The income tax department on Tuesday conducted survey operations at the BBC's offices in Delhi and Mumbai as part of an investigation into alleged tax evasion, officials said.
The action, which led to a sharp political debate with the ruling Bharatiya Janata Party accusing the BBC of "venomous reporting" and the opposition slamming the move, comes weeks after the broadcaster aired a two-part documentary, India: The Modi Question.
The survey is being carried out to investigate issues related to international taxation and transfer pricing of BBC subsidiary companies, officials said. BBC had been served notices in the past but was "defiant and non-compliant" and had significantly diverted its profits, they alleged.
The department is looking at documents related to the business operations of the London-headquartered broadcaster and its Indian arms, they said.
The BBC said it is fully cooperating with tax authorities.
"The income tax authorities are currently at the offices in New Delhi and Mumbai and we are fully cooperating. We hope to have this situation resolved as soon as possible," the press office of the BBC said on Twitter.
The synchronised surprise action began at 11 am with income tax officials reaching the BBC offices in Delhi and in Mumbai. BBC staffers were asked to keep their phones at a particular spot inside the premises and cooperate, officials said.
According to I-T rules, transfer pricing "generally refers to prices of transactions between associated enterprises which may take place under conditions differing from those taking place between independent enterprises. It refers to the value attached to transfers of goods, services and technology between related entities".
It also refers to the value attached to transfers between un-related parties which are controlled by a common entity.
As news spread, curious onlookers and media crews were seen outside the BBC office at central Delhi's Kasturba Gandhi Marg. In Mumbai, the office is at the western suburb of Santa Cruz.
As part of a survey, the income tax department only covers the business premises of a company and does not raid residences and other locations of its promoters or directors.
The Supreme Court last week dismissed a plea seeking to impose a complete ban on the BBC in India in the wake of the controversial documentary, terming the petition "entirely misconceived" and "absolutely meritless".
On January 21, the government issued directions to block multiple YouTube videos and Twitter posts sharing links to the documentary.
The Editors Guild of India said it was "deeply concerned" about the income tax surveys and termed it continuation of a trend of using government agencies to intimidate and harass media outlets critical of the ruling establishment.
In a statement, the Guild said great care and sensitivity should be shown in all such investigations so as to not undermine the rights of journalists and media organisations.
The BJP, in its reaction, accused the BBC of unleashing "venomous" reporting against India, and alleged that its propaganda and the Congress' agenda go together.
BJP's national spokesperson Gaurav Bhatia rejected the Congress's criticism of the I-T action and said the government agency should be allowed to do its job.
He termed the BJP the "most corrupt" organisation in the world and said the Congress should remember that then prime minister Indira Gandhi had also banned the broadcaster.
Congress general secretary Jairam Ramesh used a Hindi idiom to attack the government, saying "Vinash Kaale, Vipreet Buddhi" (when doom approaches, a person's intellect works against his interest).
"Here we are demanding JPC on the Adani issue but the government is after the BBC. Vinash Kaale Viprit Buddhi," Ramesh said.
"Since agencies doing these Valentine Day 'Surveys' how about @IncomeTaxIndia, @SEBI_India & @dir_ed conduct one on govt's most valued sweetheart Mr. A?" was Trinamool Congress MP Mahua Moitra's response to the I-T move.
The CPI-M hit out at the Centre over IT "raids" and questioned if India remains the "mother of democracy".
"First ban BBC documentaries. No JPC/enquiry into Adani exposures. Now IT raids on BBC offices! India: 'Mother of democracy'?" party general secretary Sitaram Yechury said in a tweet.
CPI MP Binoy Viswam described the I-T action as an attempt of a "frightened government" to "strangle" the voice of truth.
"Raid on BBC! They call it survey! This survey is killing spree of a frightened govt. to strangle the voice of truth. World is witnessing it. When Modi preside over G-20, they will ask about India's record on freedom of press. Can he reply truth fully?" Viswam said in a tweet.