Income-tax Act,1961
Act No : 43
Section :
Search and seizure8
7[132. Search and seizure8 9(1) Where the 10[Director General or Director] or the 11[Chief Commissioner or Commissioner] 12[or any such] 13[Deputy Director] or 14 [Deputy] Commissioner as may be empowered in this behalf by the Board], in consequence of information in his possession, has reason to believe that- (a) any person to whom a summons under sub-section (1) of section 37 ----------------------------------------------------------------------- 1 Inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-10- 1975. 2 Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 3 Inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-10- 1975. 4 Substituted for "Assistant Director of Inspection" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 5 Substituted for "Commissioner", ibid. 6 Substituted for "Chief Commissioner or Commissioner therefore" by the Finance Act, 1988, w.e.f. 1-6-1988. 7 Substituted by the Income-tax (Amendment) Act, 1965, w.e.f. 12-3- 1965. The Amendment Act provided for a validating provision for pre- 1965 searches as under: "6. Validation of certain searches made.-Any search of a building or place by an Inspecting Assistant Commissioner or Income- tax Officer purported to have been made in pursuance of sub-section (1) of section 132 of the principal Act, (i.e., the Income-tax Act, 1961), before the commencement of this Act, shall be deemed to have been made in accordance with the provisions of that sub-section as amended by this Act as if those provisions were in force on the day the search was made and shall not be called in question before any court of law or any other authority merely on the ground- (i) that the Inspecting Assistant Commissioner or the Income-tax Officer made such search with the assistance of any other person; or (ii) that no proceeding under the Indian Income-tax Act, 1922 (11 of 1922), or the principal Act, (i.e., the Income- tax Act, 1961), was pending against the person concerned when the search was authorised under the said sub-section." Earlier, section 132 was substituted by the Finance Act, 1964, w.e.f. 1-4-1964. 10 Substituted for "Director of Inspection" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 11 Substituted for "Commissioner", ibid. 12 Inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-10- 1975. 13 Substituted for "Deputy Director of Inspection" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 14 Substituted for "Inspecting Assistant", ibid. ----------------------------------------------------------------------- 1.499 of the Indian Income-tax Act, 1922 (11 of 1922) or under subsection (1) of section 131 of this Act, or a notice under sub-section (4) of section 22 of the Indian Income-tax Act, 1922 (11 of 1922), or under sub-section (1) of section 142 of this Act 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, or (b) 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, any books of account or other documents which will be useful for, or relevant to, any proceeding under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act, or (c) any person is in possession of any money, bullion, jewellery or other valuable article or thing and such money, bullion, jewellery or other valuable article or thing represents either wholly or partly income or property 1[which has not been, or would not be disclosed] for the purposes of the Indian Income-tax Act, 1922 (11 of 1922) or this Act (hereinafter in this section referred to as the undisclosed income or property), 2[then,- (A) the 3[Director General or Director] or the 4[Chief Commissioner or Commissioner], as the case may be, may authorise any 5[Deputy Director], 6[Deputy] Commissioner, 7[Assistant Director], 8[Assistant Commissioner or Income-tax Officer], or (B) such 9[Deputy Director] or 10[Deputy] Commissioner, as the case may be, may authorise any 11[Assistant Director], 12 [Assistant Commissioner or Income-tax Officer], (the officer so authorised in all cases being hereinafter referred to as the authorised officer) to-] ----------------------------------------------------------------------- 1 Substituted for "which has not been disclosed" by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-10-1975. 2 Substituted for "he may authorise any Deputy Director of Inspection, Inspecting Assistant Commissioner, Assistant Director of Inspection or Income-tax Officer (hereinafter referred to as the authorised officer) to-" by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-10-1975. 3 Substituted for "Director of Inspection" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 4 Substituted for "Commissioner", ibid. 5 Substituted for "Deputy Director of inspection", ibid. 6 Substituted for "Inspecting Assistant", ibid. 7 Substituted for "Assistant Director of Inspection", ibid. 8 Substituted for "or Income-tax Officer" by the Direct Tax Laws (Amendment) Act, 1987 (as amended by the Finance Act, 1988), w.e.f. 1- 4-1988. 9 Substituted for "Deputy Director of Inspection", ibid. 10 Substituted for "Inspecting Assistant", ibid. 11 Substituted for "Assistant Director of Inspection" by the Direct Tax Laws (Amendment) Act, 1987 (as amended by the Finance Act, 1988), w.e.f. 1-4-1988. 12 Substituted for "or Income-tax Officer" by the Direct Tax Laws (Amendment) Act, 1987 (as amended by the Finance Act, 1988), w.e.f. 1- 4-1988. ----------------------------------------------------------------------- 1.500 (i) enter and search any 1 [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 look of any door, box, locker, safe, almirah or other receptacle for exercising the powers conferred by clause (i) where the keys thereof are not available; 2[(iia) search any person who has got out of, or is about to get into, or is in the building, place, vessel, vehicle or aircraft, if the authorised officer has reason to suspect that a such person has secreted about his person any such books of account, other documents, money bullion, jewellery or other valuable article or thing;] (iii) seize any such books of account, other documents, money, bullion, jewellery or other valuable article or thing found as a result of such search; (iv) place marks of identification on any books of account or other documents or make or cause to be made extracts or copies therefrom; (v) make a note or an inventory of any such money, bullion, jewellery or other valuable article or thing: 3[Provided that where any building, place, vessel, vehicle or aircraft referred to in clause (i) is within the are of jurisdiction of any 4[Chief Commissioner or Commissioner], but such 5[Chief Commissioner or Commissioner] has no jurisdiction over the person referred to in clause (a) or clause (b) or clause (c), then notwithstanding anything contained in section 6[120], it shall be competent for him to exercise the powers under this sub-section in all cases where he has reason to believe that any delay in getting the authorisation for the 7[Chief Commissioner or Commissioner] having jurisdiction over such person may be prejudicial to the interest of the revenue:] 8[Provided further that where it is not possible or practicable to take physical possession of any valuable article or thing and remove it to a safe place due to its volume, weight or other physical characteristics or due to its being of a dangerous nature, the authorised officer may serve an order on the owner or the person who is in immediate possession or control on the owner or the person who is in immediate possession or control thereof that he shall not remove part with or otherwise deal with it, except with the previous permission of such authorised officer and such ----------------------------------------------------------------------- 1 Substituted for "building or place" by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-10-1975. 4 Substituted for "Commissioner" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 5. Ibid. 6 Substituted for "121" by the Direct Tax Laws ( Amendment) Act 1987 (as amended by the Finance Act, 1988) w.e.f. 1-4-1988. 7 Substituted for "Commissioner" by the Direct Tax Laws (Amendment) Act 1987 w.e.f. 1-4-1988. 8 Inserted by the Finance Act, 1988, w.e.f. 1-4-1989. ------------------------------------------------------------------------ 1.501 action of the authorised officer shall be deemed to be seizure of such valuable article or thing under clause (iii)] 1[(1A) Where any 2[Chief Commissioner or Commissioner], in consequence of information in his possession, has reason to suspect that any books of account, other documents, money, bullion, jewellery or other valuable article or thing in respect of which an officer has been authorised by the 3[Director General or Director] or any other 4[ Chief Commissioner or Commissioner] or any such 5[Deputy Director or 6[Deputy] Commissioner as may be empowered in this behalf by the Board to take action under clauses (i) to (v) of sub-section (1) are or is kept in any building, place, vessel, vehicle or aircraft not mentioned in the Commissioner] may, notwithstanding any thing contained in section 8[120], authorise the said officer to take action under any of the clauses aforesaid in respect of such building, place, vessel, vehicle or aircraft. ] (2) The authorised officer may requisition the services of any police officer or of any officer of the Central Government or of both, to assist him for all or any of the purposes specified in sub-section (1) 9[or sub-section (1A) and it shall be the duty of every such officer to comply with such requisition. (3) The authorised officer may, where it is not practicable to seize any such books of account other documents money bullion, jewellery or other valuable article or thing, 10[for reasons other than those mentioned in the second provision to sub-section (1), ] serve an order on the owner or the person who is in immediate possession or control thereof that he shall not remove, part with or otherwise deal with it except with the previous permission of such officer and such officer may take such steps as may be necessary for ensuring compliance with this sub-section. 11[Explanation.- For the removal of doubts, it is hereby declared that serving of an order as aforesaid under this sub-section shall not be deemed to be seizure of such books of account, other documents, money, bullion, jewellery or other documents, money, bullion, jewellery or other valuable article or thing under clause (iii) of sub-section (1).] (4) The authorised officer may, during the course of the search or seizure, examine on oath any person who is fond to be in possession or control of any books of account, documents, money, bullion, jewellery to ----------------------------------------------------------------------- 1 Inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-10- 1975. See rule 112(2)(c) and Form No. 45B. 2 Substituted for "Commissioner" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 3 Substituted for "Director of Inspection", ibid. 4 Substituted for "Commissioner", ibid. 5 Substituted for "Inspecting Assistant", ibid. 6 Substituted for "Inspecting Assistant", ibid. 7 Substituted for "Commissioner", ibid. 8 Substituted for "121" by the Direct Tax Laws (Amendment) Act, 1987 (as amended by the Finance Act, 1988, w.e.f. 1-4-1988. 9 Inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-10- 1975. 10 Inserted by the Finance Act, 1988, w.e.f. 1-4-1989. 11 Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4- 1989. ----------------------------------------------------------------------- 1.502 other valuable article or thing and any statement made by such person during such examination may thereafter be used in evidence in any proceeding under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act. 1[Explanation.-For the removal of doubts, it is hereby declared that the examination of any person under this sub-section may be not merely in respect of any books of account, other documents or assets found as a result of the search, but also in respect of all matters relevant for the purposes of any investigation connected with any proceeding under the Indian Income-tax Act, 1922 (11 of 1922), or under this Act.] 2[(4A) Where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession or control of any person in the course of a search, it may be presumed- (i) that such books of account, other documents, money, bullion, jewellery or other valuable article or thing belong or belongs to such person; (ii) that the contents of such books of account and other documents are true; and (iii) that the signature and every other part of such books of account and other documents which purport to be in the handwriting of any particular person or which may reasonably be assumed to have been signed by, or to be in the handwriting of, any particular person, are in that person's handwriting, and in the case of a document stamped, executed or attested, that it was duly stamped and executed or attested by the person by whom it purports to have been so executed or attested.] (5) 3[Where any money, bullion, jewellery or other valuable article or thing (hereafter in this section and in sections 132A and 132B referred to as the assets) is seized under sub-section (1) or sub-section (1A) ,4 [as a result of a search initiated or requisition "made before the 1st day of July, 1995] the 7[Assessing] Officer, after affording a reasonable opportunity to the person concerned of being heard and making such enquiry as may be prescribed,6 shall within 7 Lone hundred and twenty] days of the seizure, make an order, with the previous approval of the 8[Deputy] Commissioner,-] (i) estimating the undisclosed income (including the income from the undisclosed property) in a summary manner to the best of his judgment on the basis of such materials as are available with him; ----------------------------------------------------------------------- 1 Inserted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. 2 Inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-10- 1975. See rule 112(2)(c) and Form No. 45B. 3 Substituted, ibid. 4 Inserted by the Finance Act, 1995, w.e.f. 1-7-1995. 5 Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 7 Substituted for "ninety" by the Taxation Laws (Amendment) Act, 1984, w.e.f. 1-10-1984. 8 Substituted for "Inspecting Assistant" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. ----------------------------------------------------------------------- 1.503 (ii) calculating the amount of tax on the income so estimated in accordance with the provisions of the Indian Income-tax Act, 1922 (11 of 1922), or this Act; 1[(iia) determining the amount of interest payable and the amount of penalty impossible in accordance with the provisions of the Indian Income-tax Act, 1922 (11 of 1922), or this Act, as if the order had been the order of regular assessment;] (iii) specifying the amount that will be required to satisfy any existing liability under this Act and any one or more of the Acts specified in clause (a) of sub-section (1) of section 230A in respect of which such person is in default or is deemed to be in default, and retain in his custody such assets or part thereof as are in his opinion sufficient to satisfy the aggregate of the amounts referred to in clauses (ii), 2[ (iia)] and (iii) and forthwith release the remaining portion, if any, of the assets to the person from whose custody they were seized: Provided that if, after taking into account the materials available with him, the 3[Assessing] Officer is of the view that it is not possible to ascertain to which particular previous year or years such income or any part thereof relates, he may calculate the tax on such income or part, as the case may be, as if such income or part were the total income chargeable to tax at the rates in force in the financial year in which the assets were seized 4 [and may also determine the interest or penalty, if any, payable or impassable accordingly]: Provided further that where a person has paid or made satisfactory arrangements for payment of all the amounts referred to in clauses (ii), 5[(iia)] and (iii) or any part thereof, the 6[Assessing] Officer may, with the previous approval of the 7[Chief Commissioner or Commissioner], release the assets or such part thereof as he may deem fit in the circumstances of the case. (6) The assets retained under sub-section (5) may be dealt with in accordance with the provisions of 8[section 132B]. (7) If the 9[Assessing] Officer is satisfied that the seized assets or any part thereof were held by such person, for or on behalf of any other person, the 10[Assessing) Officer may proceed under sub- section (5) against such other person and all the provisions of this section shall apply accordingly. ---------------------------------------------------------------------- 1 Inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-10- 1975. 2 Ibid. 3 Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 4 Inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-10- 1975. 5 Ibid. 6 Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 7 Substituted for "Commissioner", ibid. 8 Substituted for "section 132A" by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-10-1975. 9 Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 10 ibid. ----------------------------------------------------------------------- 1.504 (8) The books of account or other documents seized under sub- section (1A) shall not be retained by the authorised officer seizure unless the reasons for retaining the same are recorded by him in writing and the approval of the 2[Chief Commissioner or Commissioner] for such retention is obtained. Provided that the 3[ Chief Commissioner or Commissioner ] shall not authorise the retention of the books of account and other documents for a period exceeding their days after all the proceedings under the India Income-Tax Act 1922 (11 of 1922) or this Act in respect of the years for which the books of account or other documents are relevant are completed. 4[(8A) An order under sub-section (3) shall not be in force for a period exceeding sixty days from the date of the order, except where the authorised officer, for reasons to the recorded by him in writing, extends the period of operation of the order beyond sixty days, after obtaining the approval of the 5[Director or, as the case may be, Commissioner] or such extension: Provided that the 6[Director or, as the case may be, Commissioner shall not approve the extension of the period for any period beyond the expiry of thirty days after the completion of all the proceedings under this Act in respect of the years for which the books of account, other documents, money , bullion, jewellery or other valuable articles or things are relevant.] (9) The person from whose custody any books of account or other documents are seized under sub-section (1) 7[or sub-section (IA)] may make copies thereof, or take extracts there form, in the presence of the authorised officer or any other person empowered by him in this behalf, at such place and time as the authorised officer may appoint in this behalf. 8[(9A) Where the authorised officer has no jurisdiction over the person referred to in clause (a) or clause (b) or clause (c) of sub- section (1), the books of account or other documents or assets seized under that sub-section shall be handed over by the authorised officer to the 9[Assessing ] Officer having jurisdiction over such person , within a period of fifteen days of such seizure and thereupon the powers exercisable by the authorised officer under sub-section (8) or sub-section (9) shall be exercisable by such 10[Assessing] Officer.] (10) If a person legally entitled to the books of account or other ---------------------------------------------------------------------- 1 Inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-10- 1975. 2 Substitute for "Commissioner" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 3 Ibid. 4 Inserted by the Direct Tax Laws (Amendment) Act, 1987,w.e.f. 1-4- 1989. 5 Substituted for "Commissioner" by the Finance (No. 2) Act, 1991, w.e.f. 1-10-1991. 6 Ibid. 7 Inserted by the Taxation Laws (Amendment) Act, 1975 , w.e.f. 1-10-1975. 8 Ibid. 9 Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 10 Ibid. ------------------------------------------------------------------------- 1.505 documents seized under sub-section (1) 1[or sub-section (IA)] objects for any reason to the approval given by the 2[Chief Commissioner or Commissioner] under sub-section (8), he may make an application to the Board stating therein the reasons for such objection and requesting for the return of the books of account or other documents. (11) If any person objects for any reason to an order made under sub-section (5), he may, within thirty days of the date of such order, make an application to 3[the 4[Chief Commissioner or Commissioner]], stating therein the reasons for such objection and requesting for appropriate relief in the matter. 5[(11A) Every application referred to in sub-section (11) which is pending immediately, before the 1st day of October, 1984, before an authority notified under that sub-section as it stood immediately before that day shall stand transferred on that day to the 6[Chief Commissioner or Commissioner] may proceed with such application from the stage at which it was on that day: (12) On receipt of the application under sub-section (10) the Board, or on receipt of the application under sub-section (11) 8[the 9[Chief Commissioner or Commissioner]], may after giving the applicant an opportunity of being heard, pass such orders as it 10[or he] thinks fit. 11[(13) The Provisions of the Code of Criminal Procedure, 1973 (2 of 1974), relating to searches and seizure shall apply, so for as may be, to searches and seizure under sub-section (1) or sub-section (1A).] 12(14) The Board may make rules in relation to any search or seizure under this section; in particular, and without prejudice to the generality of the foregoing power, such rules may provide for the procedure to be followed by the authorised officer- (i) for obtaining ingress into 13[any building, place, vessel, vehicle ----------------------------------------------------------------------- 1 Inserted by the Taxation Laws (Amendment), Act, 1975, w.e.f. 1-10-1975. 2 Substituted for " Commissioner " by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 3 Substituted for "such authority, as may be notified in this behalf by the Central Government in the Official Gazette hereafter in this section referred to as the notified authority" by the Taxation Laws (Amendment), Act, 1984, w.e.f. 1-10-1984. 4 Substituted for "Chief Commissioner or Commissioner" by the Direct Tax :was (Amendment), Act,1987, w.e.f. 1-4-1988. 5 Inserted by the Taxation Laws (Amendment) Act, 1984, w.e.f. 1-10- 1984. 6 Substituted for "Commissioner" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 7 Ibid. 8 Substituted for " the notified authority" by the Taxation Laws (Amendment) Act, 1984, w.e.f. 1-4-1984. 9 Substituted for "Commissioner" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1988. 10 Inserted by the Taxation Laws (Amendment) Act, 1984, w.e.f. 1-10- 1984. 11 Substituted by the Taxation Laws (Amendment) Act, 1975, w.e.f.1- 10-1975. 13 Substituted for "such building or place" by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-10-1975. ----------------------------------------------------------------------- 1.506 or aircraft] to be searched where free ingress thereto is not available; (ii) for ensuring safe custody of any books of account or other documents or assets seized. Explanation 1.-In computing 1[the period referred to in sub- section (5) for the purposes of that sub-section], any period during which any proceeding under this section is stayed by an order or injunction of any court shall be excluded. Explanation 2.-In this section, the word "proceeding" means any proceeding in respect of any year, whether under the Indian Income-tax Act, 1922 (11 of 1922), or this Act, which may be pending on the date on which a search is authorised under this section or which may have been completed on or before such date and includes also all proceedings under this Act which may be commenced after such date in respect of any year 2[132A. Powers to requisition books of account, etc.3 (1) Where the 4[Director- General or Director] or the 5[Chief Commissioner or Commissioner], in consequence of information in his possession, has reason to believe that- (a) any person to whom a summons under sub-section (1) of section 37 of the Indian Income-tax Act, 1922 (11 of 1922), or under subsection (1) of section 131 of this Act, or a notice under sub-section (4)of section 22 of the Indian Income-tax Act, 1922, or under subsection (1) of section 142 of this Act 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 (b) any books of account or other documents will be useful for, or relevant to, any proceeding under the Indian Income- tax Act, 1922 (11 of 1922), or under this Act and any person to whom a ---------------------------------------------------------------------- Substituted for "the period of one hundred and twenty days for the purposes of subsection (5)" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. Earlier, the italicised words were substituted for "ninety" by the Taxation Laws (Amendment) Act, 1984, w.e.f. 1-10-1984. 2 Inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-10- 1975. 4 Substituted for "Director of Inspection" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 5 Substituted for "Commissioner", ibid. ----------------------------------------------------------------------- 1.507 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 (c) 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 Indian Income-tax Act, 1922 (11 of 1922), or this 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, then, the 1[Director General or Director] or the 2 [Chief Commissioner or Commissioner] may authorise any 3[Deputy Director], 4[Deputy Commissioner, 5[Assistant Director], 6 [Assistant Commissioner or Income-tax Officer] (hereafter in this section and in sub-section (2) of section 278D referred to as the requisitioning officer) to require the officer or authority referred to in clause (a) or clause (b) or clause (c), as the case may be, to deliver such books of account, other documents or assets to the requisitioning officer. (2) On a requisition being made under sub-section (1), the officer or authority referred to in clause (a) or clause (b) or clause (c), as the case may be, of that sub-section shall deliver the books of account, other documents or assets to the requisitioning officer either forthwith or when such officer or authority is of the opinion that it is no longer necessary to retain the same in his or its custody. (3) Where any books of account, other documents or assets have been delivered to the requisitioning officer, the provisions of sub- sections (4A) to (14) (both inclusive) of section 132 and section 132B shall, so far as may be, apply as if such books of account, other documents or assets had been seized under sub-section (1) of section 132 by the requisitioning officer from the custody of the person referred to in clause (a) or clause (b) or clause (c), as the case may be, of sub-section (1) of this section and as if for the words "the authorised officer" occurring in any of the aforesaid sub-sections (4A) to (14), the words "the requisitioning officer" were substituted.] 7[8[132B]. Application of retained assets (1) The assets retained under sub-section (5) of section 132 may be dealt with in the following manner, namely:- ---------------------------------------------------------------------- 1 Substituted for "Director of Inspection" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988 2 Substituted for "Commissioner", ibid. 3 Substituted for "Deputy Director of Inspection", ibid. 4 Substituted for "Inspecting Assistant", ibid. 5 Substituted for "Assistant Director of Inspection" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 6 Substituted for "or Income-tax Officer" by the Direct Tax Laws (Amendment) Act, 1987, (as amended by the Finance Act, 1988) w.e.f. 1- 4-1988. 7 Inserted as section 132A by the Income-tax (Amendment) Act, 1965, w.e.f. 12-3-1965. 8 Renumbered for "132A" by the Taxation Laws (Amendment) Act, 1975 w.e.f. 1-10-1975. ------------------------------------------------------------------------ 1.508 (i) The amount of the existing liability referred to in clause (iii) of the said sub-section and the amount of the liability determined on completion of the regular assessment or reassessment for all the assessment years relevant to the previous years to which the income referred to in clause (i) of that sub-section relates 1[ (including any penalty levied or interest payable in connection with such assessment or reassessment)] and in respect of which he is in default or is deemed to be in default may be recovered out of such assets. (ii) If the assets consist solely of money, or partly of money and partly of other assets, the 2[Assessing] Officer may apply such money in the discharge of the liabilities referred to in clause (i) and the assessee shall be discharged of such liability to the extent of the money so applied. (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 3[the Assessing Officer or, as the case may be, Tax Recovery Officer] under authorisation from the 4[Chief Commissioner or Commissioner] under sub-section (5) of section 226 and 3[the Assessing Officer or, as the case may be, 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. (2) Nothing contained in sub-section (1) shall preclude the recovery of the amount of liabilities aforesaid by any other mode laid down in this Act. 6(3) Any assets or proceeds thereof which remain after the liabilities 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. 7(4) (a) The Central Government shall pay simple interest at the rate of 8[fifteen] per cent per annum on the amount by which the aggregate of money retained under section 132 and of the proceeds, if any, of the assets. ----------------------------------------------------------------------- 1 Inserted by the Taxation Laws (Amendment) Act, 1975, w.e.f 1-10- 1975. 2 Substituted for "Income-tax" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f 1-4-1988. 3 Substituted for "the Income-tax Officer" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. 4 Substituted for "Commissioner", ibid, w.e.f 1-4-1988. 5 Substituted for "the Income-tax Officer", ibid, w.e.f. 1-4-1989. 8 Substituted for "twelve" by the Taxation Laws (Amendment) Act, 1984, w.e.f. 1-10-1984. Section 84 of the Amendment act has clarified that the increase in the rate of interest will apply in respect of any period falling after 30-9-1984, also in those cases where the interest became chargeable or payable from an earlier date. Earlier, "twelve" was substituted for "nine" by the Finance Act, 1972, w.e.f. 1-4-1972 which was substituted for "six" by the Taxation Laws (Amendment) Act, 1967, w.e.f. 1-10-1967. ----------------------------------------------------------------------- 1.509 sold towards the discharge of the existing liability referred to in clause (iii) of sub-section (5) of that section exceeds the aggregate of the amounts required to meet the liabilities referred to in clause (i) of sub-section (1) of this section. (b) Such interest shall run from the date immediately following the expiry of the period of six months from the date of the order under sub-section (5) of section 132 to the date of the regular assessment or reassessment referred to in clause (i) of sub-section (1) or, as the case may be, to the date of last of such assessments or reassessments.]
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