What is Search and Seizure under Section 132 of Income Tax Act 1961?

Section 132 of the Income Tax Act, 1961 provides the legal framework for search and seizure proceedings by income-tax authorities. It authorises specified senior income-tax authorities to order a search where, based on information in their possession, they have reason to believe that undisclosed income, property, books of account or documents may be found.

Meaning of Search and Seizure

Search means the authorised inspection of premises, persons or places to locate books of account, documents, money, bullion, jewellery or other valuable articles relevant to income-tax proceedings. Seizure means taking custody of such material or assets in accordance with the statutory procedure.

Conditions for exercise of power under Section 132

• The competent authority must possess information leading to a reason to believe as required by law.
• The authorised officer may enter and search specified premises, vehicles or other places.
• Books of account, documents and assets representing undisclosed income may be seized subject to statutory restrictions.
• Electronic records and digital documents may also be examined in accordance with applicable provisions.

Powers of authorised officer

The authorised officer may conduct search, inspect records, make copies or extracts, prepare inventories, seize relevant material and examine persons on oath during the proceedings as provided under Section 132.

Important safeguards

Search and seizure powers are extraordinary powers and must be exercised strictly in accordance with the Income Tax Act, 1961 and applicable rules. The reasons recorded by the income-tax authority form part of the statutory process.

Related provisions

Section 132A deals with requisition of books of account or assets. Section 132B deals with application of seized or requisitioned assets. Other related provisions include assessment proceedings following search under the Income Tax Act.