Power to collect certain information
[Section-254 as per the Income Tax Act, 2025 (this Act) w.e.f. 1st April, 2026.]
Section 254(1) of Income Tax Act 2025
254(1) Irrespective of anything contained in any other provision of this Act, an income-tax authority may, for the purposes of collecting any information which may be useful for, or relevant to, the purposes of this Act, enter––
- (a) any building or place within the limits of the area assigned to such authority; or
- (b) any building or place occupied by any person in respect of whom such authority exercises jurisdiction,
at which a business or profession is carried on, regardless of the fact that such place be the principal place or not of such business or profession and require any proprietor or employee or any other person, who may at that time and place, be attending in any manner to, or helping in, or carrying on of such business or profession, to furnish such information as prescribed.
Section 254(2) of Income Tax Act 2025
254(2) The income-tax authority may enter any place of business or profession referred to in sub-section (1) only during the hours at which such place is open for the conduct of business or profession.
Section 254(3) of Income Tax Act 2025
254(3) The income-tax authority acting under this section shall, on no account, remove or cause to be removed from the building or place wherein it has entered, any books of account or other documents or any cash or stock or other valuable article or thing.
Section 254(4) of Income Tax Act 2025
254(4) In this section, “income-tax authority” means––
- (a) a Joint Commissioner, or a Joint Director or an Assistant Director or an Assessing Officer; and
- (b) an Inspector of Income-tax, authorised by the Assessing Officer to exercise the powers conferred under this section in relation to the area in respect of which the Assessing Officer exercises jurisdiction or part thereof.
FAQs on Section 254 of Income Tax Act 2025
What is the main purpose of Section 254 of the Income Tax Act, 2025?
Section 254 empowers income-tax authorities to collect information useful or relevant for the purposes of the Act by entering specific premises where business or profession is carried on.
Who is authorised to collect information under Section 254?
Joint Commissioner, Joint Director, Assistant Director, Assessing Officer, and Inspectors of Income-tax (when authorised by the Assessing Officer) are empowered under this section.
Can the authority enter any building or place?
Yes, but only if the building or place falls within the area assigned to the authority or is occupied by a person under the authority’s jurisdiction and is used for carrying on a business or profession.
Does it matter whether the place is the principal place of business?
No, Section 254(1) explicitly states that the authority may enter the place regardless of whether it is the principal place of business or profession.
What time can the income-tax authority enter such premises?
As per Section 254(2), the authority may only enter during the hours when the place is open for the conduct of business or profession.
Can the income-tax authority remove any books, documents, or valuables from the premises?
No, Section 254(3) prohibits the authority from removing or causing the removal of any books of account, documents, cash, stock, or valuable items from the premises.
Who can be asked to furnish information during such entry?
Any proprietor, employee, or other person attending to, helping in, or carrying on the business or profession at the time and place of entry can be required to furnish information.
Is prior notice required before entering the premises?
Section 254 does not mention the requirement of prior notice before entry for the purpose of collecting information.
What is the scope of information that can be collected?
The information must be useful for or relevant to the purposes of the Income Tax Act, 2025, as per Section 254(1).
Can an Inspector act independently under this section?
No, an Inspector must be authorised by the Assessing Officer to act under Section 254.
What is the jurisdictional requirement for invoking Section 254?
The income-tax authority must be acting within their assigned area or have jurisdiction over the person whose premises are being entered.
Does Section 254 override other provisions of the Act?
Yes, it applies notwithstanding anything contrary contained in any other provision of the Act, as clearly stated in Section 254(1).
Is the power under Section 254 limited to investigation or assessment stages?
Section 254 is for collecting information and is not restricted to any particular stage like assessment or investigation; its purpose is general data collection relevant to the Act.
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