SECTION 132��POWER OF INCOME TAX AUTHORITIES RELATING TO SEARCH AND SEIZURE
INTRODUCTION
The power of search and seizure is to unearth evidence which may not otherwise available to income tax authorities .
While this might seem like a drastic step, it is an act that is upheld by the constitution, and is deemed entirely necessary in cases where the Income Tax Department feels extreme action is needed.
ENTERING AND SEARCHING THE PREMISES
Where the Director General Or Director or Chief Commissioner has been empowered ,has ‘Reason To Believe‘or ‘reason to suspect’ that:
132(a)Any person to whom summons under sub section (1) of Section 131 ,Or Under Sub Section (1) Of Section 142of this act were issued to produce ,or cause to be produced any Books Of Accounts or other documents has ommited or failed to produce as required by summons or notices.
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132b) any person to whom summons has been issued will not ,produce or cause to be produced ,any books of accounts or other documents which will be useful for ,or relevant to any proceedings under the indian income tax act
132c) any person is in possession of any money ,bullion , jewellery or other valuable articles or things which represents either wholly or partly income which has not been disclosed for the purpose of income tax act.
which will be useful for ,or relevant to any proceedings under the indian income tax act
THE POWERS OF SEARCH AND SEIZURE Section 132
1) To Enter And Search Any Place, Vessel,Vehicle ,Aircraft Or building , where there is a reasonable suspicion that such books of accounts ,money ,bullion,jewellery, documents or other valuable article or thing are kept.
2) To Break Open The Lock of any of the door ,box,locker ,safe ,almirah or another receptacle for exercising the powers which are conferred by clause(i) above.
3) Search Any Person who has got out of the place if the authorised officer has a reason to suspect that person
4.) Seize any books of account, other documents, money , bullion, jewellery or other valuable article.
Such articles held as stock in trade shall not be seized but the officer shall make a note of such items.
5.) Place marks of identification in any book, document.
6. )Make a note or an inventory of such items.
7.)Require any person who is in possession or in charge of such books or documents kept in electronic form to assist the authorities to inspect such information.
The finance Act , 1988 has further provided that
where it is not possible or practicable to take possession of any valuable article or thing ,
The authorised officer may serve an order on the owner or person who is in immediate possession that he shall not remove , part with it except with the previous permission of authorised officer.
THE AUTHORIZED OFFICERS TO ISSUE ORDERS 132(1)
1)THE DIRECTOR GENERAL OF INCOME TAX
2)THE DIRECTOR OF INCOME TAX
3)THE CHIEF COMMISSIONER OF INCOME TAX
4)ANY SUCH, JOINT DIRECTOR OF INCOME TAX AS MAY BE EMPOWERED BY THE BOARD.
PREMISES UNDER THE JURIDICTION OF ANOTHER OFFICER(SECTION 132(1A)
Where any chief commissioner, ,has reason to suspect that any books of accounts ,other documents in respect of which an officer is authorised by the director general as may be empowered in this behalf by the board to take action under clauses (i) to (v) of subsection (1) are or is kept in any building , place, vessel or aircraft not mentioned in the authorization under sub section 1 in section 120 authorise the said officer to take action under any of the clauses aforesaid in respect of such building , vessel, vehicle or aircraft.
REQUISITIONING THE POLICE HELP (SECTION 132(2))
The authorised officer may requisition the service of any police officer or any officer of central government for any of the purpose specified in subsection(i) and it shall be the duty of every such officer to comply with such requisition.
ORDERING NON REMOVAL OF ASSETS (132(3)):
The authorised officer may, where it is not practicable to seize any such books of accounts ,serve an order to the owner that he shall not remove ,part with or otherwise deal with except with the previous permissions of such officers.
ADMINISTERING OATH (132(4)):
The authorised officer may ,during the course of the search or seizure ,examine on oath any person who is found to be in possession or control of any relevant books of accounts,documents.
Ownership of seized books (Section 132(4A)
Where such items are found in the possession or control of any person in the course of search it may be presumed :
LEVYING OF TAX [ Section 132(5) ]
Where any money,bullion,jewellery or other valuable assets is seized under subsection ,as result of a search initiated or requisition made before the first day of july 1995 ,the assessing officer ,after affording a reasonable opportunity to aperson concerned for being heard and making such enquiry as may be prescribed shall ,within 120 days of seizure ,make an order ,with the previous approval of deputy commissioner.
1) Estimating The Undisclosed Income in a summary manner to the best of his judgement on the basis of such materials as are available with him
2)Calculating the amount of tax on the income so estimated in accordance with the provision of indian income tax act
3)Determining the amount of interest payable and the amount of penalty imposable in accordance with the provision of income tax act
4)Specifying the amount that will be required to satisfy any existing liability under this act .
RULES REGARDING RETENTION OF SEIZED BOOKS AND DOCUMENTS
4)Where the authorized officer has no jurisdiction ,
over the person ,the books of accounts or other documents or assets seized under that sub section , they shall be handed over by the authorized officer having jurisdiction over them within a period of 15 days of such seizure.
Such books may be retained for another period of 60days from the day of order for the prior approval of the DG, chief CIT or CIT. [132(8A)]
6) The person who has seized the books or documents may allow the assesse to make the copies of such documents [132(9)]
7) If a person is legally entitled to the books of accounts or other documents seized objects for any reason to the approval by chief commissioner ,he may make applicationt to board for requesting the return of book. [132(10)]
APPLICATION OF SEIZED ASSETS(SECTION 132 B)
(i) Any assets seized under the section shall be first applied to pay the existing liability under income tax act.
(ii) Next it shall be determined against tax liability determined:
: a) on the completion of assessment u/s 153 of the act .
b) on the assessment of assessment year relevant to previous year.
c) the amount of liability determined on completion of block period.
d) Amount of liability arising on an application made before the settlement commission u/s 245(C)
(iii) in case assesse has explained the source of any asset ,the authority can recover the amout of tax liability as mentioned above .
Such asset may be released to the assessed within 120 days fromthe last authorization made for search and seizure.
v) in case seized assets consist of money or partly of money and partly of other assets ,the authority may apply to such money in tax liability.
(v) the other assets shall be under the distraint and the assessing officer shall sell the assets but after prior approval of ccit and apply such money to the existing liabilities.
vi)The authorities can realise the tax by any other mode also.
(vii)The reaming asset shall be handed over to the assessee.
(viii)The govt. Shall pay an interest @½% for every month if there is any surplus of assets over liability. It shall be calculated from the date on which 120 days expire from the last day authorization was made till the completion of assessment u/s 153 A.
CONCLUSION
SEARCH AND SEIZURE WAS INTRODUCED IN THE TAX LAWS ALMOST FIVE DECADES AGO WITH AN AIM TO PREVENT EVASION OF TAX,THE INTENTION OF THE LEGISLATURE WAS NO DOUBT A NOBLE ONE ,TO CONQUER THE TENDANCY OF TAX EVASION FROM THE SOCIETY AND THUS VARIOUS POWERS WERE VESTED TO THE AUTHORITIES TO SEARCH A PERSON WHO IS SUSPECTED AND TO SEIZE THE DOCUMENTS IN THIS REGARD.