Restraint Order
Introduction
Section 132(3) empowers authorised officers to issue restraint orders during search operations when immediate physical seizure of assets is not practicable. Such orders remain valid for 60 days, and any contravention attracts prosecution under Section 275A .
Purpose and Scope of Restraint Order
Restraint orders allow the authorised officer reasonable time to decide whether to seize books of account, documents, or assets after examining evidence found during the search. This ensures adequate time to operate bank lockers, appraise assets, and determine whether they represent undisclosed income. The assessee also has an opportunity to establish that assets are disclosed or to declare undisclosed income under Section 132(4) .
Circumstances When a Restraint Order May Be Passed
A restraint order may be issued when physical seizure is not possible due to the volume, weight, physical characteristics, or dangerous nature of the item under the second proviso to Section 132(1) , which constitutes a deemed seizure. Separately, under Section 132(3) , an order may be passed when seizure is impracticable for reasons other than those specified above. The Explanation to Section 132(3) clarifies that such an order is not deemed to be seizure.
Difference Between Deemed Seizure under Second Proviso to Section 132(1) and Restraint Order under Section 132(3)
A restraint order under the second proviso applies only when it is impracticable to take physical possession due to specified physical characteristics, and such restraint is treated as actual seizure. A restraint order under Section 132(3) applies when books, documents, money, bullion, jewellery, or other valuable articles represent undisclosed income but cannot be seized for reasons unrelated to physical characteristics. Such an order is expressly not considered seizure.
Conditions for Passing a Restraint Order under Section 132(3)
The books, documents, or assets must be liable to seizure and should represent undisclosed income. Disclosed assets cannot be subjected to restraint orders. Stock-in-trade cannot be seized; hence no restraint order can be passed against it. Restraint also cannot be imposed on regular bank accounts unless they are benami or undisclosed. The authorised officer must have reason to believe that the items represent concealed income, though the presumption is that assets found during search are undisclosed unless proven otherwise.
Validity Period of Restraint Order
A restraint order under Section 132(3) is valid for 60 days from the date of the order. After expiry, the order automatically lapses, and no seizure of the restrained items can be made. There is no provision for extension of this period.
Manner of Passing a Restraint Order
The order must be in writing. Although the statute does not require recording reasons in the restraint order, the officer should document them in the panchnama or in a separate note. The officer must satisfy himself that the assets are liable to seizure and that seizure is not practicable. The officer may take necessary steps to ensure compliance, such as sealing premises, taking keys, or posting guards, though these actions are discretionary.
Consequences of Contravention
Violation of a restraint order issued under Section 132(3) is punishable under Section 275A .