Assistance to authorised officer during search and seizure – Budget 2023
Section 132 of the Act makes provisions related to search and seizure. The section makes detailed provisions for powers of income-tax authority during the search and seizure proceedings, procedure to be followed, requisition of services of other officers for assistance, examination of books of account or other documents, procedure for custody of evidence, provisional attachment etc. The section also provides the timelines to be followed by the income-tax authority during and post search proceedings.
2. The section provides that during the course of search, the authorised officer may requisition the services of any police officer or any officer of the Central Government, to assist him for any of the actions required to be performed during the course of such search, and it shall be the duty of such officer to comply. Similarly, there is also a provision that the authorised officer may make a reference to a valuation officer for estimating the fair market value of the property and such reference can be made during the search or within 60 days from the date of executing the last authorisation for search.
3. In the recent past, due to the increased use of technology and digitisation in every aspect including management and maintenance of accounts, digitisation of data, cloud storage etc., the procedure for search & seizure has become complex, requiring the use of data forensics, advanced technologies for decoding data etc., for complete and proper analysis of accounts. Similarly, there is an increasing trend of undisclosed income being held in a vast variety of forms of assets or investments in addition to immovable property. Valuation of such assets and decryption of information often require specific domain experts like digital forensic professionals, valuers, archive experts etc. In addition to this, services of other professionals like locksmiths, carpenters etc. are also required in most of the cases, due to typical nature of the operations.
4. Therefore, it is proposed to amend relevant provisions of the section to provide that during the course of search the authorised officer, may requisition the services of any other person or entity, as approved by the Principal Chief Commissioner or the Chief Commissioner, the Principal Director General or the Director General, in accordance with the procedure prescribed by the Board in this regard, to assist him for the purposes of the search. Similarly, in during and post search enquiries, the authorised officer may make reference to any person or entity or any valuer registered by or under any law for the time being in force, who shall estimate the fair market value of the property in the manner prescribed and submit a report of the estimate to the authorised officer or the Assessing Officer within sixty days from the receipt of such reference.
5. This amendment will take effect from the 1st day of April, 2023.
6. Prior to the enactment of the Finance Act, 2021, the procedure for conducting such assessment in search cases was laid out in section 153A and the time limit for their completion was laid out in section 153B. Consequent to the changes in 2021, the assessment or reassessment in consequence to search is now performed under section 147 of the Act and provisions of sections 153A and 153B are no longer applicable.
7. The timelines for completing assessment or reassessment in search cases is linked to the execution of the last of the authorisations during such procedure, in order to establish the day of conclusion of search proceedings, and what constitutes as last authorisation is provided in section 153B. As the provisions of section 153B are no longer applicable, it is proposed to provide the meaning of execution of last authorisation under section 132 itself.
8. This amendment will take effect retrospectively from the 1st day of April, 2022.
[Clause 63]
Extract of relevant clause of Finance Bill 2023
Clause 63 of the Bill seeks to amend section 132 of the Income-tax Act relating to search and seizure.
Sub-section (2) of said section provides that during the course of search, the authorised officer may requisition the services of any police officer or any officer of the Central Government to assist him for any of the action required to be performed during the course of such search and it shall be duty of such officer to comply.
It is proposed to substitute sub-section (2) of the said section so as to provide that the authorised officer, during the course of search, may requisition the services of any police officer or of any officer of the Central Government, or of both, or other person or entity, as approved by the Principal Chief Commissioner or the Chief Commissioner, the Principal Director General or the Director General, in accordance with the procedure as may be provided by rules by the Board in this regard, to assist him for the purposes of the search and it shall be the duty of such officer or person or entity to comply with such requisition.
Sub-section (9D) of said section provides that the authorised officer may take a reference to a valuation officer for estimating the fair market value of the property and such reference can be made during the search or within sixty days from the date of executing the last authorisation for search.
It is further proposed to substitute sub-section (9D) of the said section to provide that, the authorised officer, during the course of a search or within sixty days from the date of the last authorisation, may make a reference to a Valuation Officer referred to in section 142A or any other person or entity or any valuer registered by or under any law for the time being in force, as may be approved by the Principal Chief Commissioner, the Chief Commissioner, the Principal Director General or the Director General, in accordance with the procedure laid down by the Board in this regard, who shall estimate the fair market value of the property in the manner as may be provided by rules, and submit a report of the estimate to the authorised officer or the Assessing Officer, as the case may be, within sixty days from the receipt of such reference.
These amendments will come into effect from 1st April, 2023.
It is also proposed to substitute Explanation 1 to the said section, so as to provide that for the purposes of sub-sections (9A), (9B) and (9D), execution of an authorisation for search shall be deemed to have been executed, in the case of search, on the conclusion of search as recorded in the last panchnama drawn in relation to any person in whose case the warrant of authorisation has been issued; and in the case of requisition under section 132A, on the actual receipt of the books of account or other documents or assets by the authorised officer.
This amendment will take effect retrospectively from 1st April, 2022.
Extract of Relevant Amendment Proposed by Finance Bill, 2023
63. Amendment of section 132.
In section 132 of the Income-tax Act,–
(a) for sub-section (2), the following sub-section shall be substituted, namely:–
“(2) The authorised officer may requisition the services of–
(i) any police officer or of any officer of the Central Government, or of both; or
(iii) any person or entity as may be approved by the Principal Chief Commissioner or the Chief Commissioner or the Principal Director General or the Director General, in accordance with the procedure, as may be prescribed, in this regard,
to assist him for all or any of the purposes specified in sub-section (1) or sub-section (1A) and it shall be the duty of every such officer or person or entity to comply with such requisition.”;
(b) for sub-section (9D), the following sub-section shall be substituted, namely:–
“(9D) The authorised officer may, during the course of the search or seizure or within a period of sixty days from the date on which the last of the authorisations for search was executed, make a reference to,–
(i) a Valuation Officer referred to in section 142A;
or
(ii) any other person or entity or any valuer registered by or under any law for the time being in force, as may be approved by the Principal Chief Commissioner or the Chief Commissioner or the Principal Director General or the Director General, in accordance with the procedure, as may be prescribed, in this regard,
who shall estimate the fair market value of the property in the manner as may be prescribed, and submit a report of the estimate to the authorised officer or the Assessing Officer, as the case may be, within a period of sixty days from the date of receipt of such reference.”;
(c) for Explanation 1, the following Explanation shall be substituted and shall be deemed to have been substituted with effect from the 1st day of April, 2022, namely:–
‘Explanation 1.–For the purposes of sub-sections (9A), (9B) and (9D), the last of authorisation for search shall be deemed to have been executed,–
(a) in the case of search, on the conclusion of search as recorded in the last panchnama drawn in relation to any person in whose case the warrant of authorisation has been issued; or
(b) in the case of requisition under section 132A, on the actual receipt of the books of account or other documents or assets by the authorised officer.’.
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