Introduction

It was since 1956 that the provisions of search and seizure had made its first entry into the Income Tax Act, 1961. Finance Act, 1964 was substitutes of Section 132. Two committees had made certain recommendations on the search and seizure provisions that are

  • The Raja Chellaiah Committee and,
  • The Kelkar Committee.

The article below tells us about the search and seizures under the Income Tax Act, 1961.

The Authorized Officers to issue orders

  1. The Director General of Income Tax, or
  2. The Director of Income Tax, or
  3. The Chief Commissioner of Income Tax, or
  4. The Commissioner of Income Tax, or
  5. Any such Joint Director or Joint Commissioner of Income Tax as may be empowered by the Board.

The Director General or Director or the Chief Commissioner or Commissioner or Joint Commissioner or Joint Director who thus have been empowered by the Board can authorize any of the officers who are subordinate to him not below the rank of the  Income Tax Officer to conduct a search. Issuing of a search warrant in Form 45 is done by Authorized Officer and the authorization.

Circumstances under Search and Seizure

132(1)

The authorized officer who is thus duly empowered by the Board has in his possession any information through which he has reason to believe that –

132(1)(a)

A person to whom a summon u/s 131(1) or a notice u/s 142(1) has however been served in order to produce books of accounts or other documents has thus failed or omitted to produce or cause to be produced the said books of accounts or other documents, or,

132(1)(b)

A person to whom such a summon u/s 131(1) or a notice u/s 142(1) has thus been or it might be issued is thus not likely to produce or thus caused to be produced any books of account or any other document which would be useful for or either relevant to any proceedings under the Act; or

132(1) (c)

If any bullion, jewelry, money is in possession of a person or any other valuable article/ thing and that kind of property represents wholly/partly income or the property which has not been disclosed or it would not be disclosed.

The persons who are to be searched for are:

(a)  Who has books of account or the documents which have not been produced or are not likely to be produced in response to the notices or / summons, or

(b) Persons who are in possession of any undisclosed property or income

Basis for Search and Seizure

The assessing officer must always have a reason to believe that the person, whether or not a notice has been served on him, is thus  not likely to produce his books, etc. in such a case, the basic is that the person would suppress books of account and other documents which may thus  be useful and also relevant to income tax proceedings. Here thus the authorizing authority, if challenged, is thus required to prove the basis of belief.

Also, there must be information with the authorizing authority that is related to two matters. First, the person should be in possession of money and secondly, such money represents either wholly or partly income or the property which has not been disclosed.

The powers of Search and Seizure

  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, jewelry, 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 where the keys thereof are not available.
  3. 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 authorized officer thus has a reason to suspect that such person has secreted about his person any such books of account, other documents, money, bullion, jewelry or other valuable article or thing.
  4. Require any person who is however found to be in possession or in control of any books of account or any other document which is maintained in the form of electronic records, to afford the necessary facility to the authorized officer in order to inspect all such books of account or other documents.
  5. Placemarks of identification on any of the books of account or any other documents or make or cause to be made extracts or copies therefrom.
  6. Make a note or an inventory of any such money, bullion, jewelry or any other valuable article or a thing.

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