Chapter 14: Income-tax Authorities, Search & Seizure Powers
1. Search & Seizure Powers (Section 132)
Authorised officer (Director General/Director/Pr. Chief Commissioner) having reason to believe that any person has failed to produce books or is in possession of undisclosed money/bullion/property, may issue a Search Warrant (Form 45).
| Power of Authorised Officer | Statutory Condition / Scope |
|---|---|
| Enter & Search | Any building, place, vessel, vehicle, or aircraft where books or assets are suspected to be kept. |
| Break Open Locks | Power to break open any door, box, locker, safe, almirah where keys are not available. |
| Search Persons | Search any person who has got out of, or is in or about such place, if suspected of secreting assets. |
| Seizure of Assets | Seize money, bullion, jewellery, or other valuable article representing undisclosed income. |
| Prohibition on Seizure | Stock-in-trade of a business cannot be seized (only inventory/valuation can be made). |
2. CBDT Guidelines on Gold Jewellery Seizure (Instruction No. 1916)
| Family Member Category | Permissible Gold Jewellery (No Seizure) | Statutory Presumption |
|---|---|---|
| Married Female Member | Up to 500 Grams | Presumed to be acquired out of Stridhan / gifts; no seizure. |
| Unmarried Female Member | Up to 250 Grams | Protected from seizure even if not explained in books. |
| Male Member of Family | Up to 100 Grams | Protected from seizure. |
3. Survey Powers (Section 133A) vs Search (Section 132)
| Parameter | Survey (Section 133A) | Search (Section 132) |
|---|---|---|
| Timing of Entry | Only during business hours at place of business. | Can enter at any time of day or night (including residential premises). |
| Power to Seize Cash | CANNOT SEIZE CASH or other valuable assets. | Can seize undisclosed cash, bullion, jewellery. |
| Impounding Books | Can impound books for max 15 days (beyond 15 days needs Pr. CIT approval). | Can seize books of account indefinitely subject to statutory retention limits. |
| Statement on Oath | Recorded under Section 131(1A); has high evidentiary value. | Recorded on oath under Section 132(4); deemed conclusive admission. |
4. Restraint Order u/s 132(3) vs Provisional Attachment u/s 132B
• Restraint Order u/s 132(3): Passed where it is not practicable to seize any valuable article or books immediately (due to physical volume or dangerous nature). The owner is directed not to remove or part with the property.
• Provisional Attachment u/s 132B: Passed to protect the interest of the revenue with prior approval of Pr. CIT; valid for a period not exceeding 6 months.
• Provisional Attachment u/s 132B: Passed to protect the interest of the revenue with prior approval of Pr. CIT; valid for a period not exceeding 6 months.
5. High-Frequency Exam Traps
Trap 1: Survey officer seizing cash balance!
Under Section 133A, the survey authority has NO POWER to seize cash. An officer can only verify and record physical cash balance against the cash book!
Under Section 133A, the survey authority has NO POWER to seize cash. An officer can only verify and record physical cash balance against the cash book!
Trap 2: Stock-in-trade seizure during search!
Section 132 explicitly states that stock-in-trade of business cannot be seized by the search team. The officer can only prepare an inventory and note down valuation details!
Section 132 explicitly states that stock-in-trade of business cannot be seized by the search team. The officer can only prepare an inventory and note down valuation details!