806/CBDT. - Income Tax - 806/CBDT

INSTRUCTION NO. 806/CBDT Dated : November 30, 1974 Section(s) Referred: 132 , Rule 112 of It Rule Statute: Income - Tax Act, 1961 Attention is invited to paragraphs 21 and 22 of Board's Confidential Circular No.25-D(LXIII--4) OF 1965 issued under F.No.15/156/66-IT (Inv) dated the 13th August, 1965 detailing the procedure to be adopted for safe custody of valuable assets seized in the course of a search. 2. Instances have come to the notice of the Board where action has not been taken immediately after the search for depositing the cash seized in the Personal Deposit account of the Commissioner as required under sub-rule 12 of Rule 112 of the Income Tax Rules, 1962. Board desire that cash seized in the course of the search should invariably be deposited in the Personal Deposit Account of the Commissioner immediately after the search except when it is to be retained for special reasons as discussed in para 3 below. Similarly, other valuable assets seized in the course of search should also be deposited with any branch of the RBI or the SBI or of its subsidiaries or Government Treasury as required under sub-rule 12 of Rule 112 of the IT Rules, 1962 immediately after the seizure. 3. Sometimes it becomes necessary to retain the seized currency without depositing the same in the Personal Deposit Account of the Commissioner concerned to preserve the identity of currency notes from the point of prosecution. For example, in a case where currency notes were seized in the course of a search the assessee claimed to have obtained the cash on a particular date, whereas the currency notes were found to bear the RBI stamp which indicated that the notes were actually issued on a date subsequent to the date claimed by the assessee. In a case of this type, the retention of currency notes is necessary as a piece of evidence for launching prosecution to prove the falsity of assessee's claim. In such cases, the Commissioner of income-tax may, after consultation with the Prosecution Counsel, retain the currency in original form and record his reasons for doing so. If in a case, retention of currency notes in its original form is found necessary the same may be placed in package and kept in safe custody of a bank/treasury as specified in the Rules.