Reuters: NEW DELHI: Indian tax officials examined mobile phones and laptops used by some BBC editorial and administrative employees, two sources told Reuters, as an inspection at the British broadcaster's offices in New Delhi and Mumbai entered a third day on Thursday.

Tax officials remained at the BBC offices, some sleeping there, since the surprise inspection was launched on Tuesday, according to witnesses. Others said some employees were questioned on financial transactions late into the night.

"They [officials] asked some of us to open their laptop and hand in phones and then handed it back," one source told Reuters, adding that owners of the devices were asked for the access codes. A second source gave a similar account.

The action by the tax department came just weeks after the government reacted angrily to a BBC documentary that had raised questions over the role played by Prime Minister Narendra Modi during the deadly communal riots in Gujarat in 2002, when the Hindu nationalist leader was chief minister of the western state.

The government dismissed the documentary, "India: The Modi Question", as propaganda and blocked its streaming and sharing on social media.

The BBC has stood by its reporting, which investigated one of the worst outbreaks of religious violence in India during the modern era. At least 1,000 people, mostly Muslims, were killed in the bloodletting, though activists put the toll at more than twice that number.

The BBC has said that it was "fully co-operating" with the tax authorities, and an internal memo from BBC World Service director Liliane Landor instructed staff to answer questions honestly and "not delete or conceal any information on any of your devices."

The tax department has not issued any statement or responded to requests for comment, though a government official denied that the tax survey was "vindictive", saying it was related to transfer pricing rules and alleged diversion of profits.

Kanchan Gupta, a senior adviser at the Ministry of Information & Broadcasting, told Times Now news channel on Wednesday that the BBC was served tax notices in the past but had not provided a "convincing response."

In recent years some international companies had come under the income tax scanner regarding transfer pricing rules, but several media organisations and rights' group criticised the ongoing search at the BBC.

"We demand that this intimidation be stopped and journalists are left to do their jobs without fear or favour," the Mumbai Press Club said in a statement.