Income Tax 2025

Appearance

Powers to requisition. ​

248(1) ​

Where the approving authority, in consequence of information in his possession, has reason to believe that—

  • (a) any person to whom a summons under section 246(1), or notice under section 268(1) was issued to produce, or cause to be produced, any books of account or other documents or any information stored in an electronic media or a computer systems has omitted or failed to produce, or cause to be produced, such books of account or other documents, or any information stored in an electronic media or a computer systems as required by such summons or notice and the said books of account or other documents or such electronic media or computer systems have been taken into custody by any officer or authority under any other law in force; or
  • (b) any books of account or other documents or any information stored in an electronic media or a computer systems will be useful for, or relevant to, any proceeding under this Act and any person to whom a summons or notice as aforesaid has been or might be issued will not, or would not, produce or cause to be produced, such books of account or other documents or any information stored in an electronic media or a computer system on the return of such books of account or other documents or such electronic media or computer system by any officer or authority by whom or which such books of account or other documents or such electronic media or computer system have been taken into custody under any other law in force; or
  • (c) any assets represent either wholly or partly income or property which has not been, or would not have been, disclosed for the purposes of this Act by any person from whose possession or control such assets have been taken into custody by any officer or authority under any other law in force, then, the approving authority may authorise any, Joint Director or Joint Commissioner or Assistant Director or Assistant Commissioner or Income-tax Officer (hereinafter in this section and in section 489(2) referred to as the requisitioning officer) to require the officer or authority referred to in clause (a) or (b) or (c), to deliver such assets or books of account, other documents or such electronic media or computer system to the requisitioning officer.

248(2) ​

On a requisition being made under sub-section (1), the officer or authority referred to in clause (a) or (b) or (c), of that sub-section, shall deliver such assets or books of account or other documents or electronic media or computer system to the requisitioning officer either forthwith or when such officer or authority is of the opinion that it is no longer necessary to retain the same in his or its custody.

248(3) ​

Where any assets or books of account or other documents or electronic media or computer system have been delivered to the requisitioning officer, the provisions of sections 247(7) to (11), 250 and 251shall, so far as may be, apply as if such books of account or other documents or electronic media or computer system or assets had been seized under section 247 by the requisitioning officer from the custody of the person referred to in sub-section (1) (a) or (b) or (c), and as if for the words “the authorised officer”, occurring in any of the aforesaid sections 247(7) to (11), 250and 251, the words “the requisitioning officer” were substituted.

Explanation

Section Summary: ​

Section 248 of the Income Tax Act grants the approving authority (a senior tax official) the power to requisition (demand the delivery of) assets, books of account, documents, or electronic data stored in computers or media. This power is exercised when the authority believes that such items are relevant to tax proceedings but are not being produced voluntarily, or when they are in the custody of another government agency under different laws.

This section ensures that tax authorities can access critical information or assets that may be necessary for tax investigations, even if they are held by other agencies or individuals who are unwilling to cooperate.

Key Changes: ​

  1. Expanded Scope of Requisitioning: The section now explicitly includes electronic media and computer systems as items that can be requisitioned, reflecting the increasing reliance on digital records in tax compliance.
  2. Inter-Agency Cooperation: The section facilitates cooperation between tax authorities and other government agencies by allowing the requisitioning of assets or documents held by other agencies under different laws.
  3. Clarification on Custody: The section clarifies that requisitioned items can be delivered to tax authorities either immediately or when the holding agency no longer needs them.

Practical Implications: ​

  1. For Taxpayers:

    • If a taxpayer fails to produce requested documents or assets, the tax authorities can now requisition them from other agencies (e.g., enforcement agencies) that may have custody of these items.
    • Taxpayers must ensure that all relevant records, including digital data, are maintained and accessible, as failure to comply with summons or notices can lead to requisitioning.

  2. For Businesses:

    • Businesses must ensure proper documentation and storage of electronic records, as these can now be requisitioned by tax authorities.
    • Non-compliance with tax notices can result in requisitioning of critical business records, potentially disrupting operations.

  3. For Other Government Agencies:

    • Agencies holding assets or documents under other laws (e.g., enforcement agencies) must cooperate with tax authorities by delivering requisitioned items when requested.

Critical Concepts: ​

  1. Approving Authority: A senior tax official (e.g., Joint Director, Joint Commissioner) authorized to issue requisition orders.
  2. Requisitioning Officer: The tax officer (e.g., Assistant Director, Income-tax Officer) tasked with collecting the requisitioned items.
  3. Electronic Media and Computer Systems: Includes digital records, databases, and any electronically stored information relevant to tax proceedings.
  4. Custody Under Other Laws: Refers to assets or documents held by other government agencies under laws unrelated to taxation (e.g., enforcement or regulatory laws).

Compliance Steps: ​

  1. For Taxpayers:

    • Respond promptly to summons or notices issued under Sections 246(1) or 268(1).
    • Maintain accurate and accessible records, including digital data, to avoid requisitioning.

  2. For Other Agencies:

    • Upon receiving a requisition order, deliver the requested items to the tax authorities either immediately or when no longer needed for their own purposes.

  3. For Tax Authorities:

    • Ensure proper documentation and justification for requisitioning orders.
    • Follow the procedures outlined in Sections 247(7) to (11), 250, and 251 for handling requisitioned items.

Examples: ​

  1. Scenario 1: A taxpayer is issued a notice to produce financial records but fails to comply. The tax authority discovers that the records are in the custody of an enforcement agency due to an unrelated investigation. The approving authority can requisition these records from the enforcement agency.

  2. Scenario 2: A business is under investigation for tax evasion. The tax authority believes that critical digital records are stored on a server held by a regulatory agency. The approving authority can requisition the server or its data for tax proceedings.

  3. Scenario 3: An individual’s assets are seized by an enforcement agency under anti-money laundering laws. The tax authority suspects these assets represent undisclosed income. The approving authority can requisition the assets for tax assessment.

This section strengthens the tax authorities' ability to gather evidence and enforce compliance, particularly in cases involving digital records or inter-agency custody of assets.