Section 246 of the Income-tax Act, 2025 — Power Regarding Discovery, Production of Evidence, etc. (Summons Powers)

In plain language

What Section 246 is all about

Section 246 of the Income-tax Act, 2025 gives income-tax authorities the same fact-finding powers that a civil court has under the Code of Civil Procedure, 1908 (CPC). In plain words, it lets tax officers summon people, put them on oath, demand documents, inspect records and issue commissions when they are conducting any tax proceeding, inquiry or investigation. It is the direct successor to the well-known Section 131 of the Income-tax Act, 1961, and effective 1 April 2026 it carries forward those "summons" powers into the new law.

The four core powers (CPC-style)

• Discovery and inspection — asking a person to disclose and let the officer inspect books, documents or information (including in electronic/computer form).
• Enforcing attendance — compelling any person, including an officer of a banking company, to appear and be examined on oath.
• Compelling production of documents — requiring books of account and other documents to be produced.
• Issuing commissions — appointing a person to record evidence or make a local inquiry on the officer's behalf.

Because these mirror a civil court, a false statement on oath before the officer can attract the same seriousness as lying in court.

Who can use these powers

The authorities named for regular proceedings include the Assessing Officer, Joint Commissioner, Joint Commissioner (Appeals), Commissioner (Appeals), Commissioner / Principal Commissioner, Chief Commissioner / Principal Chief Commissioner, and — notably new versus the 1961 language — the Dispute Resolution Panel (DRP).

Powers even without a pending case — the big change

Under Section 246(2), certain officers can exercise these powers "even when there are no proceedings pending" against a person or class of persons. This applies to:

• Assistant Commissioner / Deputy Commissioner level officers making an inquiry or investigation;
• senior Director/Director General level officials investigating concealed income;
• an authorised officer connected to search-and-seizure action under Section 247 (the successor to the old Section 132), before or during that action.

This makes the investigative reach wider than the 1961 position, where the power was more tightly linked to an existing proceeding.

Impounding and retention of books

An officer exercising these powers may impound and retain books of account or other documents. Important safeguards apply: the Assessing Officer or Assistant Director must record written reasons for impounding, and can retain them only up to 15 days (excluding holidays). Retention beyond 15 days needs the prior approval of the specified approving authority. This prevents documents from being kept indefinitely without accountability.

How it interacts with other sections

• Section 247 (search & seizure) — Section 246 supplies the summons/examination powers used alongside search operations.
• Assessment sections — evidence gathered here feeds into scrutiny and best-judgment assessments.
• Penalty & prosecution provisions — ignoring a valid summons, refusing to produce documents, or giving false evidence can expose a person to penalty and prosecution.

Practical implications for taxpayers

• A summons under Section 246 is a legal order, not a request — appear on the date given or seek adjournment in writing with reasons.
• Answer truthfully; statements are recorded on oath and can be used in assessment or appeal.
• You may attend with, or send, an authorised representative (CA/advocate) and should keep records organised and reconciled.
• If documents are impounded, ask for the reasons in writing and note the 15-day limit.