Supreme Court flags challenges for IT officials if advance search notices are given

New Delhi: The Supreme Court on Tuesday highlighted the practical difficulties faced by investigators in the digital age and said giving a prior notice before a search and seizure could effectively end an investigation before it begins.

The top court was hearing a PIL challenging the scope of search and seizure powers under Section 132 of the Income Tax Act on the ground that it has the potential of misuse by the authorities.

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Section 132 of the Income Tax Act empowers IT officials to conduct a search and seizure when they have "reason to believe" that a person has undisclosed income, assets, or documents.

A bench comprising Chief Justice Surya Kant and Justices Joymalya Bagchi and N V Anjaria heard submissions by senior advocate Sanjay Hegde, appearing for PIL petitioner Vishwaprasad Alva, for some time and later deferred it for consideration after two weeks.

During the hearing, Justice Bagchi highlighted the practical challenges of issuing prior notice in search and seizure cases, particularly in the digital era.

Justice Bagchi said giving advance notice could defeat the very purpose of an investigation, as electronic evidence can be easily destroyed.

"If notice is given for search and seizure, there is a potential for destroying the evidence. The best way to snub out such an investigation against the digital record is to destroy the device itself," he said.

Hegde said the impugned provision provides excessive power in the hands of tax authorities and exposes not only the alleged tax evader but also third parties to coercive action.

"Suppose you go after the lawyer, then you go after the clerk's phone. Please see, it is not only the evading assessee who is at risk. Anybody in contact is at risk, and the power is kept with the Joint Commissioner," the senior lawyer said.

The CJI said the statutory powers were neither uncontrolled nor unbridled.

"This is not an uncontrolled or unwieldy power. Your concerns will go," the CJI said.