Provisional attachment during search under Income Tax Act and reference to Valuation Officer

CBDT CIRCULAR NO.2/2018 [F.NO.370142/15/2017-TPL], DATED 15-2-2018

53. Power of provisional attachment and to make reference to Valuation Officer to authorised officer.

53.1 Section 132 of the Income-tax Act provides the power of search and seizure subject to fulfilment of conditions specified therein.

53.2 In order to protect the interest of revenue and safeguard recovery in search cases, sub-sections (9B) and (9C) have been inserted in the said section, to provide that during the course of a search or seizure or within a period of sixty days from the date on which the last of the authorisations for search was executed, the authorised officer on being satisfied that for protecting the interest of revenue it is necessary so to do, may attach provisionally any property belonging to the assessee with the prior approval of Principal Director General or Director General or Principal Director or Director. It has been provided that such provisional attachment shall cease to have effect after the expiry of six months from the date of order of such attachment.

53.3 In order to enable correct estimation and quantification of undisclosed income held in the form of investment or property by the assessee by the Investigation wing of the Department, a new sub-section (9D) has been inserted in the section 132 of the Income-tax Act to provide that in a case of search, the authorised officer may, for the purpose of estimation of fair market value of a property, make a reference to a Valuation Officer referred to in section 142A of the Income-tax Act, for valuation in the manner provided under that sub-section. It also provides that the Valuation Officer shall furnish the valuation report within sixty days of receipt of such reference.

53.4 Explanation 1 to section 132 of the Income-tax Act has also been amended, to provide that for the purposes of sub-sections (9A), (9B) and (9D), with respect to the term “execution of an authorisation for search” the provisions of sub-section (2) of section 153B of the Income-tax Act shall apply.

53.5 Applicability: These amendments take effect from 1st April, 2017.