Guidelines for operation of orders u/s132(3). - Income Tax - 1583/CBDT

INSTRUCTION NO. 1583/CBDT Dated: October 27, 1984 Section 132(3) of I.T.Act, 1961 empowers the authorised officer to restrain the assessee from removing, parting with or otherwise dealing with the books valuables or other assets where it is not practicable to seize them. It has been represented to the Board that order u/s.132(3) are not lifted for considerable length of time causing avoidable loss to the assessees and embarassment to the Department. Particularly in case of stocks, the goods may deteriorate in value with the passage of time and on account of other innumerable factors. It should be appreciated that sec.132(3) can be invoked only as a short term measure and at the earliest opportunity either the goods should be seized or the prohibitory order should be lifted. The following guidelines are issued for operation of orders u/s.132(3) in respect of stocks:- 1. order u/s.132(3) should not be issued in case of goods of perishable nature. 2. The source of acquisition of the goods should be investigated and the extent of unexplained investment in stock should be determined with utmost despatch. 3. The tax, penalty and interest on the unexplained investment should be worked out in terms of section 132(5) and explanation 5 to section 271(1)(c). 4. The stock should be released on assessee's furnishing unconditional bank guarantee for the amount computed in accordance with (iii) above. 5. If the assessee refuses to give the bank guarantee the provisions of section 175 of the I.T.Act, 1961 should be invoked and the demand realised after auctioning the goods. All pending orders u/s.132(3) in regard to stock should be reviewed in the light of these instructions. The above instructions may be brought to the notice of all concerned.