What are the grounds for initiating a search and seizure operation?

As per Section 132(1) of the Income Tax Act, the income tax authorities can initiate a search and seizure if they have “reason to believe” that a person has undisclosed income or assets which are intended to be concealed. The “reason to believe” must be based on credible information or material evidence. Supporting Case Law: Khemchandji Krishnalalji Bhanushali v. ACIT [2019] 110 taxmann.com 349 (Guj) – The Gujarat High Court upheld that credible information or material evidence is necessary to initiate search proceedings.