearer limits on data access, and protections against the misuse of seized information.
The case is expected to have far-reaching implications for how tax investigations are conducted in India, particularly as financial transactions and records increasingly move into digital spaces. Further hearings are awaited.
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