1. Authority who can issue Order for Search and Seizure U/s 132:
Search and seizure can be authorised by—
(a) the Principal Director General of Income Tax/Director General of Income Tax, or
(b) the Principal Director of Income Tax/Director of Income Tax, or
(c) the Principal Chief Commissioner of Income Tax/Chief Commissioner of Income Tax, or
(d) the Principal Commissioner of Income Tax/Commissioner of Income Tax, or
(e) the Additional Director or Additional Commissioner, or
(f) the Joint Director or Joint Commissioner of Income-tax.
The Principal Director General / Director General or Principal Director / Director or the Principal Chief Commissioner / Chief Commissioner or Principal Commissioner / Commissioner may authorise any officer subordinate to him but not below the rank of Income-tax Officer to conduct such Search.
Similarly, Additional Commissioner, Joint Commissioner or Additional Director / Joint Director can authorise any officer subordinate to him but not below the rank of Income-tax Officer to do so.
however, no authorization shall be issued by the Additional Director or Additional Commissioner or Joint Director or Joint Commissioner, unless he has been empowered by the Board to do so.
The Officer so authorised is referred as Authorised Officer. The authorisation is done by issuing a search warrant in Form 45.
Authorisation for search and seizure can take place if the above authority, in consequence of information in his possession, has reason to believe that:
(a) any person to whom:
(i) summons under section 131(1) or
(ii) notice under section 142(1), was issued to produce or cause to be produced any books of account, or other documents has willfully omitted or failed to produce or caused to produce such books of account or other documents as required by such summons or notice;
(b) any person to whom summons or notice, as aforesaid, has been or might be issued, will not or would not produce any books of account or other documents which will be useful or relevant to any proceeding undertaken under the Income-tax Act;
(c) any person is in possession of any money, bullion or jewellery, or other valuable article or things and these assets represent either wholly or partly the income or properly which has not been or would not be disclosed by the person concerned for the purposes of this Act.
Persons to be searched:
From the above it is clear that the persons to be searched are persons:
(a) who have books of account or documents which have not been produced or are not likely to be produced in response to notices or/summons, or
(b) persons who are likely to be in possession of undisclosed income or property.
3. Search can be Authorised by a Principal CCIT/CCIT or Principal CIT/CIT other than jurisdictional Principal CCIT/CCIT or Principal CIT/CIT:
(1) The Principal Chief Commissioner / Chief Commissioner or Principal Commissioner/ Commissioner of Income-tax has the power to authorise a search of any building, place, vessel, vehicle or aircraft of a person which is under his jurisdiction and also in cases where such building, place, vessel, vehicle or aircraft is in his area jurisdiction but he has no jurisdiction over the persons concerned, if he has reason to believe that any delay in obtaining authorisation from the Principal CCIT/CCIT or Principal Commissioner / Commissioner having jurisdiction over the person would be prejudicial to the interests of revenue. Such authorization shall be given in Form 45A. [First proviso to section 132(1)]
For example. if the search is to be conducted in the premises of a person in Chennai but such person is an assessee in Delhi i.e. the jurisdiction of the assessee is with Chief Commissioner of Delhi, then the Chief Commissioner/Commissioner of Income-tax Chennai can authorise such search instead of getting authorisation from jurisdictional Chief Commissioner i.e. Chief Commissioner Delhi.
(2) Where a search for any books of account or other documents or assets has been authorised by any authority who is competent to do so, and some other Chief Commissioner/Commissioner in consequence of information in his possession has reason to suspect that such books of account or other documents and asset, etc. of the assessee are kept in any building, place, vessel, vehicle or aircraft not specified in the search warrant issued by such authority, he may authorise the Authorised Officer to search such other building, place, vessel, vehicle or aircraft. [Section 132(1A)] Such authorization shall be given in Form 45B.
4. Power of Officer to whom Authority is given for Search and Seizure:
The Officer authorised i.e. the Authorised Officer for search and seizure, shall have the powers to:—
(i) enter and search any building, place, vessel, vehicle or aircraft where he has reason to suspect that such books of account, other documents, money, bullion, jewellery or other valuable article or thing are kept,
(ii) break open the lock of any door, box, locker, safe, almirah or other receptacle for exercising the powers conferred by clause (I) above where the keys thereof are not available;
(iii) search any person who (a) has got out of, or (b) is about to get into, or (c) is in the building. place, vessel, vehicle or aircraft, if the authorised officer has reason to suspect that such person has secreted about his person any such books of account, other documents, money, bullion, jewellery or other valuable article or thing:
(iv) 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 records, to afford the necessary facility to the authorised officer to inspect all such books of account or other documents;
(v) seize any such books of account, other documents, money, bullion, jewellery or other valuable article or thing found as a result of such search.
However, the authorised officer shall have no power to seize any bullion, jewellery or other valuable article or thing being stock-in-trade of the business found as a result of search. lie shall make a note or inventory of such stock-in-trade of the business.
(vi) place marks of identification on any books of account or other documents or make or cause to be made extracts or copies therefrom;
(vii) make a note or an inventory of any such money, bullion, jewellery or other valuable article or thing.
5. Power to Requisition Books of Account etc. [Section 132A]
(1) Requisitioning of books of account, etc. taken into custody under any other law:
Section 132A provides that in case where any books of account or other documents and assets have been taken into custody by the Officer or authority under any other law e.g., by the Collector of Customs, the Sales-tax Commissioner, etc., the Principal Director General / Director General or Principal Director! Director or the Principal Chief Commissioner / Chief Commissioner or Principal Commissioner / Commissioner of Income-tax has reason to believe, in such circumstances as are covered by section 132 for search and seizure, may authorise in Form No. 45C any Additional Director, Additional Commissioner, Joint Commissioner, Joint Director, Deputy Director, Deputy Commissioner, Assistant
Commissioner, Assistant Director or the Assessing Officer (Requisitioning Officer) to require such Officer or authority to deliver to him such books of account or other documents and assets.
(2) When can such power be invoked [Rule 112D]:
Powers under section 132A of Income-tax Act, 1961, to requisition books of account, etc. can be invoked by the Director General or Director or the Chief Commissioner or Commissioner, when he, in consequence of information in his possession, has reason to believe that—
(i) any person to whom summons under section 131(1) or a notice under section 142(1) was 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 other documents, as required by such summons or notice and the said books of account or other documents have been taken into custody by any officer or authority under any other law for the time being in force: or
(ii) any books of account or other documents will be useful for, or relevant to, any proceeding under the Act and any person to whom a summons or notice as aforesaid has been or might be issued will not, or would not, produce or cause to be produced, such books of account or other documents on the return of such books of account or other documents by any officer or authority by whom or which such books of account or other documents have been taken into custody under any other law for the time being in force: or
(iii) any assets represent either wholly or partly income or property which has not been, or would not have been disclosed for the purposes of the Act, by any person from whose possession or control such assets have been taken into custody by any officer or authority under any other law for the time being in force. [Section 132A(l)]
The authorised officer requisitioning the books of account shall make the order of requisition in writing. Such requisition shall be accompanied by a copy of authorisation in Form No. 45C.
6. Application of Seized or Requisitioned Assets [Section 132B]
The assets seized under section 132 or requisitioned under section 132A may be dealt with in the following manner, namely:—
(1) Seized assets may be applied towards existing and future liability [Section 132B(1)(i)]:
The amount of any existing liability under this Act, the Wealth-tax Act, 1957 the Expenditure-tax Act, 1987 the Gift-tax Act, 1958 and the Interest-tax Act, 1974, and
the amount of the liability determined on completion of the assessment under section 153A or under Chapter XIVB for the block period (including any penalty levied or interest payable in connection with such assessment) and in respect of which such person is in default or is deemed to be in default, or the amount of liability arising on an application made before the Settlement Commission under section 245C(1), may be recovered out of such assets.
The above amendment has been made to provide that the asset seized under section 132 or requisitioned under section l32A may also be adjusted against the amount of liability arising on an application made before the Settlement Commission under section 245C (1).
(2) Release of seized asset after meeting existing liabilities in certain cases [Proviso to section 132B(1)(i)]:
Where the person concerned makes an application to the Assessing Officer within 30 days from the end of the month in which asset was seized, for release of asset and the nature and source of acquisition of any such asset is explained to the satisfaction of the Assessing Officer, the amount of any existing liability referred to in this clause may be recovered out of such asset and the remaining portion, if any, of the asset may be released, with the prior approval of the Chief Commissioner or Commissioner, to the person from whose custody the assets were seized.
Further, such asset or any portion thereof as is referred to above shall be released within a period of 120 days from the date on which the last of the authorisations for search under section 132 or for requisition under section 132A, as the case may be, was executed.
(3) Money seized may be applied for discharging the liabilities [Section 132B(1)(ii)]:
If the assets consist solely of money, or partly of money and partly of other assets, the Assessing Officer may apply such money in the discharge of the liabilities referred to in clause (1) (existing and feature liability) and the assessee shall be discharged of such liability to the extent of the money so applied.
The "existing liability" does not include advance tax payable in accordance with the provisions of Part C of Chapter XVII [Explanation 2].
(4) Assets other than money may also be applied to discharge liabilities [Section 132B(1)(iii)]:
The assets other than money may also be applied for the discharge of any such liability referred to in clause (1) as remains undischarged and for this purpose such assets shall be deemed to be under distraint as if such distraint was effected by the Assessing Officer or, as the case may be, the Tax Recovery Officer under authorisation from the Chief Commissioner or Commissioner under sub-section (5) of section 226 and the Assessing Officer or, as the case may be, the Tax Recovery Officer may recover the amount of such liabilities by the sale of such assets and such sale shall be effected in the manner laid down in the Third Schedule.
(5) Return of Excess Assets Seized [Section 132B(3)]:
Any assets or proceeds thereof which remain after the liabilities (existing and future) referred to in clause (i) of sub-section (1) are discharged, shall be forthwith made over or paid to the persons from whose custody the assets were seized.
Interest to be paid at the rate of ½ % p.m. or part of the month on seized money [Section 132B(4)I:
Interest at the rate of ½ % for every month or part of a month shall be allowed on the aggregate amount of—
(a) the money seized under section 132 or requisition under section 132A as reduced by the amount of money if any released .
(b) the proceeds of assets sold towards the discharge of existing liability referred to section 132B(1)(i)
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