OVERVIEW OF SECTION 132: SEARCH AND SEIZURE UNDER INCOME TAX ACT
OVERVIEW OF SECTION 132: SEARCH AND SEIZURE UNDER INCOME TAX ACT
SEARCH & SEIZURE
WHO CAN AUTHORIZE SEARCH (ISSUE SEARCH WARRANT)
According to Section 132(1) of Income Tax Act, the
Principal Director General or Director General of income tax, or
Principal Director or Director of income tax, or
Principal Chief Commissioner or Chief Commissioner of income tax, or
Principal Commissioner or Commissioner of income tax.
May authorize:
Additional Director, or
Additional Commissioner, or
Joint Director, or
Joint Commissioner, or
Assistant Director, or
Deputy Director, or
Assistant Commissioner, or
Deputy Commissioner, or
Income tax officer.
To conduct an Income Tax Raid.
WHEN SEARCH CAN BE AUTHORIZED
If Income Tax authority has reason to believe that:
Any person to whom Notice u/s 142(1) or summon u/s 131 issued or might be issued to produce Books of Accounts or documents & Assessee failed to produce/ will not produce such Books of Accounts or documents.
Any person is in possession of any money, jewellery or any other valuable articles and such assets, which has not been disclosed/ would not be disclosed for the purpose of Income Tax Act.
Note: However, the reason to believe, as recorded by the Income Tax Authority, shall not be disclosed to any person or any authority or the Appellate Tribunal (ITAT).
POWER OF AUTHORIZED PERSON IN COURSE OF SEARCH
Enter & Search any building, place, vessel, vehicle or aircraft where the officer suspects that Books of Accounts, money are kept.
Power to break lock of any door, box, locker etc. if keys are not available.
Search any person who has got out of, or is about to get into, or is in, the building, vessel, place, vehicles etc.
Require any person who is in control of any Books of Accounts maintained in electronic form, to provide password.
Seize any books of accounts, documents, money, bullion, jewellery etc. found under search. However, stock cannot be seized.
Authorized officer may take help of any police officer or any officer of Central Government or any person or entity as may be approved by Principal Chief Commissioner of Income Tax, Chief Commissioner of Income Tax or Principal Director General of Income Tax or Director General of Income Tax in accordance with prescribed procedure.
Notes:
1. Deemed/ constructive seizure: where it is not possible/ practical to take physical possession of any asset due to volume, weight, nature etc. then authorized officer may serve an order on the owner of the person who is in immediate possession thereof, that he shall not remove/ deal with/ part with such asset without the approval of Authorized officer.
2. Prohibitory order/ orderof restraint: where it is not practical to take physical possession of any Books of Accounts or other assets for reason other than mentioned in Note-1 above, then authorized officer may serve an order on the owner of the person who is in immediate possession that he shall not remove/ deal with/ part with such asset without approval of Authorized officer. This order is valid for maximum 60 days.
3. Presumption (Assumption) under Search: Where any Books of Accounts other documents, money, bullion, jewellery etc. found in possession of any person, it may be presumed: -
That such Books of Accounts, documents, money, bullion, other valuable articles belong to such person.
That the contents of such Books of Accounts & documents are true.
That the signature & every other part of such Books of Accounts & other documents which purport (seems) to be in the handwriting of any particular person are in that person’s handwriting.
That the document which purports to be attested or stamped by particular person are presumed to be attested or stamped by such person.
4. Section 132A: Reacquisition: Where a search has already been conducted by any Authority under any other law e.g. GST, CBI, Election commission etc. or search was conducted by Income Tax Authority but Books of Accounts or assets with any other authority then the authorized officer shall require such other authority (FEMA/CBI) to deliver such books of accounts, assets seized, as early as possible.
5. Section 132(9A): Where the authorized officer has no jurisdiction over the person searched by him, the books of accounts or any money, bullion, jewellery etc. shall be handed over by authorized officer to the Assessing Officer having jurisdiction over such other person within period of 60 days from the date on which search was completed.
6. Section 132(9B) Provisional Attachment: During the course of search/ within 60 days from the date of conclusion of search, the search party, may, provisionally attach any property belonging to assessee. However, before doing so,
Reason shall be recorded in writing.
Interest of revenue shall be involved.
Provisional attachment so made shall be operational for 6 months, after which it shall be automatically vacated (Section 132(9C)).
7. Section 132(9D) Valuation Officer: During the course of search/ within 60 days of conclusion of search the authorized officer, may make a reference to Valuation Officer or any other person/ entity/ registered valuer approved by Principal Chief Commissioner of Income Tax, Chief Commissioner of Income Tax or Principal Director General of Income Tax or Director General of Income Tax, Valuation officer or any other person/ entity/ registered valuer shall estimate the Fair Market Value (FMV) of the property. Report shall be submitted in 60 days of receipt of such reference.
8. Conclusion of Search or Requisition
Search- Date of Last Panchnama drawn.
Requisition- Date of actual receipts of Books of accounts or assets.
