Section 251: copying, extraction, retention and release of books of account and documents seized or requisitioned

Introduction

Section 251 governs custody of books and documents seized or requisitioned under the income-tax powers. It covers transfer to the proper Assessing Officer, inspection and copying, retention, and a route to challenge extended retention.

Key takeaways

Handover where the searching officer lacks jurisdiction

If the authorised officer who conducted the search does not have jurisdiction over the person concerned, the seized/requisitioned assets and material must be handed over to the Assessing Officer who does have jurisdiction, within one hundred and eighty days from the date the search was initiated or the requisition made. That Assessing Officer then exercises the powers relating to inspection and retention.

Right to inspect and take copies

On an application by the person from whose custody the material was seized, the authorised officer must allow that person (in the presence of the officer or an authorised person) to make copies of, or take extracts from, the seized material, at a time and place appointed by the officer.

How long material can be retained

The authorised officer may retain seized/requisitioned assets and material up to one month from the end of the quarter in which the order of assessment, reassessment or recomputation is made under Section 270(10), 271, 279 or 294(1)(c).

Retention beyond that period is possible only after recording reasons in writing and obtaining approval from the approving authority.

Even with approval, retention cannot continue beyond thirty days from the date on which all proceedings under the Income-tax Act, 1961 or this Act, for the years to which the seized material is relevant, are completed.

Objecting to prolonged retention

If a person legally entitled to the seized/requisitioned material objects to the approval given for retention beyond the standard period, they may apply to the Board, stating the reasons for the objection and requesting the return of the material. The Board must give the applicant an opportunity of being heard before passing such orders as it thinks fit.

Step-by-step flow for applying Section 251

1. 1

   Does the authorised officer have jurisdiction over the person searched?

   • No: The assets and material must be handed over to the Assessing Officer having jurisdiction within one hundred and eighty days from the date the search is initiated or the requisition is made; that Assessing Officer then exercises the powers in Sections 251(2) and 251(3). Go to the next step.
   • Yes: Go to the next step.
2. 2

   Has the person from whose custody the material was seized applied to make copies or take extracts?

   Under Section 251(2), the officer shall allow copies or extracts, in the presence of the officer or a person he empowers, at a place and time he appoints.

3. 3

   Is the retention within the ordinary period?

   Under Section 251(3)(a), assets and material may be retained up to one month from the end of the quarter in which the order of assessment, reassessment or recomputation is made under section 270(10), 271, 279 or 294(1)(c).

   • Yes: Retention is permitted without further approval.
   • No, retention is to continue beyond that: Go to the next step.
4. 4

   Have reasons been recorded and has the approving authority approved further retention?

   Section 251(3)(b) requires both. Under Section 251(4), the approving authority cannot allow retention beyond thirty days from the date on which all proceedings under the Income-tax Act, 1961 or this Act for the relevant years are completed.

5. 5

   Does the person legally entitled object to the approval?

   • Yes: He may apply to the Board stating his reasons and asking for return; the Board passes such orders as it thinks fit after giving him an opportunity of being heard (Section 251(5)).
   • No: The assets and material are held for the approved period, subject to the outer limit in Section 251(4).

Practical checklist

Frequently asked questions