A writ petition filed by Advocate Pranjal Kishore questioning the constitutional validity of the Income Tax Department’s powers to conduct digital search and seizure operations — including access to digital devices and online data — has been placed before the Supreme Court in Vishwaprasad Alva v. Union of India & Ors.
A Bench comprising Chief Justice of India (CJI) Surya Kant, Justice Joymalya Bagchi and Justice N.V. Anjaria briefly considered the matter on February 10 and adjourned it for further hearing after two weeks.
Court Flags Concerns Over Notice-Based Searches in Digital Era
During the preliminary hearing, the Bench reflected on the practical challenges of conducting searches in cases involving digital evidence. The Court observed that issuing prior notice before a search could potentially defeat the very purpose of an investigation.
“If notice is given for search and seizure, there is a real possibility of destruction of evidence. In the digital sphere, the simplest way to frustrate an investigation is to destroy the device itself,” the Bench remarked.
The Court’s observation underscores the tension between investigative efficacy and procedural safeguards in cases involving electronic records, encrypted data, and cloud-based storage.
Petitioner Argues Powers Extend Beyond Primary Suspects
Senior Advocate Sanjay Hegde, appearing for the petitioner, contended that the statutory framework under Section 132 of the Income Tax Act, 1961 — and corresponding provisions in the Income Tax Act, 2025 — confers excessively broad powers that extend beyond the intended target of investigation.
He argued that individuals indirectly connected to an assessee could be subjected to intrusive searches. “Suppose the department proceeds against a lawyer. They may then examine the clerk’s phone. The power is not confined to the alleged evading assessee — anyone in contact could be drawn into the net, and the authority rests with a Joint Commissioner,” Hegde submitted.
Justice Bagchi, however, responded that the situation described by the petitioner could equally justify the invocation of the statutory provisions. He noted that if notice were issued to an intermediary, the device could conveniently be claimed as “missing,” thereby impeding the inquiry.
Court Refers to Precedent Upholding Search Powers
CJI Surya Kant observed that the powers under challenge are not without safeguards and have previously been judicially scrutinized.
“This is not an uncontrolled or unwieldy power. Please see Principal Director of Income Tax (Investigation) v. Laljibhai Kanjibhai Mandalia. Your concerns may not survive in light of that judgment,” the CJI remarked, indicating that precedent may play a crucial role in evaluating the plea.
Challenge to Section 132 and Digital Search Provisions
The petition specifically assails Section 132 of the Income Tax Act, 1961, along with parallel provisions under the Income Tax Act, 2025. These provisions authorize tax authorities to conduct search and seizure operations without prior notice if they record a “reason to believe” that income has been concealed or tax laws violated.
The petitioner argues that the scope of these powers has significantly expanded in the digital age. Searches now reportedly encompass smartphones, emails, social media accounts, cloud storage, and encrypted communications. According to the plea, such searches can be undertaken without prior judicial authorization, and individuals may be compelled to disclose passwords or encryption keys.
Allegations of Misuse and Media Leaks
The petition cites a search conducted in November 2019 by the Directorate General of Income Tax (Investigation) at the petitioner’s residence and business premises. It is claimed that the operation was initiated despite the absence of material suggesting underreporting of income.
Although no incriminating evidence was allegedly recovered, the petitioner contends that misleading information regarding “large quantities of gold, unaccounted cash, and assets” was leaked to the media, causing reputational harm.
The plea asserts that there is no effective statutory mechanism to prevent misuse of search powers or to regulate post-search disclosures to the press.
Constitutional Grounds Raised
The petitioner has argued that the existing legal framework enables arbitrary exercise of authority, infringing fundamental rights guaranteed under the Constitution.
According to the plea, the absence of adequate safeguards and accountability mechanisms results in violations of:
- Article 19(1)(g) — the right to carry on any occupation, trade or business; and
- Article 21 — the right to life and personal liberty, including the right to privacy as recognized in K.S. Puttaswamy v. Union of India.
It is contended that unchecked search and survey powers undermine both business freedom and informational privacy.
Reliefs Sought
The petitioner has sought a declaration that the impugned provisions are unconstitutional. In the alternative, the plea urges the Supreme Court to direct the Central Board of Direct Taxes (CBDT) to frame comprehensive guidelines governing the conduct of search and seizure operations, handling and protection of digital data, disclosure norms relating to media communication, and a grievance redressal framework for those aggrieved by search actions.
