Seizure
Introduction
The Income-tax authorities may seize books of account, documents, and undisclosed assets such as money, bullion, jewellery, and other valuable articles during a search under Section 132 . Disclosed assets, immovable property, and stock-in-trade are not liable to seizure. Before seizure, the assessee may be given an opportunity to demonstrate that assets are disclosed.
Scope of Seizure
The power to seize applies only in cases of search and not in surveys. Seizure involves taking physical possession of books, documents, or assets. A deemed or constructive seizure is permissible where physical removal is impracticable.
Items that May Be Seized
The authorised officer may seize books of account or documents, including loose papers, diaries, files, agreements, and other records. Undisclosed money, bullion, jewellery, or other valuable articles representing undisclosed income may also be seized. As per Board instructions, jewellery up to 500 grams for each married woman, 250 grams for each unmarried woman, and 100 grams for each male member is not to be seized. Higher limits may be allowed based on family status or customs, subject to reporting requirements. Only articles with commercial value may be seized; articles of personal or sentimental value are excluded.
Items Not Liable to Seizure
Disclosed bank deposits cannot be seized. Stock-in-trade is excluded from deemed seizure. Deemed seizure does not apply to books, documents, cash, bullion, or jewellery.
Procedure for Seizure
Panchnama must record all events of the search, including seized and found assets. Under Rule 112(9) , a list of seized items must be prepared and provided to the searched person and forwarded to the Commissioner. As per Rule 112(10) , seized valuables must be packed, sealed, and marked. Under Rules 112(11) and 112(12) , seized items or money may be handed to a designated Custodian, who ensures safe custody and deposit with specified banks or treasury. Under Rule 112(13) , sealed packages may be opened by the authorised officer in the presence of witnesses and after notice to the person searched.
Deemed Seizure
Where physical removal of a valuable article is not possible due to size, weight, or dangerous nature, the authorised officer may issue an order restraining the owner from dealing with the item, and such restraint is treated as seizure. This applies only to valuable articles that cannot be safely removed, such as heavy or large household items, carpets, paintings, or silverware.
Restraint Order under Section 132(3)
A restraint order is temporary and is used when immediate seizure is not practicable. It may apply to books, documents, or assets liable to seizure. It differs from deemed seizure, which is limited to valuable articles incapable of physical removal.