Section 37A:
Power of search and seizure.
1(1) Where the 2
Director General or Director or the 3
Chief
Commissioner or Commissioner or any such 4
Joint Director or 5Joint Commissioner as may be
empowered in this behalf by the Board, in consequence of information in his possession, has reason to
believe that
(a) any person to whom a notice under sub-section (4) of section 16 or a summons under section
37 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 notice or summons, or
(b) any person to whom a notice or summons as aforesaid has been or might be issued will not, or
would not, produce, or cause to be produced, any books of account or other documents which will be
useful for, or relevant to, any proceeding under this Act, or
(c) any person is in possession of 6any money, bullion, jewellery or other valuable article or
thing disproportionate to his known assets, particulars of which will be useful for, or relevant to, any
proceeding under this Act,
then,
(A) the 2
Director-General or Director or the 3
Chief Commissioner or Commissioner, as the
case may be, may authorise any 4
Joint Director, 5Joint Commissioner,7Assistant Director or
Deputy Director,
8
9Assistant Commissioner or Deputy Commissioner or Income-tax Officer, or
(B) such 10
Joint Director or 11
Joint Commissioner may authorise any 1213
Assistant Director or
Deputy Director or 1415
Assistant Commissioner or Deputy Commissioner or Income-tax Officer,
(the officer so authorised in all cases being hereafter in this section referred to as the authorised officer)
to
(i) enter and search any building, place, vessel, vehicle or aircraft where he has reason to suspect
that such books of account or other documents, 16
money, bullion, jewellery or other valuable article
or thing are kept;
(ii) search any person who has got out of, or is about to get into, or is in, the building, place,
vessel, vehicle or aircraft, if the authorised officer has reason to suspect that such person has secreted
about his person any such books of account or other documents, 16
money, bullion, jewellery or other
valuable article or thing;
(iii) break open the lock of any door, box, locker, safe, almirah or other receptacle for exercising
the powers conferred by clause (i) where the keys thereof are not available;
17
(iv) seize any such books of account, other documents, money, bullion, jewellery or other
valuable article or thing found as a result of such search;
(v) place marks of identification on any such books of account or other documents or make, or
cause to be made, extracts or copies therefrom;
(vi) make a note or an inventory of 18
any money, bullion, jewellery or other valuable article or
thing found which, in his opinion, will be useful for, or relevant to, any proceeding under this Act:
Provided that where any building, place, vessel, vehicle or aircraft referred to in clause (i) is
within the area of jurisdiction of any 10Chief Commissioner or Commissioner but such 19Chief
Commissioner or Commissioner has no jurisdiction over the person referred to in clause (a) or clause
(b) or clause (c) of this sub-section, then, notwithstanding anything contained in 20section 8, it shall
be competent for him to exercise the powers under this sub-section in all cases where he has reason to
believe that any delay in getting the authorisation from the 10Chief Commissioner or Commissioner
having jurisdiction over such person may be prejudicial to the interests of the revenue:
21Provided further that where it is not possible or practicable to take physical possession of any
valuable article or thing and remove it to a safe place due to its volume, weight or other physical
characteristics or due to its being of a dangerous nature, the authorised officer may serve an order on
the owner or the person who is in immediate possession or control thereof that he shall not remove,
part with or otherwise deal with it except with the previous permission of such authorised officer and
such action of the authorised officer shall be deemed to be seizure of such valuable article or thing
under clause (iv) of this sub-section.
(2) Where any 22
Chief Commissioner or Commissioner, in consequence of information in his
possession, has reason to suspect that any books of account or other documents, 23
money, bullion,
jewellery or other valuable article or thing in respect of which an officer has been authorised by
the 24
Director General or Director or any other 22
Chief Commissioner or Commissioner or any such
25
Joint Director or 26
Joint Commissioner as may be empowered in this behalf by the Board to take
action under clauses (i) to (vi) of sub-section (1) are kept in any building, place, vessel, vehicle or aircraft
not mentioned in the authorisation under sub-section (1), such 22
Chief Commissioner or Commissioner
may, notwithstanding anything contained in 27
section 8, authorise the said officer to take action under
any of the clauses aforesaid in respect of such building, place, vessel, vehicle or aircraft.
(3) The authorised officer may requisition the services of any police officer or of any officer of the
Central Government, or of both, to assist him for all or any of the purposes specified in sub-section (1) or
sub-section (2) and it shall be the duty of every such officer to comply with such requisition.
28
(3A) The authorised officer may, where it is not practicable to seize any books of account, other
documents, money, bullion, jewellery or other valuable article or thing, for reasons other than those
mentioned in the second proviso to sub-section (1), serve an order on the owner or the person who is in
immediate possession or control thereof that he shall not remove, part with or otherwise deal with it
except with the previous permission of such officer and such officer may take such steps as may be
necessary for ensuring compliance with this sub-section.
Explanation.For the removal of doubts, it is hereby declared that serving of an order as aforesaid
under this sub-section shall not be deemed to be seizure of such books of account, other documents,
money, bullion, jewellery or other valuable article or thing under clause (iv) of sub-section (1).
(4) The authorised officer may, during the course of the search or seizure, examine on oath any
person who is found to be in possession or control of any books of account or other documents, articles or
things including money and any statement made by such person during such examination may thereafter
be used in evidence in any proceeding under this Act.
28
Explanation.For the removal of doubts, it is hereby declared that the examination of any person
under this sub-section may be not merely in respect of any books of account, other documents or assets
found as a result of the search, but also in respect of matters relevant for the purposes of any investigation
connected with any proceedings under this Act.
(5) Where any books of account or other documents, articles or things including money are found in
the possession or control of any person in the course of a search, it may be presumed that
(i) such books of account or other documents, articles or things including money belong to such
person;
(ii) the contents of such books of account or other documents are true; and
(iii) the signature and every other part of such books of account or other documents which
purport to be in the handwriting of any particular person or which may reasonably be assumed to
have been signed by, or to be in the handwriting of, any particular person, are in that persons
handwriting, and in the case of a document stamped, executed or attested, that it was duly stamped
and executed or attested by the person by whom it purports to have been so executed or attested.
29
(5A) Where any money, bullion, jewellery or other valuable article or thing (hereafter in this section
and in sections 37B and 37C referred to as the assets) is seized under sub-section (1) or sub-section (2),
the Assessing Officer, after affording a reasonable opportunity to the person concerned of being heard
and making such inquiry as may be prescribed, shall, within one hundred and twenty days of the seizure,
make an order, with the previous approval of the 30
Joint Commissioner,
(i) estimating the undisclosed net wealth in a summary manner to the best of his judgment on the
basis of such materials as are available with him;
(ii) calculating the amount of tax on the net wealth so estimated in accordance with the provisions
of this Act;
(iii) determining the amount of interest payable and the amount of any penalty imposable in
accordance with the provisions of this Act, as if the order had been the order of regular assessment;
(iv) specifying the amount that will be required to satisfy any existing liability under this Act in
respect of which such person is in default or is deemed to be in default, and retain in his custody such
assets or part thereof as are in his opinion sufficient to satisfy the aggregate of the amounts referred it
in clauses (ii), (iii) and (iv) and forthwith release the remaining portion, if any, of the assets to the
person from whose custody they were seized:
Provided that where a person has paid or made satisfactory arrangements for payment of all the
amounts referred to in clauses (ii), (iii) and (iv) or any part thereof, the Assessing Officer, may with
the previous approval of the Chief Commissioner or Commissioner release the assets or such part
thereof as he may deem fit in the circumstances of the case.
(5B) The assets retained under sub-section (5A) may be dealt with in accordance with the provisions
of section 37C.
(5C) If the Assessing Officer is satisfied that the seized assets or any part thereof were held by such
person for or on behalf of any other person, the Assessing Officer may proceed under sub-section (5A)
against such other person and all the provisions of this section shall apply accordingly.
(6) The books of account or other documents, seized under sub-section (1) or sub-section (2), shall
not be retained by the authorised officer for a period exceeding one hundred and eighty days from the
date of the seizure unless the reasons for retaining the same are recorded by him in writing and the
approval of the 31
Chief Commissioner or Commissioner for such retention is obtained:
Provided that the 31
Chief Commissioner or Commissioner shall not authorise the retention of the
books of account or other documents for a period exceeding thirty days after all the proceedings under
this Act in respect of the years for which the books of account or other documents are relevant are
completed.
29
(6A) An order under sub-section (3A) shall not be in force for a period exceeding sixty days from
the date of the order, except where the authorised officer, for reasons to be recorded in writing by him,
extends the period of operation of the order beyond sixty days, after obtaining the approval of
the 32
Director or, as the case may be, Commissioner for such extension:
Provided that the 32
Director or, as the case may be, Commissioner shall not approve the extension of
the period for any period beyond the expiry of thirty days after the completion of the proceedings under
this Act in respect of the years for which the books of account, other documents, money, bullion,
jewellery or other valuable articles or things are relevant.
(7) The person from whose custody any books of account or other documents are seized under
sub-section (1) or sub-section (2) may make copies thereof, or take extracts therefrom, in the presence of
the authorised officer or any other person empowered by him in this behalf at such place and time as the
authorised officer may appoint in this behalf.
(8) Where the authorised officer has no jurisdiction over the person referred to in clause (a) or clause
(b) or clause (c) of sub-section (1), the books of account or other documents seized under that sub-section
shall be handed over by the authorised officer to the 33
Assessing Officer having jurisdiction over such
person within a period of fifteen days of such seizure and thereupon the powers exercisable by the
authorised officer under sub-section (6) or sub-section (7) shall be exercisable by such 33
Assessing
Officer.
(9) If a person legally entitled to the books of account or other documents seized under sub-section
(1) or sub-section (2) objects for any reason to the approval given by the 34
Chief Commissioner or
Commissioner under sub-section (6), he may make an application to the Board stating therein the reasons
for such objection and requesting for the return of the books of account or other documents.
35
(9A) If any person objects for any reason to an order made under sub-section (5A), he may, within
thirty days from the date of such order, make an application to the Chief Commissioner or Commissioner
stating therein the reasons for such objection and requesting for appropriate relief in the matter.
36
(10) On receipt of the application under sub-section (9), the Board, or on receipt of the application
under sub-section (9A), the Chief Commissioner or Commissioner, may, after giving the applicant an
opportunity of being heard, pass such orders as it or he thinks fit.
(11) The provisions of the Code of Criminal Procedure, 1973 (2 of 1974), relating to searches shall
apply, so far as may be, to searches under this section.
(12) The Board may make rules in relation to searches or seizure under this section; and in particular
and without prejudice to the generality of the foregoing power, such rules may provide for the procedure
to be followed by the authorised officer
(i) for obtaining ingress into any building, place, vessel, vehicle or aircraft to be searched where
free ingress thereto is not available;
(ii) for ensuring the safe custody of any books of account or other documents seized.
35
Explanation 1.In computing the period referred to in sub-section (5A) for the purposes of that
sub-section, any period during which any proceeding under this section is stayed by an order or injunction
of any court shall be excluded.
Explanation 2.In this section, the word proceeding means any proceeding in respect of any year
under this Act which may be pending on the date on which a search is authorised under this section or
which may have been completed on or before such date and includes also proceedings under this Act
which may be commenced after such date in respect of any year.
Notes:
1. Subs. by Act 41 of 1975, s. 102, for section 37A (w.e.f. 1-10-1975). Earlier section 37A was inserted by Act 46 of 1964, s. 36
(w.e.f. 1-4-1965).
2. Subs. by Act 4 of 1988, s. 127, for Director of Inspection (w.e.f. 1-4-1988).
3. Subs. by s. 127, ibid., for Commissioner (w.e.f. 1-4-1988).
4. Subs. by Act 21 of 1998, s. 66, for Deputy Director (w.e.f. 1-10-1998). Earlier the quoted words were substituted by Act 4 of
1988, s. 127, for Deputy Director of Inspection (w.e.f. 1-4-1988).
5. Subs. by s. 66, ibid., for Deputy Commissioner (w.e.f. 1-10-1998). Earlier the quoted words were substituted by Act 4 of
1988, s. 127, for Inspecting Assistant Commissioner (w.e.f. 1-4-1988).
6. Subs. by Act 4 of 1988, s. 154, for any articles or things including money (w.e.f. 1-4-1988).
7. Subs. by Act 21 of 1998, s. 66, for Assistant Director (w.e.f. 1-10-1998). Earlier the quoted words were substituted by
Act 4 of 1988, s. 154, for Assistant Director of Inspection (w.e.f. 1-4-1988).
8. Subs. by Act 4 of 1988, s. 154, for or Wealth-tax Officer (w.e.f. 1-4-1988).
9. Subs. by Act 21 of 1998, s. 66, for Assistant Commissioner (w.e.f. 1-10-1998).
10. Subs. by Act 21 of 1998, s. 66, for Deputy Director (w.e.f. 1-10-1998). Earlier the quoted words were substituted by Act 4 of
1988, s. 127, for Deputy Director of Inspection (w.e.f. 1-4-1988).
11. Subs. by s. 66, ibid., for Deputy Commissioner (w.e.f. 1-10-1998). Earlier the quoted words were substituted by Act 4 of
1988, s. 127, for Inspecting Assistant Commissioner (w.e.f. 1-4-1988).
12 Subs. by Act 4 of 1988, s. 154, for Assistant Director of Inspection (w.e.f. 1-4-1988).
13. Subs. by Act 21 of 1998, s. 66, for Assistant Director (w.e.f. 1-10-1998).
14. Subs. by Act 4 of 1988, s. 154, for or Wealth-tax Officer (w.e.f. 1-4-1988).
15. Subs. by Act 21 of 1998, s. 66, for Assistant Commissioner (w.e.f. 1-10-1998).
16. Subs. by Act 4 of 1988, s. 154, for articles or things including money (w.e.f. 1-4-1989).
17. Subs. by s. 154, ibid., for clause (iv) (w.e.f. 1-4-1989).
18. Subs. by s. 154, ibid., for any articles or things including money (w.e.f. 1-4-1989).
19. Subs. by s. 127, ibid., for Commissioner (w.e.f. 1-4-1988).
20. Subs. by s. 154, ibid., for section 10 (w.e.f. 1-4-1988).
21. Ins. by s. 154, ibid. (w.e.f. 1-4-1989).
22. Subs. by Act 4 of 1988, s. 127, for Commissioner (w.e.f. 1-4-1988).
23. Subs. by s. 154, ibid., for articles or things including money (w.e.f. 1-4-1989).
24. Subs. by s. 127, ibid., for Director of Inspection (w.e.f. 1-4-1988).
25. Subs. by Act 21 of 1998, s. 66, for Deputy Director (w.e.f. 1-10-1998). Earlier the quoted words were substituted by Act 4 of
1988, s. 127, for Deputy Director of Inspection (w.e.f. 1-4-1988).
26. Subs. by s. 66, ibid., for Deputy Commissioner (w.e.f. 1-10-1998). Earlier the quoted words were substituted by Act 4 of
1988, s. 127, for Inspecting Assistant Commissioner (w.e.f. 1-4-1988).
27. Subs. by Act 4 of 1988, s. 154, for section 10 (w.e.f. 1-4-1988).
28. Ins. by s. 154, ibid. (w.e.f. 1-4-1989).
29. Ins. by Act 4 of 1988, s. 154 (w.e.f. 1-4-1989).
30. Subs. by Act 21 of 1998, s. 66, for Deputy Commissioner (w.e.f. 1-10-1998).
31. Subs. by Act 4 of 1988, s. 127, for Commissioner (w.e.f. 1-4-1988).
32. Subs. by Act 49 of 1991, s. 82, for Chief Commissioner or Commissioner (w.e.f. 1-10-1991).
33. Subs. by Act 4 of 1988, s. 127, for Wealth-tax Officer (w.e.f. 1-4-1988).
34. Subs. by s. 127, ibid., for Commissioner (w.e.f. 1-4-1988).
35. Ins. by s. 154, ibid. (w.e.f. 1-4-1989).
36. Subs. by s. 154, ibid., for sub-section (10) (w.e.f. 1-4-1989).