Under Section 132 of the Income-tax Act, the power to carry out search and seizure action is conferred upon the Director General, Director, Chief Commissioner, Commissioner, Joint Director, or Joint Commissioner. Such action can be taken if the authorities are in possession of information and have reason to believe the following:

1.  a person, to whom summons have been issued to produce or cause to be produced any books of account or other documents, has omitted or failed to produce, or cause to be produced, such books of account or documents as specified in the summons;
2. any person, to whom summons or notices have been issued, will not or would not produce or cause to be produced, books of account or other documents called for;
3. any person is in possession of money, bullion, jewellery or other valuable article or thing and, such money, bullion, jewellery or other valuable article or thing, which represents either wholly or partly, income or property which has not been, or would not be disclosed for the purpose of the Income-tax Act, then, such Officer, as mentioned above, hereinafter referred to as the Authorised Officer may do the following:
   

- enter and search any building, place, vessel, vehicle or aircraft where he has reason to suspect that such books of account or documents, money, bullion, jewellery or other valuable articles or things are kept;

- break open the lock of any door, box, locker, safe, almirah or other receptacle for exercising the powers, conferred upon him where the keys, thereof, are not available;

- search any person who has got out, or is about to get into, or is in, the building, place, vessel, vehicle or aircraft (if the Authorised Officer has reason to suspect that such person has secreted upon his body any of the aforesaid articles);

- require any person who is found to be in possession or control of any books of account or other documents maintained in the form of electronic record as defined under the Information Technology Act, 2000 (21 of 2000), to afford the authorised officer the necessary facility to inspect such books of account or other documents

- seize such books of account or other documents, money, bullion, jewellery or other valuable article or thing, found as a result of search;

- place marks of identification on any books of account or other documents or make or cause to be make extracts or copies, therefrom;

- make a note of an inventory of any such money, bullion, jewellery or other value article,

Where the Authorised Officer finds it impracticable to take physical possession and seize any valuable article or thing on account of its volume, weight or physical characteristics or due to it being impracticable etc. the Authorised Officer can serve a prohibitory order upon the person, who is in immediate possession of the said article, prohibiting him from parting with the same. This amounts to a deemed seizure. The Authorised Officers are also empowered to requisition the services of any Police Officer or any other officer of the Central Government or both.

The Authorised Officers are also empowered, during the course of Search & Seizure, to examine on oath any person, who is found to be in possession or control of any books of account, documents, money, bullion, jewellery or other valuable article or thing. Any statement, made by such person during such examination, may thereafter be used in evidence in any proceedings under the Income-tax Act. It is also provided under the Income-Tax Act that the person in possession or control of the books of account or other document, of money, bullion, jewellery or other valuable article or thing, will be presumed to be the owner thereof, unless he can bring evidence on record to show otherwise.

It is interesting to note that with effect from 1.6.2003, the authorised officers are not empowered to seize any stock in trade of the assessee. However, it may be kept in mind that the onus to prove that the assets found constitutes stock in trade of the assessee's business is on the assessee.