Section 37A - Power of search and seizure - Wealth Tax Act, 1957

1 [ 2 [ Power of search and seizure. 37A. 3 (1) Where the 4 [Director General or Director] or the 5 [Chief Commissioner or Commissioner] or any such 6 [Joint Director] or 7 [Joint 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 8 [any 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 9 [Director-General or Director] or the 10 [Chief Commissioner or Commissioner], as the case may be, may authorise any 11 [Joint Director], 12 [Joint Commissioner], 13 [Assistant Director 14 [or Deputy Director]], 15 [Assistant Commissioner 16 [or Deputy Commissioner] or Income-tax Officer], or (B) such 17 [Joint Director] or 18 [Joint Commissioner] may authorise any 19 [Assistant Director] 20 [or Deputy Director] or 21 [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, 22 [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, 23 [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; 24 [(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 25 [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: 26 Provided that where any building, place, vessel, vehicle or aircraft referred to in clause (i) is within the area of jurisdiction of any 27 [Chief Commissioner or Commissioner] but such 28 [Chief 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 29 [section 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 30 [Chief Commissioner or Commissioner] having jurisdiction over such person may be prejudicial to the interests of the revenue : 31 [ Provided 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.] 32 (2) Where any 33 [Chief Commissioner or Commissioner], in consequence of information in his possession, has reason to suspect that any books of account or other documents, 34 [money, bullion, jewellery or other valuable article or thing] in respect of which an officer has been authorised by the 35 [Director General or Director] or any other 36 [Chief Commissioner or Commissioner] or any such 37 [Joint Director] or 38 [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 39 [Chief Commissioner or Commissioner] may, notwithstanding anything contained in 40 [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. 41 [(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. 42 [ 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 person's 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. 43 [(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 44 [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 45 [Chief Commissioner or Commissioner] for such retention is obtained: Provided that the 46 [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. 47 [(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 48 [Director or, as the case may be, Commissioner] for such extension: Provided that the 49 [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 50 [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 51 [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 52 [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. 53 [(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.] 54 [(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. 55 [ 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. Sections 37A and 37B were substituted for original section 37A by the Taxation Laws (Amendment) Act, 1975, w.e.f. 1-10-1975 and original section 37A was inserted by the Wealth-tax (Amendment) Act, 1964, w.e.f. 1-4-1965. 2. See rule 10. 3. See rule 10(2)( a ), Form M. 4. Substituted vide Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. Before it was read as:- "Director of Inspection" 5. Substituted vide Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. Before it was read as:- "Commissioner" 6. Substituted vide Finance (No. 2) Act, 1998, w.e.f. 1-10-1998. Before it was read as:- "Deputy Director" Earlier "Deputy Director" was substituted for "Deputy Director of Inspection" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 7. Substituted vide Finance (No. 2) Act, 1998, w.e.f. 1-10-1998. Before it was read as:- "Deputy Commissioner" Earlier "Deputy Commissioner" was substituted for "Inspecting Assistant Commissioner" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 8. Substituted vide Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. Before it was read as:- "any articles or things including money" 9. Substituted vide Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. Before it was read as:- "Director of Inspection" 10. Substituted vide Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. Before it was read as:- "Commissioner" 11. Substituted vide Finance (No. 2) Act, 1998, w.e.f. 1-10-1998. Before it was read as;- "Deputy Director" Earlier "Deputy Director" was substituted for "Deputy Director of Inspection" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-10-1988. 12. Substituted vide Finance (No. 2) Act, 1998, w.e.f. 1-10-1998. Before it was read as:- "Deputy Commissioner" Earlier "Deputy Commissioner" was substituted for "Inspecting Assistant Commissioner" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 13. Substituted vide Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. Before it was read as:- "Assistant Director of Inspection" 14. Inserted vide Finance (No. 2) Act, 1998, w.e.f. 1-10-1998. 15. Substituted for "or Wealth-tax Officer" by the Direct Tax Laws (Amendment) Act,1987 (as amended by the Finance Act, 1988), w.e.f. 1-4-1988. 16. Inserted vide Finance (No. 2) Act, 1998, w.e.f. 1-10-1998. 17. Substituted vide Finance (No. 2) Act, 1998, w.e.f. 1-10-1998. Before it was read as:- "Deputy Director" Earlier "Deputy Director" was substituted for "Deputy Director of Inspection" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-10-1988. 18. Substituted vide Finance (No. 2) Act, 1998, w.e.f. 1-10-1998. Before it was read as:- "Deputy Commissioner" Earlier "Deputy Commissioner" was substituted for "Inspecting Assistant Commissioner" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 19. Substituted vide Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. Before it was read as:- "Assistant Director of Inspection" 20. Inserted vide Finance (No. 2) Act, 1998, w.e.f. 1-10-1998. 21. Substituted vide Direct Tax Laws (Amendment) Act,1987 (as amended by the Finance Act, 1988), w.e.f. 1-4-1988. Before it was read as:- "or Wealth-tax Officer" 22. Substituted vide Direct Tax Laws (Amendment) Act,1987, w.e.f. 1-4-1989.befoe it was read as:- "articles or things including money" 23. Substituted vide Direct Tax Laws (Amendment) Act,1987, w.e.f. 1-4-1989.befoe it was read as:- "articles or things including money" 24. Substituted vide Direct Tax Laws (Amendment) Act,1987, w.e.f. 1-4-1989 : "( iv ) seize any such books of account or other documents;" 25. Substituted vide Direct Tax Laws (Amendment) Act,1987, w.e.f. 1-4-1989. Before it was read as:- "any articles or things including money" 26. See rule 10(2)( b ) and Form M-1. 27. Substituted vide Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. Before it was read as:- "Commissioner" 28. Substituted vide Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. Before it was read as:- "Commissioner" 29. Substituted vide Direct Tax Laws (Amendment) Act, 1987 (as amended by the Finance Act,1988), w.e.f. 1-4-1988. Before it was read as:- "section 10" 30. Substituted vide Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. Before it was read as:- "Commissioner" 31. Inserted vide Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. 32. See rule 10(2)( c ) and Form M-2. 33. Substituted vide Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. Before it was read as:- "Commissioner" 34. Substituted vide Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. Before it was read as:- "articles or things including money" 35. Substituted vide Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. Before it was read as:- "Director of Inspection" 36. Substituted vide Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. Before it was read as:- "Commissioner" 37. Substituted vide Finance (No. 2) Act, 1998, w.e.f. 1-10-1998. Befoe it was read as:- "Deputy Director" Earlier "Deputy Director" was substituted for "Deputy Director of Inspection" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 38. Substituted vide Finance (No. 2) Act, 1998, w.e.f. 1-10-1998. Before it was read as:- "Deputy Commissioner" Earlier "Deputy Commissioner" was substituted for "Inspecting Assistant Commissioner" by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 39. Substituted vide Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. Before it was read as:- "Commissioner" 40. Substituted vide Direct Tax Laws (Amendment) Act,1987 (as amended by the Finance Act, 1988), w.e.f. 1-4-1988. Before it was read as:- "section 10" 41. Inserted vide Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. 42. Inserted vide Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. 43. Inserted vide Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. 44. Substituted vide Finance (No. 2) Act, 1998, w.e.f. 1-10-1998. Before it was read as:- "Deputy" 45. Substituted vide Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. Before it was read as:- "Commissioner" 46. Substituted vide Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. Before it was read as:- "Commissioner" 47. Inserted vide Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1989. 48. Substituted vide Finance (No. 2) Act,1991, w.e.f. 1-10-1991. Before it was read as:- "Chief Commissioner or Commissioner" Earlier amendment was made by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 49. Substituted vide Finance (No. 2) Act,1991, w.e.f. 1-10-1991. Before it was read as:- "Chief Commissioner or Commissioner" Earlier amendment was made by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1-4-1988. 50. Substituted vide Direct Tax Laws (Amendment) Act,1987, w.e.f. 1-4-1988. Before it was read as:- "Wealth-tax Officer" 51. Substituted vide Direct Tax Laws (Amendment) Act,1987, w.e.f. 1-4-1988. Before it was read as:- "Wealth-tax Officer" 52. Substituted vide Direct Tax Laws (Amendment) Act,1987, w.e.f. 1-4-1988. Before it was read as:- "Commissioner" 53. Inserted vide Direct Tax Laws (Amendment) Act,1987, w.e.f. 1-4-1989. 54. Substituted for the following sub-section (10) by the Direct Tax Laws (Amendment) Act,1987, w.e.f. 1-4-1989 : "(10) On receipt of the application under sub-section (9), the Board may, after giving the applicant an opportunity of being heard, pass such orders thereon as it thinks fit." 55. Inserted vide Direct Tax Laws (Amendment) Act,1987, w.e.f. 1-4-1989.