Section 253 — Powers of survey. Successor to s.133A of the 1961 Act.
Section 253 is in Chapter XIV — Tax Administration, which runs from section 236 to section 261.
Sub-section (1) lets an income-tax authority enter, notwithstanding anything else in the Act, any place at which a business or profession or an activity for charitable purpose is carried on, whether or not the principal place, where it is within the authority's assigned area, is occupied by a person over whom it exercises jurisdiction, or is one for which it has been authorised. On entry it may require any proprietor, trustee, employee or other person then attending to or helping in that activity to provide the necessary technical and other assistance, including access code, to enable inspection of books of account, other documents or information in electronic form or on a computer system available there; to provide facility to check or verify the asset or stock found there; and to furnish information on any matter useful for or relevant to a proceeding under the Act. Sub-section (2) extends such a place to any other place in which the person states that his books, documents, cash, stock, other valuable article or thing, or computer system relating to that activity are kept. Sub-section (3) fixes the hours: a business, professional or charitable place only during the hours it is open for that purpose, any other place only after sunrise and before sunset.
Sub-section (4) is a separate power for verifying deduction or collection of tax at source under Chapter XIX-B. Between sunrise and sunset the authority may enter any such office or place within its assigned area, or any place for which it is authorised or where the books, documents or computer system are kept, and may require the deductor, collector or other person then attending to that work to provide technical and other assistance including access code to enable inspection, and to furnish information on the matter.
Sub-section (5) lists what an authority may do: place marks of identification on books or documents inspected and make extracts or copies from them or from any computer system; record the statement of any person on oath; impound, after recording reasons, any books, documents or computer system inspected, retaining it up to fifteen days exclusive of holidays, or longer with the prior approval of the approving authority; and make an inventory of any asset or stock checked or verified. Sub-section (6) confines an authority acting under sub-section (4) to the actions in sub-sections (5)(a) and (5)(b), and sub-section (7) forbids removing any asset or stock from the place entered, on any account.
Sub-section (8) is the expenditure survey: having regard to the nature and scale of expenditure on a function, ceremony or event, the authority may after the event require the person who incurred it, or anyone likely to possess information about it, to furnish information, and may record statements on oath, which may thereafter be used as evidence in any proceeding.
Sub-section (9) gives the authority all the powers under section 246(1) to enforce compliance where a person refuses or evades. Sub-section (10) requires prior approval of the Principal Director General, Director General, Principal Chief Commissioner or Chief Commissioner before any action. Sub-section (11) defines "income-tax authority" for the section, including an Inspector of Income-tax only for sub-sections (1)(i), (5)(a) and (8), and defines "proceeding" to cover proceedings pending, completed, or later commenced for any year.
A survey lets the Department see a business as it is actually running — the stock on the floor, the entries on the machine, the person at the counter — without the safeguards and gravity of a search. The section therefore pairs a broad entry power with hard limits: fixed hours, no removal of assets or stock, a fifteen-day cap on impounded records without higher approval, prior approval before any survey, and a narrower power still where the visit is only to verify tax deducted at source.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Retention of impounded books of account, documents or computer system | Up to fifteen days, exclusive of holidays | Impounding must be after recording reasons; longer retention needs the approving authority's prior approval | Sub-section (5)(c)(i) and (ii) |
| Permitted hours for entry into a place of business, profession or charitable activity | Only the hours at which the place is open for that purpose | For any other place, only after sunrise and before sunset | Sub-section (3) |
| Permitted hours for a tax deduction or collection verification survey | After sunrise and before sunset | Entry under sub-section (4) for verifying that tax has been deducted or collected at source under Chapter XIX-B | Sub-section (4) |
| Approval required before any action under the section | Prior approval of the Principal Director General or the Director General or the Principal Chief Commissioner or the Chief Commissioner | Required before an income-tax authority takes any action under the section | Sub-section (10) |
The two survey powers are not the same, and confusing them is the commonest complaint. A sub-section (4) survey to verify tax deducted or collected at source is confined by sub-section (6) to marking and copying under clause (5)(a) and recording statements under clause (5)(b) — no power to impound, none to inventory stock. Even in a full survey, sub-section (7) is absolute: nothing may be removed, so cash and stock can be verified and inventoried but not taken. Impounding needs recorded reasons, and the fifteen-day retention runs exclusive of holidays, with anything longer needing prior sanction. Sub-section (8) is not an entry power at all — it operates after the function and works by requiring information and recording statements, which the sub-section itself makes usable as evidence.
An authority, with the prior approval sub-section (10) requires, enters a firm's shop during business hours, asks the manager for the access code to the billing system, takes copies of the ledgers, records his statement on oath and inventories the stock. It may impound the sale registers after recording reasons and keep them fifteen days exclusive of holidays, or longer with the approving authority's sanction, but it cannot carry away the cash in the till or the stock it has inventoried, because sub-section (7) forbids removal.
A taxpayer meets this section on the premises: the entry, the requisition for access codes and records, the inventory of stock, and the statement on oath later relied on in an assessment order. A deductor meets the narrower version in a tax deduction at source verification visit under sub-section (4), and a host meets sub-section (8) as a written requisition after a function or event.
An income-tax authority acting under this section shall, on no account, remove or cause to be removed from the place wherein it has entered, any asset or stock.
The income-tax authority acting under sub-section (4) shall only undertake the actions referred under sub-sections (5)(a) and (5)(b).
See the full 1961 to 2025 concordance.
See the circulars index.