I-T searches, a form of extra-constitutional power – Impact of the Puttaswamy Verdict on the Interpretation of Section 132 of the Income Tax Act | 4 January 2024 | UPSC Daily Editorial Analysis

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What's the article about?

  • It talks about the implications of the Puttaswamy verdict on the interpretation of Section 132 of the Income Tax Act in India. It highlights the conflict between the fundamental right to privacy and the extensive powers of search and seizure granted to the tax authorities under the Act.


  • GS2: Government Policies and Interventions for Development in various sectors and Issues arising out of their Design and Implementation


  • The landmark 2017 Puttaswamy judgment by the Supreme Court of India established a fundamental right to privacy for individuals.
  • Despite this, the court's interpretation of statutes like the Income Tax Act often remains unchanged, leading to a culture of judicial deference to executive authority.
  • This article examines the dissonance between the promise of Puttaswamy and the reality of unchecked executive power in the context of income-tax searches.

Puttaswamy Judgment

  • On August 24, 2017, a nine-judge panel of the Supreme Court of India issued a major decision preserving the basic right to privacy guaranteed by Article 21 of India's constitution.
  • Article 21 of the Constitution reads as: “No person shall be deprived of his life or personal liberty except according to procedure established by law.”
  • Privacy is to be an intrinsic component of Part III of the Indian Constitution, which lays down people’s fundamental rights, according to the ruling.
  • The Supreme Court further declared that the state must strike a careful balance between individual privacy and the legitimate goal, at all costs, because fundamental rights cannot be granted or taken away by legislation, and all laws and activities must be consistent with the constitution.
  • The Court also stated that the Right to Privacy is not absolute and that any invasion of privacy by a state or non-state actor must pass the triple test, which includes the following:
    • Legitimate Aim
    • Proportionality
    • Legality


  • Power of Search and Seizure:
    • Section 132 of the Income Tax Act empowers the revenue authorities with extensive search and seizure powers, raising concerns about individual privacy and due process.
    • Notably, unlike searches under the Code of Criminal Procedure, income-tax searches do not require prior judicial authorization.
  • Shadow of M.P. Sharma:
    • India's income-tax law initially lacked search and seizure powers. The Taxation on Income (Investigation Commission) Act (1947) was struck down for violating equal treatment.
    • Section 132 was introduced in 1961 and upheld by the Supreme Court in Pooran Mal v. Director of Inspection (1973).
    • The 1973 Pooran Mal judgment relied heavily on M.P. Sharma, which upheld the constitutionality of Section 132.
    • However, M.P. Sharma was decided before the Puttaswamy judgment and its interpretation of fundamental rights.
    • Today, the right to privacy under Puttaswamy is intertwined with the right to personal liberty under Article 21, making the state's power to search and seize subject to the principle of proportionality.
  • Doctrine of Proportionality: For a search to be lawful under the doctrine of proportionality, it must:
    • Have a legitimate aim: The purpose of the search must be valid and important.
    • Be rationally connected: The chosen method of search must be logically linked to achieving the aim.
    • Be the least intrusive option: No less intrusive means should be available for achieving the same goal.
    • Balance the means and the right: The harm to the individual's right to privacy must be proportionate to the importance of achieving the search's aim.

Wednesbury Principle

  • The Wednesbury principle is a judicial principle in UK law that states that a decision of a public authority will be quashed by the courts if it is so unreasonable that no reasonable person acting reasonably could have made it.
  • It is named after the case of Associated Provincial Picture Houses Ltd v Wednesbury Corporation (1948).
  • The Wednesbury principle is one of the main grounds for judicial review of administrative decisions. Judicial review is the process by which the courts can review the decisions of public authorities to ensure that they are lawful and have not been made on the basis of an error of law or fact.
  • The Wednesbury principle is a relatively low threshold for judicial intervention. It means that the courts will only intervene if the public authority's decision is so unreasonable that it “falls outside the range of what could legitimately be regarded as reasonable”.
  • There are three main limbs to the Wednesbury principle:
    • Irrationality: The decision must be so unreasonable that no reasonable person could have made it.
    • Illegality: The decision must have been made in a way that was not authorized by law.
    • Procedural impropriety: The decision must have been made in a way that was unfair or biased.
  • The Wednesbury principle is not a guarantee that the courts will always intervene in a case. The courts will only intervene if they are satisfied that the public authority's decision is Wednesbury unreasonable.
  • The Wednesbury principle is not a substitute for substantive review. Substantive review is the process by which the courts can review the merits of a public authority's decision. The Wednesbury principle is only concerned with whether the decision was made in a way that was lawful and reasonable.
  • Wednesbury Principle and its Inadequacy:
    • The 2022 Mandalia judgment surprisingly disregarded the Puttaswamy judgment and applied the Wednesbury principle, which demands a very low threshold for judicial review.
    • This minimal standard is insufficient to protect individual rights in the face of potentially intrusive income-tax searches.

Way Forward:

  • Reconciling executive power with individual privacy rights in the shadow of Puttaswamy necessitates a paradigm shift in the judicial approach to income tax searches. The current framework, characterized by deference and inadequate scrutiny, poses a significant threat to fundamental liberties.
  • Moving forward, a robust adherence to statutory requirements and a rigorous application of the proportionality principle are paramount. Only by demanding robust justification and meticulous judicial review can we prevent the unwarranted exercise of extra-constitutional power and safeguard the privacy rights of Indian citizens.

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