Search, Survey & Investigation — Sections 247, 248 & 253 [Income Tax Act, 2025]

Key Takeaways

• Section 247 (Search/Raid) of the Income Tax Act, 2025 (formerly Section 132) is the most intrusive power under the income tax law — authorized officers can enter premises, break open locks, seize assets, and record statements under oath.
• Section 253 (Survey) (formerly Section 133A) is a less intrusive power — officers can enter business premises during working hours, inspect books, and record statements, but cannot seize assets or break open locks.
• Section 248 (formerly Section 132A) allows requisition of assets already seized by other law enforcement agencies (police, customs, etc.).
• Section 292 (formerly Section 153A) mandates assessment/reassessment of 6 assessment years preceding the year of search (extendable to 10 years if undisclosed income exceeds Rs. 50 lakh).
• Section 295 (formerly Section 153C) extends the assessment to other persons whose assets or documents are found during the search of the primary person.
• The distinction between abated and unabated assessments is critical — for unabated years, additions can only be made based on incriminating material found during search.
• Statements recorded under Section 247(4) during search carry evidentiary value but can be retracted if shown to be involuntary or factually incorrect.

Section 247 — Search and Seizure (Raid)

A search under Section 247 of the Income Tax Act, 2025 (formerly Section 132 of the Income Tax Act, 1961) is the most potent investigative tool available to the Income Tax Department. It is commonly referred to as a "raid" in colloquial terms.

Prerequisites for Authorization

The Principal Director General or Director General, or Principal Chief Commissioner or Chief Commissioner, must have reason to believe that:

1. A person has been summoned under Section 246 (formerly Section 131) to produce books or documents and may not comply, OR
2. A person is in possession of money, bullion, jewellery, or other valuable articles representing wholly or partly undisclosed income, OR
3. A person is in possession of any books of account or documents that are not being or would not be produced in response to summons

The authorization must be in writing and must specify the premises to be searched and the person against whom the search is directed.

Powers of the Authorized Officer During Search

| Power | Detail | |-------|--------| | Enter and search | Enter any building, place, vessel, vehicle, or aircraft where reasons exist to suspect concealed assets/documents | | Break open locks | If the keys are not available, the officer can break open locks of any door, box, locker, safe, or receptacle | | Search persons | Search any person who has entered or is in the premises, if there is reason to suspect they are concealing assets | | Seize assets | Seize any books of account, documents, money, bullion, jewellery, or other valuable articles found | | Place identification marks | Place marks of identification on books, documents, and assets | | Prohibit removal | Restrain any person from removing assets from the premises during the search | | Record statements | Examine any person on oath under Section 247(4) | | Deemed seizure | Where it is impracticable to seize, the officer can make an inventory and prohibit the owner from dealing with the items | | Access digital evidence | Access and copy data from computers, electronic devices, cloud storage, and email accounts found on the premises |

Restrictions on the Search Team

• Search must be conducted in the presence of two or more respectable inhabitants of the locality as witnesses (Panchas)
• Female persons can only be searched by another female with strict regard to decency
• The search team must carry and produce the warrant of authorization on demand
• Officers must prepare a panchnama (a detailed inventory/record of the search proceedings)
• Seized assets must be handed over to the Assessing Officer within 60 days

What Can Be Seized?

| Can Be Seized | Cannot Be Seized | |--------------|-----------------| | Cash (exceeding normal business needs) | Stock-in-trade of business (unless it represents undisclosed income) | | Gold, silver, jewellery, precious stones (excess of disclosed holdings) | Jewellery within CBDT limits for women (500g married, 250g unmarried) unless evidence of undisclosed source | | Books of account, documents, electronic data | Items already disclosed and explained | | Undisclosed foreign currency | Personal effects not representing undisclosed income | | Loose papers, diaries containing financial entries | Items belonging to third parties (unless covered by the warrant) |

Duration and Conclusion

• There is no statutory time limit for the duration of a search operation — it can last from a few hours to several days
• The search concludes when the authorized officer is satisfied that all relevant assets and documents have been identified
• A final panchnama is drawn up recording all seized items, statements recorded, and observations made

Section 248 — Requisition of Assets

When any asset (money, bullion, jewellery, valuable articles, books, or documents) has already been seized or is being detained by any other officer or authority under any other law (police, customs, excise, enforcement directorate, etc.), the income tax authority can requisition such asset under Section 248 of the Income Tax Act, 2025 (formerly Section 132A) if they have reasons to believe it relates to undisclosed income.

Procedure

1. Principal Director General/Principal Chief Commissioner authorizes the requisition
2. Requisition is made to the officer or authority holding the asset
3. The asset is delivered to the income tax authority
4. Thereafter, the asset is dealt with as if it were seized during a search under Section 247

Practical Significance

This provision ensures that undisclosed assets discovered during police raids, customs operations, or enforcement directorate actions can be brought within the income tax net without the need for a separate search under Section 247.

Section 253 — Survey

A survey under Section 253 of the Income Tax Act, 2025 (formerly Section 133A) is a less intrusive power compared to a search. It is conducted to verify compliance, collect information, and inspect books of account.

Key Differences Between Search and Survey

| Parameter | Search (Section 247) | Survey (Section 253) | |-----------|---------------------|----------------------| | Authorization | By PDGIT/PCCIT/CCIT/DGIT | By PCIT/CIT or officer authorized by them | | Time | Can be conducted at any time | Only during business hours (9 AM to post-business closure) | | Premises | Any premises (business or residential) | Only business premises (not residential) | | Power to break locks | Yes | No | | Seizure of assets | Yes — cash, jewellery, bullion, documents | No seizure — only impounding of books/documents with prior approval of PCIT/CIT | | Recording statements | Under oath (Section 247(4)) — has evidentiary value | Not under oath (Section 253(3)(iii)) — limited evidentiary value | | Inventory | Detailed panchnama of all seized items | Inventory of cash, stock, and valuables found | | Search of persons | Yes | No |

Powers During Survey

1. Enter any place of business or profession
2. Inspect books of account and other documents found
3. Check and verify cash, stock, and other valuable articles
4. Record statements of any person available at the premises (not under oath)
5. Impound books and documents with prior approval of PCIT/CIT (must return within 15 days unless extended)
6. Place identification marks on books, documents, and inventoried articles

Statement Under Section 247(4) vs Section 253

| Feature | Statement u/s 247(4) (Search) | Statement u/s 253(3)(iii) (Survey) | |---------|-------------------------------|--------------------------------------| | Recorded under oath | Yes | No | | Evidentiary value | High — admissible as evidence | Limited — can be used for corroboration but not as primary evidence | | Legal consequence of false statement | Prosecution for perjury possible | No perjury liability (not on oath) | | Retraction | Can be retracted, but requires strong evidence and timely retraction | Easier to retract as not under oath |

Retraction of Statements

Statements made during search or survey can be retracted. However, the legal weight of a retraction differs:

• Search statements (Section 247(4)): Retraction must be prompt (ideally within days, not months). The assessee must provide cogent reasons and supporting evidence for why the original statement was incorrect. Delayed retractions are viewed with suspicion.
• Survey statements (Section 253): Since these are not under oath, retractions are more readily accepted. Courts have held that statements recorded during survey cannot be the sole basis for additions without independent corroborative material.

Section 292 — Assessment in Case of Search

This is the substantive provision that governs how assessments are made after a search operation under the Income Tax Act, 2025 (formerly Section 153A of the Income Tax Act, 1961).

Scope of Section 292

Upon issuance of notice under Section 292 after a search:

• The AO shall assess or reassess the total income of 6 assessment years immediately preceding the assessment year in which the search was conducted
• The assessment for the year of search is made under regular provisions (Section 270 or 271)
• If the AO has evidence of undisclosed income relating to assets found during search exceeding Rs. 50 lakh, the scope extends to 10 assessment years (the 6 years plus 4 additional years), subject to approval of PCIT/CIT

Abated vs Unabated Assessments — The Critical Distinction

| Type | When | Consequence | |------|------|-------------| | Abated assessment | Assessment for a year is pending (not yet completed) on the date of search | The pending assessment abates (gets cancelled) and a fresh assessment is made under Section 292 considering ALL material — both search and non-search | | Unabated assessment | Assessment for a year has already been completed before the search | The completed assessment can only be modified based on incriminating material found during the search — AO cannot make additions based on material already available pre-search |

This distinction is the cornerstone of post-search assessment law and has been the subject of extensive litigation.

Notice Under Section 292

• Must be issued within specified time limits from the end of the financial year in which the last authorization for search was issued
• The assessee must file a return for each of the 6 (or 10) assessment years within the time specified in the notice (usually 30 days)
• The AO can assess/reassess income that has escaped assessment, make additions, and pass assessment orders for each year

Section 295 — Assessment of Other Person

When during a search under Section 247, the AO is satisfied that any money, bullion, jewellery, valuable article, books of account, or documents found belong to or relate to a person other than the person searched, then:

1. The AO records this satisfaction in writing
2. The books/documents/assets are handed over to the AO having jurisdiction over the "other person"
3. That AO issues notice under Section 295 to the other person
4. Assessment is made for 6 assessment years (or 10 years where applicable) as if it were a search case

Example

During a search at the premises of Company X, documents are found showing that Mr. Y (a director) received undisclosed cash payments from Company X's unaccounted funds. The AO can invoke Section 295 to assess Mr. Y for 6 years based on the incriminating documents found at Company X's premises.

Block Assessment — Sections 292–299

The Finance Act 2024 reintroduced the concept of block assessment (now codified as Sections 292–299 of the Income Tax Act, 2025, formerly Section 158B onwards of the Income Tax Act, 1961) for searches initiated on or after 1 September 2024. Under this framework:

• The block period covers the year of search and the preceding 6 years
• Undisclosed income for the entire block is assessed in a single order
• Tax is levied at a flat rate of 60% (plus surcharge and cess) on the undisclosed income
• This replaces the earlier system of year-by-year assessment under Section 292 for new search cases

For searches initiated before 1 September 2024, the Section 292 year-by-year assessment framework continues to apply.

Landmark Judgements

Pullangode Rubber Produce Co. Ltd v State of Kerala — Supreme Court (1973)

Citation: (1973) 91 ITR 483 (SC)

Facts: During a search/inspection, a statement was obtained from the assessee under circumstances the assessee claimed were coercive.

Held: The Supreme Court held that a statement obtained through compulsion, coercion, or inducement does not have evidentiary value. Any confession or admission must be voluntary to be admissible. If the assessee can demonstrate that the statement was made under duress, threat, or undue influence, it cannot be used as the basis for additions.

Significance: This judgement is the foundation for challenging statements recorded during search operations under Section 247(4). While the Department argues that search statements carry presumptive value, this judgement establishes that the voluntariness of the statement is always open to challenge.

CIT v Kabul Chawla — Delhi High Court (2016)

Citation: (2016) 380 ITR 573 (Del)

Facts: After a search, the AO made additions for assessment years where the original assessment had already been completed (unabated years). The additions were based on material already available in the return and records, not on any new incriminating material found during the search.

Held: The Delhi High Court laid down the following principles for Section 292 (formerly Section 153A) assessments:

1. In cases of unabated assessments (already completed before search), the AO can make additions under Section 292 only on the basis of incriminating material found during the search or requisition.
2. In the absence of incriminating material, the completed assessment stands and the AO cannot disturb it merely by invoking Section 292.
3. For abated assessments (pending on the date of search), the AO has full power to assess income from all sources — both discovered and pre-existing material.
4. An assessment under Section 292 cannot be a roving and fishing inquiry.

Significance: This is the most frequently cited judgement in post-search assessment disputes. It established clear boundaries on the AO's powers under Section 292 and protected completed assessments from being reopened without new incriminating evidence. The ratio has been followed by multiple High Courts and ITAT benches across the country.

Worked Example: Post-Search Assessment Timeline

Scenario: A search under Section 247 is conducted at the residence and office of Mr. Rajesh Mehta (a real estate developer) on 15 November 2025 (Tax Year 2025-26).

Documents and assets found during search:

• Cash of Rs. 75,00,000 (declared cash balance in books: Rs. 5,00,000)
• Loose papers showing on-money receipts on property sales of Rs. 2,50,00,000
• USB drive with digital records of unaccounted transactions
• Gold jewellery valued at Rs. 30,00,000 (disclosed in wealth records: Rs. 12,00,000)

Assessment years covered under Section 292:

| AY | Status on Date of Search | Consequence | |----|-------------------------|-------------| | AY 2020-21 | Completed (order passed March 2023) | Unabated — additions only if incriminating material found | | AY 2021-22 | Completed (order passed December 2023) | Unabated — additions only if incriminating material found | | AY 2022-23 | Completed (processed u/s 270(1) only) | Unabated — Section 270(1) processing is considered completed assessment | | AY 2023-24 | Completed (order passed September 2025) | Unabated — additions only if incriminating material found | | AY 2024-25 | Pending (return filed but no order yet) | Abated — fresh assessment on total income | | AY 2025-26 | Pending (return not yet filed) | Abated — fresh assessment on total income | | AY 2026-27 | Year of search (return not yet due) | Regular assessment under Section 270/271 |

Since undisclosed income exceeds Rs. 50 lakh, the additional 4 years (AY 2016-17 to AY 2019-20) can also be reopened with PCIT approval.

Post-search assessment timeline:

| Date | Event | |------|-------| | November 2025 | Search conducted; panchnama prepared; statement recorded under Section 247(4) | | December 2025 | Seized assets handed to AO; Mr. Mehta's CA begins preparing documentation | | January 2026 | Notice u/s 292 issued for AY 2020-21 to AY 2025-26; separate notice for AY 2026-27 | | February 2026 | Mr. Mehta files returns for all years in response to Section 292 notice | | March-June 2026 | AO issues questionnaires, seeks explanations for incriminating material | | July-September 2026 | Multiple hearing dates; submissions and rebuttals exchanged | | October-December 2026 | Show cause notices for proposed additions in each year | | March 2027 | Assessment orders passed for all years under Section 292/270(9) | | April 2027 | Appeals filed before CIT(A) for years where additions are disputed |

Expert Tip: If you face a search or survey, remember these critical rights and steps:

During search:

• You have the right to call your CA or advocate (the search team may not allow physical presence immediately, but you can communicate by phone)
• Insist on the search being conducted in the presence of independent witnesses (Panchas)
• Before signing the panchnama, read it carefully and note any objections on the panchnama itself
• Do not volunteer information beyond what is specifically asked — statements under Section 247(4) have evidentiary value
• Cooperate with the search team — non-cooperation can lead to adverse inferences and best judgement assessment under Section 271
• Women and children have the right to be treated with dignity — female members can only be searched by female officers
• Keep a personal record of what was seized and what transpired during the search

After search:

• Engage a qualified CA or tax advocate immediately to review the seized material and plan the assessment strategy
• If you made any statement during the search that was factually incorrect or made under pressure, file a retraction at the earliest (ideally within days, supported by documentary evidence)
• Maintain complete documentation for all years likely to be covered under Section 292
• File responses to Section 292 notices meticulously within the prescribed time

Frequently Asked Questions

1. Can the Income Tax Department search my residential premises?

Yes. Section 247 authorizes search of any building, place, vessel, vehicle, or aircraft. Unlike survey (Section 253), which is limited to business premises during business hours, a search can be conducted at residential premises at any time. However, the authorized officer must have the warrant of authorization specifying the premises.

2. Can the search team seize my gold jewellery?

The CBDT Instruction No. 1916 provides that gold jewellery to the extent of 500 grams for a married woman, 250 grams for an unmarried woman, and 100 grams for a male member need not be seized, even if not explained by disclosed income. Beyond these limits, the search team can seize jewellery if it is not satisfactorily explained. However, even within these limits, the AO can still question the source of the jewellery during assessment proceedings.

3. What is the difference between a statement under Section 247(4) and Section 253?

A statement under Section 247(4) (during search) is recorded under oath and has strong evidentiary value — it can be used as substantive evidence for making additions. A statement under Section 253 (during survey) is not under oath and has limited evidentiary value — courts have held it cannot be the sole basis for additions without corroborative evidence. The Pullangode Rubber case principle (involuntary statements not valid) applies to both.

4. If no incriminating material is found for a particular year, can the AO still make additions under Section 292?

For unabated years (where assessment was already completed before the search), the answer is No — as held in CIT v Kabul Chawla and subsequent decisions. The AO can only make additions based on incriminating material found during the search. For abated years (where assessment was pending), the AO can make additions based on all available material, including pre-existing information, as the original assessment has abated and a fresh assessment is being made.

5. Can I retract a statement I made during the search?

Yes, you can retract a statement made under Section 247(4). However, for the retraction to be effective, it must be: (a) prompt — filed as soon as possible after the search (ideally within days or weeks, not months); (b) supported by evidence — you must provide documentary or other evidence showing why the original statement was incorrect; (c) explain the circumstances — such as pressure, fatigue, confusion during the prolonged search operation. Late and unsupported retractions are generally not given weight by the AO or appellate authorities.