Powers to requisition books of account, etc.

1. (1) Where the 2[ 3[Principal Director General or Director General] or 4[Principal Director or Director]] or the 5[ 6[Principal Chief Commissioner or Chief Commissioner] or 7[Principal 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 sub-section (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 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 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 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 2[3[Principal Director General or Director General] or 8[Principal Director or Director]] or the 5[6[Principal Chief Commissioner or Chief Commissioner] or 7[Principal Commissioner or Commissioner]] may authorise any 9[Additional Director, Additional Commissioner,] 10[Joint Director], 11[Joint Commissioner], 12[Assistant Director or Deputy Director] or 13[Assessing 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. 1[Explanation:—For the removal of doubts, it is hereby declared that the reason to believe, as recorded y the income-tax authority under this sub-section, shall not be disclosed to any person or any authority or the Appellate Tribunal.]
2. (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. (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 subsection (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.] 2[3[132B]. Application of seized or requisitioned assets.—(1) The assets seized under section 132 or requisitioned under section 132A may be dealt with in the following manner, namely:—
     • (i) the amount of any existing liability under this Act, the Wealth-tax Act, 1957 (27 of 1957), the Expenditure-tax Act, 1987 (35 of 1987), the Gift-tax Act, 1958 (18 of 1958) and the Interest-tax Act, 1974 (45 of 1974), and the amount of the liability determined on completion of the assessment 4[under section 153A and the assessment of the year relevant to the previous year in which search is initiated or requisition is made, or the amount of liability determined on completion of the assessment under Chapter XIV-B for the block period, as the case may be] (including any penalty levied or interest payable in connection with such assessment) and in respect of which such person is in default or is 5[deemed to be in default, or the amount of liability arising on an application made before the Settlement Commission under sub-section (1) of section 245C, may be recovered out of such assets]: 6[Provided that where the person concerned makes an application to the Assessing Officer within thirty days from the end of the month in which the asset was seized, for release of asset and the nature and source of acquisition of any such asset is explained] to the satisfaction of the Assessing Officer, the amount of any existing liability referred to in this clause may be recovered out of such asset and the remaining portion, if any, of the asset may be released, with the prior approval of the 7[Principal Chief Commissioner or Chief Commissioner] or 8[Principal Commissioner or Commissioner], to the person from whose custody the assets were seized: Provided further that such asset or any portion thereof as is referred to in the first proviso shall be released within a period of one hundred and twenty days from the date on which the last of the authorisations for search under section 132 or for requisition under section 132A, as the case may be, was executed: 2. Section 132A renumbered as section 132B thereof by Act 41 of 1975, s. 36 (w.e.f. 1-10-1975).
     • (ii) if the assets consist solely of money, or partly of money and partly of other assets, the 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 the Assessing Officer or, as the case may be, the Tax Recovery Officer under authorisation from the 1[Principal Chief Commissioner or Chief Commissioner] or 2[Principal Commissioner or Commissioner] under sub-section (5) of section 226 and the Assessing Officer or, as the case may be, the 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.
4. (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.
5. (3) Any assets or proceeds thereof which remain after the liabilities referred to in clause (i) of subsection (1) are discharged shall be forthwith made over or paid to the persons from whose custody the assets were seized.
6. (4) (a) The Central Government shall pay simple interest at the rate of 3[one-half per cent. for every month or part of a month] on the amount by which the aggregate amount of money seized under section 132 or requisitioned under section 132A, as reduced by the amount of money, if any, released under the first proviso to clause (i) of sub-section (1), and of the proceeds, if any, of the assets sold towards the discharge of the existing liability referred to in clause (i) of sub-section (1), exceeds the aggregate of the amount 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 one hundred and twenty days from the date on which the last of the authorisations for search under section 132 or requisition under section 132A was executed to the date of completion of the assessment 4[under section 153A or under Chapter XIVB]. 5[Explanation 1.]—In this section,—
     • (i) “block period” shall have the meaning assigned to it in clause (a) of section 158B;
     • (ii) “execution of an authorisation for search or requisition” shall have the same meaning as assigned to it in Explanation 2 to section 158BE.] 6[Explanation 2.—For the removal of doubts, it is hereby declared that the “existing liability” does not include advance tax payable in accordance with the provisions of Part C of Chapter XVII.] 5. The Explanation renumbered as Explanation 1 thereof by Act 17 of 2013, s. 34 (w.e.f. 1-6-2013).

¹ Ins. by Act 41 of 1975, s. 36 (w.e.f. 1-10-1975).

² Subs. by Act 4 of 1988, s. 2, for “Director of Inspection” (w.e.f. 1-4-1988).

³ Subs. by Act 25 of 2014, s. 4, for “Director General” (w.r.e.f. 1-6-2013).

⁴ Subs. by s. 4, ibid., for “Director” (w.r.e.f. 1-6-2013).

⁵ Subs. by Act 4 of 1988, s. 2, for “Commissioner” (w.e.f. 1-4-1988).

⁶ Subs. by Act 25 of 2014, s. 4, for “Chief Commissioner” (w.r.e.f. 1-6-2013).

⁷ Subs. by s. 4, ibid., for “Commissioner” (w.r.e.f. 1-6-2013).

⁸ Subs. by s. 4, ibid., for “Director” (w.r.e.f. 1-6-2013).

⁹ Ins. by Act 33 of 2009, s. 52 (w.e.f. 1-6-1994).

¹⁰ Subs. by Act 21 of 1998, s. 3, for “Deputy Director” (w.e.f. 1-10-1998). Earlier substituted as “Deputy Director” by Act 4 of 1988, s. 2, for “Deputy Director of Inspection” (w.e.f. 1-4-1988).

¹¹ Subs. by s. 3, ibid., for “Deputy Commissioner” (w.e.f. 1-10-1998). Earlier substituted as “Deputy Commissioner” by Act 4 of 1988, s. 2, for “Inspecting Assistant Commissioner” (w.e.f. 1-4-1988).

¹² Subs. by s. 3, ibid., for “Assistant Director” (w.e.f. 1-10-1998). Earlier substituted as “Assistant Director” by Act 4 of 1988, s. 2 for “Assistant Director of Inspection” (w.e.f. 1-4-1988).

¹³ Subs. by Act 4 of 1988, s. 2, for “Income-tax Officer” (w.e.f. 1-4-1988).

¹ Ins. by Act 7 of 2017, s. 51 (w.e.f. 1-10-1975).

³ Subs. by Act 20 of 2002, s. 57, for section 132B (w.e.f. 1-6-2002).

⁴ Subs. by Act 32 of 2003, s. 60, for “under Chapter XIVB for the block period” (w.e.f. 1-6-2003).

⁵ Subs. by Act 20 of 2015, s. 34, for “deemed to be in default, may be recovered out of such assets” (w.e.f. 1-6-2015).

⁶ Subs. by Act 32 of 2003, s. 60, for “Provided that where the nature and source of acquisition of any such asset is explained” (w.e.f. 1-6-2003).

⁷ Subs. by Act 25 of 2014, s. 4, for “Chief Commissioner” (w.e.f. 1-6-2013).

⁸ Subs. by s. 4, ibid., for “Commissioner” (w.e.f. 1-6-2013).

¹ Subs. by Act 25 of 2014, s. 4, for “Chief Commissioner” (w.e.f. 1-6-2013).

² Subs. by s. 4, ibid., for “Commissioner” (w.e.f. 1-6-2013).

³ Subs. by Act 22 of 2007, s. 43, for “six per cent. per annum” (w.e.f. 1-4-2008). Earlier “six” was substituted for “eight” by Act 54 of 2003, s. 6 (w.e.f. 8-9-2003).

⁴ Subs. by Act 32 of 2003, s. 60, for “under Chapter XIV-B” (w.e.f. 1-6-2003).

⁶ Ins. by s. 34, ibid. (w.e.f. 1-6-2013).