The assets seized under section 132 or requisitioned under section 132A may be dealt with in the following manner, namely:—
(i) 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 132A may also be adjusted against the amount of liability arising on an application made before the Settlement Commission under section 245C(1).
(ii) 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 siezed, 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.
(iii) 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 (i) (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 to Section 132B of the Act shall have a prospective application and so, appeals may not be filed by the Department on this issue for the cases prior to 01.06.2013 and those already filed may be withdrawn/ not pressed upon [Circular No. 20/2017 dated 12-6-2017].
(iv) 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 (i) 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.
(v) 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 1 /2% p.m. or part of the month on seized money [Section 132B(4)]:
Interest at the rate of 1/2 % for every month or part of a month shall be allowed on the aggregate amount of—
-
the money seized under section 132 or requisition under section 132A as reduced by the amount of money if any released under the above proviso and
-
the proceeds of assets sold towards the discharge of existing liability referred to section 132B(1)(i)
which exceeds the aggregate of the amount required to meet the liabilities (both existing and liability determined under section 153A, including penalty and interest) referred to in section 132B(1)(i).
In other words, the interest will be computed on the following amount—
Amount of money seized under section 132 or requisitioned under section 132A |
- |
Add: Proceeds of assets sold towards the discharge of existing liabilities referred to in section 132(1)(i) |
- |
Less: Money released under the first proviso to section 132B(1)(i) [see (ii) above of para 18.2(1)] |
- |
Less: Aggregate of the amount required to meet the liability (both existing and liability under section 153A including penalty and interest) referred to in section 132B(1)(i) |
- |
Amount on which interest payable |
- |
This interest shall be payable from the expiry of the period of 120 days from the execution of the last of the authorizations for search till the date of completion of assessment under section 153A or block assessment. |
