Law:

Section:

 A second restraint order under section 132(3) extending period of restraint cannot be issued in connection with same search and seizure action  A revenue official cannot compel bank to encash fixed deposit and make over proceeds to him  Section 132 does not confer any authority on ITO to realize assets and convert them into cash Section 132 of the Income-tax Act, 1961 - Search and seizure - General - Whether prior to insertion of sub-section (8A) to section 132 by Finance Act, 2002, there was a provision for extension of period under restraint order beyond 60 days, but after insertion of said sub-section it would not be open for revenue officials to pass a fresh restraint order under section 132(3) in relation to same search and seizure action - Held, yes - Whether, section 132 does not confer any authority on ITO to realize assets and convert them into cash - Held, yes - Whether cheques, pay orders, etc., are merely valuable documents belonging to person searched which may be seized by revenue officials, but for money in connection with these documents lying with bank, bank would be debtor of such person - Held, yes - Whether, therefore, a revenue official cannot compel bank to encash fixed deposit and make over proceeds to him - Held, yes FACTS The writ petitioner was one of the group companies of company 'A', which, according to the revenue information, floated a fictitious company in order to divert large amount of undisclosed income and money to evade lawful revenue and its network was spread all over the country through its various branches. Actually, when a particular city office was raided, large amounts from various banks in that city were found withdrawn to divert to other branches and banks to get away with that money. Consequently, search and seizure was conducted on 20-2-2004 and a restraint order under section 132(3) was also passed, as a result of which, the petitioner's managers' cheques were not honoured by the bank. The bank authorities continued to refuse the same on account of a fresh prohibitory order issued by the revenue extending period of prohibition. On writ: HELD Admittedly, the prohibitory order under section 132(3) had…

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