Section 278D — Presumption as to assets, books of account, etc., in certain cases
Case Laws & Commentary — Income-tax Act, 1961 (as amended by the Finance Act, 2026) — bharattax.co Treatise
Status: Live. Evidentiary presumption in prosecutions following search/requisition.
Finance Act, 2026: Not amended by the Finance Act, 2026.
Mechanism: Where assets/books found in a search (s.132) or taken into custody and requisitioned (s.132A) are tendered in evidence in a prosecution, the section 132(4A) presumption applies, so far as may be.
Litigation profile: Sparse — no direct merits authority; an evidentiary bridge to the section 132(4A) presumption.
A. COMMENTARY
Carrying the search presumption into the criminal trial
Section 278D is an evidentiary provision. Where money, bullion, jewellery or other valuable articles, or books of account or other documents, found in the possession or control of a person during a search under section 132 — or taken into custody and delivered to the requisitioning officer under section 132A — are tendered by the prosecution in evidence, the presumption in section 132(4A) shall, so far as may be, apply. Section 132(4A) raises a presumption that such books/assets belong to the person in possession, that their contents are true, and that signatures/handwriting are genuine. Section 278D thus carries that presumption from the assessment context into the criminal trial.
Rebuttable and dependent on a valid search
The presumption is rebuttable and operates 'so far as may be' — its weight in a criminal trial, where the standard is proof beyond reasonable doubt, is necessarily tempered by section 278E(2), which requires a fact to be proved only when the court believes it to exist beyond reasonable doubt. The presumption is also parasitic on a valid search/requisition; the constitutional validity of the section 132 power (Pooran Mal) is its foundation, and a search found to be without jurisdiction would deny the presumption its premise.
B. STATUTORY TEXT (verbatim — pre-Finance Act, 2026 text)
Text reproduced verbatim from the bare Act; section 278D is not amended by the Finance Act, 2026.
Presumption as to assets, books of account, etc., in certain cases.
278D. (1) Where during the course of any search made under section 132, any money, bullion, jewellery or other valuable article or thing (hereafter in this section referred to as the assets) or any books of account or other documents has or have been found in the possession or control of any person and such assets or books of account or other documents are tendered by the prosecution in evidence against such person or against such person and the person referred to in section 278 for an offence under this Act, the provisions of sub-section (4A) of section 132 shall, so far as may be, apply in relation to such assets or books of account or other documents.
(2) Where any assets or books of account or other documents taken into custody, from the possession or control of any person, by the officer or authority referred to in clause (a) or clause (b) or clause (c), as the case may be, of sub-section (1) of section 132A are delivered to the requisitioning officer under sub-section
(2) of that section and such assets, books of account or other documents are tendered by the prosecution in evidence against such person or against such person and the person referred to in section 278 for an offence under this Act, the provisions of sub-section (4A) of section 132 shall, so far as may be, apply in relation to such assets or books of account or other documents.
C. AUTHORITIES
No decision construes section 278D on its own (candour rule). It is understood through the section 132(4A) presumption and the search-validity jurisprudence on which it depends.
Cognate authority — section 132 search and the (4A) presumption
Pooran Mal v. Director of Inspection (1974) 93 ITR 505 (SC)
Citation (1974) 93 ITR 505 (SC).
Facts Constitutional challenge to search and seizure under section 132 and to the use of material so gathered.
Held / ratio Section 132 search and seizure is constitutionally valid; material gathered even in an irregular search is not, for that reason alone, inadmissible.
Significance The constitutional foundation of the presumption that section 278D carries into the criminal trial.
P.R. Metrani v. CIT (2006) 287 ITR 209 (SC)
Citation (2006) 287 ITR 209 / 5 SCC 161 (SC).
Facts Scope of the section 132(4A) presumption and whether it applies for all purposes including regular assessment.
Held / ratio The section 132(4A) presumption is confined to the summary, search-stage purposes (then sections 132(5)/132B) and is rebuttable; it does not, of itself, conclusively establish the contents for all purposes.
Significance Calibrates the weight a court may give to the presumption invoked by section 278D in a criminal trial.
CHAPTER XXII — OFFENCES AND PROSECUTIONS
Section 278D — Presumption as to assets, books of account, etc., in certain cases
Case Laws & Commentary — Income-tax Act, 1961 (as amended by the Finance Act, 2026) — bharattax.co Treatise
Status: Live. Evidentiary presumption in prosecutions following search/requisition.
Finance Act, 2026: Not amended by the Finance Act, 2026.
Mechanism: Where assets/books found in a search (s.132) or taken into custody and requisitioned (s.132A) are tendered in evidence in a prosecution, the section 132(4A) presumption applies, so far as may be.
Litigation profile: Sparse — no direct merits authority; an evidentiary bridge to the section 132(4A) presumption.
A. COMMENTARY
Carrying the search presumption into the criminal trial
Section 278D is an evidentiary provision. Where money, bullion, jewellery or other valuable articles, or books of account or other documents, found in the possession or control of a person during a search under section 132 — or taken into custody and delivered to the requisitioning officer under section 132A — are tendered by the prosecution in evidence, the presumption in section 132(4A) shall, so far as may be, apply. Section 132(4A) raises a presumption that such books/assets belong to the person in possession, that their contents are true, and that signatures/handwriting are genuine. Section 278D thus carries that presumption from the assessment context into the criminal trial.
Rebuttable and dependent on a valid search
The presumption is rebuttable and operates 'so far as may be' — its weight in a criminal trial, where the standard is proof beyond reasonable doubt, is necessarily tempered by section 278E(2), which requires a fact to be proved only when the court believes it to exist beyond reasonable doubt. The presumption is also parasitic on a valid search/requisition; the constitutional validity of the section 132 power (Pooran Mal) is its foundation, and a search found to be without jurisdiction would deny the presumption its premise.
B. STATUTORY TEXT (verbatim — pre-Finance Act, 2026 text)
Text reproduced verbatim from the bare Act; section 278D is not amended by the Finance Act, 2026.
Presumption as to assets, books of account, etc., in certain cases.
278D. (1) Where during the course of any search made under section 132, any money, bullion, jewellery or other valuable article or thing (hereafter in this section referred to as the assets) or any books of account or other documents has or have been found in the possession or control of any person and such assets or books of account or other documents are tendered by the prosecution in evidence against such person or against such person and the person referred to in section 278 for an offence under this Act, the provisions of sub-section (4A) of section 132 shall, so far as may be, apply in relation to such assets or books of account or other documents.
(2) Where any assets or books of account or other documents taken into custody, from the possession or control of any person, by the officer or authority referred to in clause (a) or clause (b) or clause (c), as the case may be, of sub-section (1) of section 132A are delivered to the requisitioning officer under sub-section
(2) of that section and such assets, books of account or other documents are tendered by the prosecution in evidence against such person or against such person and the person referred to in section 278 for an offence under this Act, the provisions of sub-section (4A) of section 132 shall, so far as may be, apply in relation to such assets or books of account or other documents.
C. AUTHORITIES
No decision construes section 278D on its own (candour rule). It is understood through the section 132(4A) presumption and the search-validity jurisprudence on which it depends.
Cognate authority — section 132 search and the (4A) presumption
Pooran Mal v. Director of Inspection (1974) 93 ITR 505 (SC)
Citation (1974) 93 ITR 505 (SC).
Facts Constitutional challenge to search and seizure under section 132 and to the use of material so gathered.
Held / ratio Section 132 search and seizure is constitutionally valid; material gathered even in an irregular search is not, for that reason alone, inadmissible.
Significance The constitutional foundation of the presumption that section 278D carries into the criminal trial.
P.R. Metrani v. CIT (2006) 287 ITR 209 (SC)
Citation (2006) 287 ITR 209 / 5 SCC 161 (SC).
Facts Scope of the section 132(4A) presumption and whether it applies for all purposes including regular assessment.
Held / ratio The section 132(4A) presumption is confined to the summary, search-stage purposes (then sections 132(5)/132B) and is rebuttable; it does not, of itself, conclusively establish the contents for all purposes.
Significance Calibrates the weight a court may give to the presumption invoked by section 278D in a criminal trial.