Chapter XIV - Tax Administration
Section 246
Section 246: power regarding discovery, production of evidence, etc
Section 246 gives designated income-tax authorities the same powers a civil court has when trying a suit - covering discovery and inspection, summoning and examining witnesses under oath, compelling production of documents, and issuing commissions - along with the power to impound documents produced before them.
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This article is for general information. Refer to the Income-tax Act, 2025 as amended by the Finance Act, 2026 and the Taxation and Other Laws (Amendment) Act, 2026 for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
(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, 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 concealed, 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 documents 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.
Introduction
Section 246 gives specified income-tax authorities civil-court-like powers to require discovery, evidence and documents for Act proceedings. It also states when those powers can be exercised even if no proceeding is pending.
The impounding power has its own approval and retention conditions; requiring production and retaining a document are separate steps.
Key takeaways
Court-like inquiry powers
Specified tax authorities may require discovery, attendance, evidence on oath, document production and commissions for purposes of the Act.
No pending case always required
Specified investigation authorities can use these powers for inquiry even if no proceeding is pending before them.
Impounding has safeguards
An Assessing Officer or Assistant Director must record reasons; keeping material beyond fifteen days, excluding holidays, needs prior approval.
Civil-court powers
The Assessing Officer, Joint Commissioner, Joint Commissioner (Appeals), Commissioner (Appeals), Commissioner or Principal Commissioner, Chief Commissioner or Principal Chief Commissioner, and the Dispute Resolution Panel referred to in Section 275(17)(a), have the same powers as a court under the Code of Civil Procedure, 1908 when trying a suit, in respect of: discovery and inspection; enforcing attendance of any person (including a banking company officer) and examining them on oath; compelling production of books of account and other documents; and issuing commissions.
Exercise of these powers without pending proceedings
These powers may also be exercised - even where no proceeding is pending before that or any other income-tax authority - by:
- Any income-tax authority not below the rank of Assistant Commissioner, notified by the Board, for inquiry or investigation into an agreement referred to in Section 159
- The Principal Director General/Director General, Principal Director/Director, or Joint/Assistant Director, for inquiry or investigation into suspected concealment of income within their jurisdiction
- The authorised officer referred to in Section 247(1), before or during action under Section 247(1)(i) to (vii), where there is reason to suspect concealment of income
Impounding documents
An income-tax authority exercising these powers may, subject to prescribed rules, impound and retain in custody any books of account or other documents produced before it in a proceeding under the Act, for such period as it thinks fit.
The Assessing Officer or Assistant Director must record reasons for impounding books of account or documents, and may retain them for up to fifteen days (excluding holidays), or longer with the prior sanction of the approving authority.
Step-by-step flow for powers under Section 246
- 1
Is the authority one listed in Section 246(1)?
These are the Assessing Officer, Joint Commissioner, Joint Commissioner (Appeals), Commissioner (Appeals), Commissioner or Principal Commissioner, Chief Commissioner or Principal Chief Commissioner, and the Dispute Resolution Panel referred to in Section 275(17)(a).
- Yes: It has the powers of a civil court under the Code of Civil Procedure, 1908 for discovery and inspection, enforcing attendance and examining on oath (including bank officers), compelling production of books and documents, and issuing commissions. Skip to the impounding step (step 3).
- No: Go to the next step.
- 2
Is it an authority that may use these powers even with no proceeding pending (Section 246(2))?
(a) An authority not below Assistant Commissioner notified by the Board, for inquiry about an agreement referred to in Section 159; (b) a Principal Director General, Director General, Principal Director, Director, Joint Director or Assistant Director, for inquiry into concealment of income where there is reason to suspect it; (c) the authorised officer under Section 247(1), before or during action under Section 247(1)(i) to (vii), where there is reason to suspect concealment.
- No: Section 246 gives it no such powers.
- Yes: Go to the next step.
- 3
Are books of account or documents produced before the authority to be impounded?
Under Section 246(3) the authority may impound and retain them, subject to the rules made for this.
- 4
Are the reasons recorded and the retention period respected?
Under Section 246(4) the Assessing Officer or Assistant Director must record reasons and may retain them for up to fifteen days (exclusive of holidays), or longer only with the prior sanction of the approving authority.
Practical checklist
Do
- Read the summons or notice for the specific record or evidence requested and its response date.
- Keep an inventory and copy of any books or documents impounded, and request the recorded reasons and approval where applicable.
Avoid
- Assume every information request gives the authority an unlimited right to retain original documents.
Illustrative example
Worked example: summons and impounding during an assessment
Hypothetical facts (illustration only, not a real taxpayer): During a firm's assessment, the Assessing Officer summons a partner to produce the firm's ledgers and a bank officer to give evidence on oath about the firm's account. The partner produces the ledgers and the officer impounds them. Assume three holidays fall within the retention period.
Civil court powers
The Assessing Officer is listed in Section 246(1), so it can enforce attendance, examine the bank officer on oath and compel production of the ledgers.
Impounding
Section 246(3) allows the ledgers to be impounded, subject to the rules.
Retention period
The officer must record reasons. Without further sanction it may keep the ledgers for up to 15 days exclusive of holidays. With the assumed 3 holidays, that is 15 + 3 = 18 calendar days.
Longer retention
Keeping the ledgers beyond that needs the prior sanction of the approving authority (Section 246(4)).
Outcome
- The summons, examination on oath and impounding are within Section 246.
- The three holidays are assumed; the fifteen-day limit is from Section 246(4).
Frequently asked questions
Can income-tax authorities examine a bank officer under oath?
Yes - Section 246(1)(b) gives the specified authorities the civil court power to enforce attendance of any person, including an officer of a banking company, and examine them on oath.
How long can impounded books of account be retained?
Up to fifteen days, excluding holidays, unless a longer period is sanctioned by the prior approval of the approving authority - and the officer must record reasons for the impounding.
Do these powers require an ongoing assessment proceeding?
Not always - certain notified authorities can exercise these powers purely for inquiry or investigation into suspected concealment of income, or in connection with certain agreements, even without a proceeding pending before any income-tax authority.
Need help applying this provision to your situation?
Talk to our tax team about an income-tax inquiry or summonsLast updated 10 October 2026