Section 246 — Discovery and Production of Evidence | ITA 2025

Section 246 — - POWER REGARDING DISCOVERY / PRODUCTION OF EVIDENCE

Section 246 is the substantive equivalent of 1961 s. 131 -- vesting in income-tax authorities (AO / Joint CIT / Pr CIT / etc.) the SAME POWERS as a CIVIL COURT under the Code of Civil Procedure 1908 / Bharatiya Nagarik Suraksha Sanhita 2023 in matters of: (a) discovery and inspection of books / documents; (b) enforcing attendance of witnesses / persons; (c) compelling production of books / documents; (d) issuing commissions; (e) examining persons on oath. The provision provides the COURT-EQUIVALENT INVESTIGATIVE POWER for income-tax authorities while CONDUCTING INQUIRY / ASSESSMENT / SEARCH / SURVEY / OTHER PROCEEDINGS. Critical for tax-administration enforcement; also imports CPC procedural protections.

Statutory text — Income-tax Act, 2025

Marginal note -- Power regarding discovery / production of evidence

(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 (5 of 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.

(2) The powers conferred under sub-section (1) may also be exercised in respect of any person or class of persons by the following income-tax authorities (even when there are no proceedings pending with respect to such person or class of persons before them or any other income-tax authority):––

(a) any income-tax authority (not below the rank of Assistant Commissioner of Income-tax) notified by the Board in this behalf, for the purposes of making any inquiry or investigation in respect of 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 in relation to any concealment of income, if he has the reason to suspect that any income has been so con- cealed, or is likely to be so concealed by such person or class of persons within his jurisdiction; and

(c) the authorised officer referred to in section 247(1), before taking action under section 247(1)(i) to (vii), or during the course of such action, if he has reason to suspect that any income has been concealed, or is likely to be concealed by such person or class of persons within his jurisdiction.

(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 and retain in its custody for such period as it thinks fit any books of account or other documents63 produced before it in any proceeding under this Act.

(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. Search and seizure.

Corresponding provision — 1961 regime

INCOME-TAX ACT, 2025	INCOME-TAX ACT, 1961
INCOME-TAX ACT, 2025 -- s. 246	INCOME-TAX ACT, 1961 -- s. 131
Sub-s. (1) -- Civil-court powers vested in tax authorities	1961 s. 131(1)
Sub-s. (1)(a)-(d) -- Discovery / Witnesses / Documents / Commissions	1961 s. 131(1)(a)-(d)
Sub-s. (1A) -- Powers in absence of pending proceeding	1961 s. 131(1A)
Sub-s. (3) -- Penalty / consequences for non-compliance	1961 s. 131(2)

STATUTORY ARCHITECTURE -- COURT-EQUIVALENT POWERS

Section 246 vests INCOME-TAX AUTHORITIES with FOUR specific civil-court powers: (I) DISCOVERY AND INSPECTION (sub-s. 1(a)): authority can demand inspection of books / records / documents / electronic records held by assessee or third party. (II) ENFORCING ATTENDANCE (sub-s. 1(b)): authority can SUMMON any person / witness for personal attendance and examination on oath. Failure to attend = civil-contempt-equivalent. (III) COMPELLING PRODUCTION (sub-s. 1(c)): authority can compel production of books / documents / records by summons. (IV) ISSUING COMMISSIONS (sub-s. 1(d)): authority can issue commission for examination of witnesses / inspection of documents in another jurisdiction (typical: out-of-jurisdiction witness; foreign witness via MAP / DTAA). POWERS UNDER S. 246 EXERCISABLE: (a) During pending assessment proceedings; (b) During inquiry under s. 268 (s. 142); (c) During search and seizure (s. 247); (d) During survey (s. 253); (e) Under sub-s. (1A): even WITHOUT pending proceeding -- for general inquiry. ELIGIBLE OFFICERS: AO / Joint CIT / Joint Director / Pr CIT / etc. (per s. 236 hierarchy).

CPC PROCEDURAL FRAMEWORK

CPC POWERS imported imply CPC PROCEDURAL PROTECTIONS: (a) WITNESS RIGHTS -- right to be examined fairly; questions confined to relevant facts; cross-examination opportunity in adversarial proceedings; (b) PRIVILEGED COMMUNICATIONS -- attorney-client / spousal / banking confidentiality preserved (subject to specific overrides); (c) SELF-INCRIMINATION -- Article 20(3) Constitutional protection (limited application in tax matters); (d) DOCUMENT PRIVILEGE -- legal opinions / litigation strategy documents typically privileged. PENALTIES (sub-s. 3): non-compliance with summons / non-production attracts penalty under s. 272A (1961 s. 131(2)). Civil-contempt-style consequences.

PRACTITIONER NOTES

(i) SUMMONS RESPONSE -- attend; document attendance; record proceedings; preserve right to remain silent on privileged matters. (ii) DOCUMENT PRODUCTION -- comprehensive but legitimate; non-production = penalty + adverse inference. (iii) PRIVILEGED COMMUNICATIONS -- legal opinions / litigation-strategy documents privileged; assert privilege. (iv) WRIT REMEDY -- if frivolous summons / unauthorised, writ at HC available. (v) WITNESS PROTECTION -- third-party witnesses summoned have CPC rights; reasonable scope; cannot be compelled in unrelated matters. (vi) FOREIGN COMMISSION -- for foreign witness / documents, MAP under s. 159 / DTAA Article 26 commission route.

CROSS-REFERENCES

Section 247 -- Search and seizure (powers exercisable during).
Section 252 -- Power to call for information.
Section 253 -- Powers of survey.
Section 268 -- Inquiry before assessment.
Section 272A -- Penalty for non-compliance.
Code of Civil Procedure 1908 / Bharatiya Nagarik Suraksha Sanhita 2023.
Constitutional Article 20(3) -- self-incrimination.

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