Home / Income Tax Act 2025 / Section 489

Section 489 Income Tax Act 2025: Presumption About Seized Assets, Books and Digital Evidence

Can the Income Tax Department rely on books, jewellery, virtual digital assets or electronic records found during a tax search as evidence in a criminal prosecution? Section 489 explains when the statutory presumptions in Section 247(7) may apply to evidence recovered during a search or delivered under a requisition.

Current law (effective 1 April 2026): Section 489 is an evidentiary provision in Chapter XXII of the Income-tax Act, 2025. It does not create a separate offence or prescribe imprisonment or a fine. Its two subsections apply the presumptions in Section 247(7) to specified prosecution evidence.

What does Section 489 provide?

Section 489, titled Presumption as to assets, books of account, etc., in certain cases, concerns the evidentiary use of items and information connected with an income-tax search or requisition. Where the statutory conditions are met and the prosecution tenders those materials in evidence in proceedings for an offence under the Act, Section 247(7) applies, so far as may be. The provision extends to assets, paper records and specified digital material.

It is important to distinguish a presumption about evidence from a finding of guilt. Section 489 does not by itself establish wilful tax evasion, a false statement or another offence. The prosecution must still establish the ingredients of the offence charged, subject to the applicable evidentiary rules.

When do subsections (1) and (2) apply?

Section 489(1): Items found during a search under Section 247

Subsection (1) covers money, bullion, jewellery, virtual digital assets, other valuable articles or things, books of account, documents, electronic information, information on a computer system and a computer system containing that information found in a person's possession or control during a search under Section 247. If the prosecution tenders the material in evidence against that person, or against that person together with a person referred to in Section 484, the presumptions in Section 247(7) may apply to the material.

Section 489(2): Items obtained through requisition under Section 248

Subsection (2) addresses materials taken into custody by an officer or authority mentioned in Section 248(1)(a), (b) or (c) and subsequently delivered to the requisitioning officer under Section 248(2). When the prosecution tenders the material in evidence against the person from whose possession or control it was taken, or against that person and a person referred to in Section 484, Section 247(7) applies so far as may be.

Key distinction: Section 489(1) relates to a direct income-tax search. Section 489(2) relates to a requisition of material previously taken into custody by another competent officer or authority.

What presumptions are imported from Section 247(7)?

Section 247(7) uses the words "may be presumed". Its five categories, where relevant to the evidence, are:

  1. Ownership or belonging: Books, documents, assets, electronic information or a computer system may be presumed to belong to the person found in possession or control.
  2. Truth of contents: The contents of books, documents or electronic information or computer systems may be presumed true.
  3. Handwriting and signatures: Signatures or handwriting appearing to be those of a particular person may be presumed to be that person's.
  4. Execution and attestation: A document appearing to have been stamped, executed or attested may be presumed to have been duly stamped, executed or attested by the purported person.
  5. Electronic exchanges: Information purporting to have been exchanged electronically between parties may be presumed to have been exchanged between those parties.

These are statutory evidentiary presumptions, not an automatic conclusion that every document is authentic, every transaction is taxable or every accused person is guilty. Their application depends on the statutory facts and the court's assessment of the evidence.

Relevant statutory expressions

Search under Section 247: A statutory search-and-seizure process conducted by an authorised officer in the circumstances specified in that section.
Requisition under Section 248: A statutory process by which specified books, documents, assets or information already in the custody of another officer or authority may be required and delivered to the requisitioning officer.
Electronic form and computer system: Section 489 expressly cross-refers to the definitions in Sections 261(g) and 261(e), respectively. These references matter for digital evidence and computer-held records.
Virtual digital asset: A category of digital asset expressly included among the items covered by Section 489(1); its statutory meaning must be read with the applicable definition provisions of the Act.
Person referred to in Section 484: A person implicated in abetment of a false return or specified tax-evasion conduct. Section 489 expressly contemplates prosecution evidence against the possessor and such a person together.

Practical examples

Example 1: Ledger found during a search

A computer system found during a search contains records of payments and email exchanges. Where the prosecution tenders the electronic information in evidence, the presumptions relating to contents and purported exchanges may become relevant. Preservation, attribution and reliability of the digital evidence remain important matters for examination.

Example 3: Documents requisitioned from another authority

No. Section 489 is an evidentiary provision. Possession alone does not establish a criminal offence under this section.

Does Section 489 apply to electronic records and computer systems?

Yes, where the conditions of Section 489(2), read with Section 248, are met.

Does Section 489 prescribe imprisonment or a fine?

No. The incorporated provision uses the expression "may be presumed". The court must apply the governing law to the facts and evidence.

Official statutory sources

Income-tax Act, 2025, as amended by the Finance Act, 2026 - Income Tax Department (PDF)

Read Section 489 together with Sections 247(7), 248, 261, 484 and, where relevant, 524. This article is general legal information, not advice on a particular prosecution.

Last reviewed: 12 November 2026.