PIL In Supreme Court Challenges New Income Tax Law Allowing Searches Of Digital Devices And “Virtual Digital Space”
Evan V
A public interest litigation (PIL) has been moved before the Supreme Court of India challenging the constitutional validity of expanded search-and-seizure powers proposed under the Income Tax Act, 2025, particularly provisions enabling searches of “computer systems” and “virtual digital space”, including personal devices, cloud infrastructure and electronic communications.
The petition under Article 32 has been filed by entrepreneur Vishwaprasad Alva. It assails Section 247 of the Income Tax Act, 2025—slated to take effect on April 1, 2026—along with corresponding provisions presently contained in Section 132 of the Income Tax Act, 1961.
At the heart of the challenge is the expansive definition of “computer systems” under the 2025 Act. According to the petition, the provision effectively permits Income Tax officials to access personal laptops, mobile phones, emails, private chats, cloud-stored data, electronic communications, and remote servers, and even to override passwords and access controls. The petitioner argues that this represents an unprecedented extension of traditional search and seizure powers into the digital sphere.
The plea contends that digital devices differ qualitatively from physical documents. They often contain vast volumes of sensitive personal, professional, and confidential information, far beyond the scope of any tax inquiry. Allowing unfettered access to such data, without prior judicial authorisation, is alleged to amount to a grave invasion of informational privacy protected under Article 21 of the Constitution.
A significant plank of the petition challenges clauses in Section 132 of the 1961 Act—replicated in Section 247 of the new law—that permit search and seizure based on a belief that a person “will not” or “would not” produce documents if summoned, or that assets “would not be disclosed” for tax purposes. The petitioner describes this as an “anticipatory search regime”, where highly intrusive powers can be exercised without any existing violation of law or proven non-compliance.
It is argued that the Income Tax law already provides less intrusive mechanisms such as summons, surveys, and assessments. Authorising full-scale digital searches on speculative grounds, the plea submits, fails the constitutional test of proportionality and necessity.
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Another core concern raised is the lack of independent oversight. Search authorisation under the Income Tax framework is granted internally by senior tax officials, without any requirement of approval from a judicial authority. Compounding this, the law expressly bars disclosure of the “reasons to believe” that form the basis of a search, even before appellate tribunals—a provision now incorporated as Section 249 of the Income Tax Act, 2025.
According to the petitioner, this secrecy renders meaningful judicial review illusory and violates principles of natural justice. The expansion of search powers into the digital domain, it is argued, makes such non-disclosure constitutionally untenable.
The matter was briefly heard by a Three Judge Bench of Chief Justice of India Surya Kant, Justice Joymalya Bagchi and Justice NV Anjaria. Senior Advocate Sanjay Hegde, assisted by Advocate-on-Record Pranjal Kishore, appeared for the petitioner.
While conceding that Section 132 of the Income Tax Act was upheld in Pooran Mal v. Director of Inspection, Hegde argued that the decision required reconsideration in light of the recognition of the right to privacy as a fundamental right in K.S. Puttaswamy v Union of India. He submitted that there are no adequate safeguards in the present framework, noting that the “reasons to believe” need not be disclosed and are insulated from effective judicial scrutiny, particularly after the 2017 amendment.
Justice Bagchi, however, pointed out that limited judicial review over the exercise of search powers had been recognised in Principal Director of Income Tax (Investigation) v Laljibhai KanjiBhai Mandalia.
During the hearing, Justice Bagchi posed a detailed query on the nature of discretion under Section 132, observing: "If a roving search under 132 is initiated, you come before us and call upon the department to produce the records, and if you find that there is no rational nexus between the material before the department and the reasonable belief recorded by them in their records, the entire procedure will be set aside. So that is all fact-specific. How can you say that the discretion is uncanalised? Two things operate there. A discretion which is not uncanalized, it is regulated by recording of reasons on the basis of information received by the concerned officers… So where can we say that the mechanism is unguided?"
Responding to concerns about anticipatory searches, Hegde argued that the provision allows search merely on the belief that an assessee will not comply with a summons. “Now the authority comes directly to the finding that look this is a fellow who does not deserve any notice because if I give him a notice, he may not answer or will not answer,” he submitted.
Justice Bagchi countered that the provision is intended to prevent destruction of evidence if advance notice is given. Elaborating further, he said: "He can destroy the evidence. Now if that potentiality is not covered, you see the extent to which the investigation gets made… when it comes to clause B or clause C, the degree of scrutiny of the court and judicial review will be higher than clause A… the higher degree of satisfaction is to be recorded."
Chief Justice Surya Kant also noted the risk of evidence destruction in the digital context, observing that incriminating electronic material could lead individuals to destroy the device itself. Justice Bagchi added: "Data in respect of most of the social media platforms, after the rules are amended, they have to keep the data within a server within the territory of India… So whatever digital evidence will always be in the hard disk or in the device. So to snub out the investigation, one can destroy the evidence."
While Hegde maintained that technological methods exist to retrieve deleted data, he stressed that clear guidelines were still necessary to prevent abuse of power.
Addressing apprehensions of excessive authority, the Chief Justice remarked that it was not an “uncontrolled power” and that certain “pre-conditions” existed. He added, “Today there is only an apprehension, let us see after the passage of time, how it is implemented.”
Justice Bagchi further observed that directions issued in the Mandalia judgment addressed many of the concerns raised. The bench accordingly adjourned the matter, asking the petitioner to examine the 2022 ruling in greater detail.
The petition seeks a declaration that provisions permitting searches of computer systems and virtual digital space are unconstitutional. In the alternative, it urges the Court to read down the law and mandate safeguards such as independent oversight, disclosure of reasons, and clear guidelines to ensure accountability.
Case Title : VISHWAPRASAD ALVA Vs UNION OF INDIA
Case No : W.P.(C) No. 114/2026
Bench: Chief Justice Surya Kant, Justice Joymalya Bagchi and Justice NV Anjaria
