Power regarding discovery, production of evidence, etc.
[Section-246 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
Section 246(1) of Income Tax Act 2025
246(1) The Assessing Officer, Joint Commissioner, Joint Commissioner (Appeals), Commissioner (Appeals), Commissioner or Principal Commissioner, or Chief Commissioner or Principal Chief Commissioner and the Dispute Resolution Panel referred to in section 275(17)(a), shall, for the purposes of this Act, have the same powers as are vested in a court under the Code of Civil Procedure, 1908, when trying a suit in respect of the following matters:––
- (a) discovery and inspection;
- (b) enforcing the attendance of any person, including any officer of a banking company and examining him on oath;
- (c) compelling the production of books of account and other documents; and
- (d) issuing commissions.
Section 246(2) of Income Tax Act 2025
246(2) The powers conferred under sub-section (1) may also be exercised, in respect of any person or class of persons, even when there are no proceedings pending with respect to such person or class of persons, by the following income-tax authorities:––
- (a) any income-tax authority (not below the rank of Assistant Commissioner of Income-tax) notified by the Board, for the purposes of making any inquiry or investigation in relation to an agreement referred to in section 159;
- (b) the Principal Director General or Director General or Principal Director or Director or Joint Director or Assistant Director for the purposes of making any inquiry or investigation, if he has the reason to suspect that any income has been concealed, or is likely to be concealed; and
- (c) the authorised officer referred to in section 247(1), before taking action under section 247(1)(b)(i) to (viii), or during the course of such action.
Section 246(3) of Income Tax Act 2025
246(3) Any income-tax authority exercising the powers referred to in sub-sections (1) and (2) may, subject to the rules made in this behalf, impound any books of account or other documents produced before it in any proceeding under this Act.
Section 246(4) of Income Tax Act 2025
246(4) The Assessing Officer or the Assistant Director shall record the reasons for impounding any books of account or other documents under sub-section (3) and may retain such impounded books of account or other documents up to fifteen days (exclusive of holidays), or for such further period, with the prior sanction of the approving authority.
FAQs on Section 246 of Income Tax Act 2025
Who has the power to exercise the functions listed under Section 246(1) of the Income Tax Act, 2025?
The powers under Section 246(1) can be exercised by the Assessing Officer, Joint Commissioner, Joint Commissioner (Appeals), Commissioner (Appeals), Commissioner, Principal Commissioner, Chief Commissioner, Principal Chief Commissioner, and the Dispute Resolution Panel referred to in section 275(17)(a).
What kind of powers do the authorities under Section 246(1) possess?
They possess the same powers as a court under the Code of Civil Procedure, 1908 when trying a suit, specifically for discovery and inspection, enforcing attendance and examination on oath, compelling production of documents, and issuing commissions.
What are the four specific powers mentioned in Section 246(1)?
The four specific powers are:
(a) discovery and inspection;
(b) enforcing the attendance of any person and examining them on oath;
(c) compelling the production of books of account and other documents;
(d) issuing commissions.
Can these powers be used even if no proceedings are pending?
Yes, under Section 246(2), certain authorities can exercise these powers even when no proceedings are pending with respect to a person or class of persons.
Who can exercise powers under Section 246(2) in the absence of pending proceedings?
The following can exercise such powers:
(a) income-tax authority not below the rank of Assistant Commissioner notified by the Board for inquiries relating to an agreement under Section 159;
(b) Principal Director General, Director General, Principal Director, Director, Joint Director, or Assistant Director if there is suspicion of concealed income;
(c) the authorised officer under Section 247(1) either before or during the action specified under clauses (b)(i) to (viii) of that section.
What can be done with books of account or documents produced during proceedings?
Under Section 246(3), any income-tax authority exercising these powers may impound books of account or documents, subject to prescribed rules.
What conditions must be met to impound books of account or documents?
As per Section 246(4), the Assessing Officer or Assistant Director must record the reasons for impounding and can retain such documents for up to fifteen days (excluding holidays) or longer with prior sanction from the approving authority.
Who must approve the extended retention of impounded documents beyond fifteen days?
The approving authority must give prior sanction for retaining impounded books or documents beyond the initial fifteen days.
