A public interest petition before the Supreme Court has challenged expansive search and seizure powers granted to Income Tax authorities under the Income Tax Act, 2025, which authorise access to “computer systems” and “virtual digital space”, including personal electronic devices, cloud servers and private electronic communications.

The petition, filed under Article 32 by entrepreneur Vishwaprasad Alva, assails Section 247 of the Income Tax Act, 2025, scheduled to come into force from April 1, 2026, along with the corresponding provisions under Section 132 of the Income Tax Act, 1961.

The challenge is directed at provisions that permit searches based on an officer’s belief that a person “will not” or “would not” produce documents if summoned, or that assets “would not be disclosed” for tax purposes. According to the petitioner, these clauses create an “anticipatory” search framework, enabling intrusive action even in the absence of any existing violation of law.

A Bench comprising Chief Justice of India (CJI) Surya Kant, Justice Joymalya Bagchi and Justice N V Anjaria on Tuesday heard preliminary submissions by Senior Advocate Sanjay Hegde, assisted by Advocate-on-Record Pranjal Kishore, and adjourned the matter for further hearing next week.

Hegde acknowledged that Section 132 of the 1961 Act had been upheld by the Supreme Court in Pooran Mal v Director of Inspection (1974), but argued that the ruling must be revisited in light of the recognition of the right to privacy as a fundamental right in K S Puttaswamy v Union of India (2017). He submitted that the Income Tax Act provides no effective safeguards, particularly since the “reasons to believe” justifying a search need not be disclosed and are insulated from scrutiny even before appellate tribunals following a 2017 amendment.

Justice Bagchi, however, noted that the Supreme Court had recognised a limited scope of judicial review over the exercise of search powers under Section 132 in its 2022 decision in Principal Director of Income Tax (Investigation) v Laljibhai Kanjibhai Mandalia. He observed that courts can call for departmental records and examine whether a rational nexus exists between the material available with tax authorities and the belief recorded for initiating a search.

 “If a roving search is undertaken and there is no rational nexus between the material and the belief, the entire procedure can be set aside,” Justice Bagchi said, questioning the argument that the discretion under the provision was unregulated.

Hegde responded that the provision permits search and seizure merely on an apprehension that an assessee may not comply with a future summons.

 “The authority directly concludes that this person does not deserve notice because he may not respond,” he argued.

Justice Bagchi said the provision was intended to prevent destruction of evidence in cases where advance notice could frustrate an investigation. He added that where searches are authorised on grounds of anticipated non-cooperation or non-disclosure, courts would apply a higher standard of judicial scrutiny to ensure that such apprehensions are supported by material on record.

CJI Surya Kant observed that in cases involving electronic evidence, individuals could destroy the device itself. Justice Bagchi added that much digital evidence, particularly social media data, historically resided in the cloud or on foreign servers, limiting investigative access. Destroying devices, he noted, could effectively derail investigations.

Hegde countered that technological methods exist for data recovery but maintained that the law must prescribe clear safeguards to prevent abuse. The Chief Justice said the provision was not an “uncontrolled power” and operated subject to statutory preconditions. “At present, there is only an apprehension. Let us see how the law is implemented over time,” he said.

Justice Bagchi remarked that the directions issued in the Mandalia judgment addressed many of the concerns raised in the petition and asked counsel to re-examine the ruling in detail. The matter was accordingly adjourned.

At the core of the petition is Section 247 of the 2025 Act, which authorises searches not only of physical premises but also of “computer systems”, defined broadly to include computers, communication devices, electronic storage systems, cloud servers and what the law terms “virtual digital space”. The petitioner argues that this effectively permits access to personal laptops, mobile phones, emails, private messages and cloud-stored data, including by overriding access controls, without prior judicial authorisation.

The plea contends that this expansion of search powers into the digital domain constitutes a serious invasion of informational privacy under Article 21. It further argues that existing statutory tools such as summons, surveys and assessments are less intrusive alternatives, and that permitting full-scale digital searches on speculative grounds fails the constitutional test of proportionality.

The petitioner has sought a declaration striking down the challenged provisions, or a reading down of the law with safeguards such as independent oversight, disclosure of reasons and guidelines to prevent misuse of digital search powers.