Rule 152 — Release of remaining assets under section 250. Made under s.250 of the Income-tax Act, 2025.
Rule 152 gives effect to Section 250 of the Income-tax Act, 2025. A rule cannot go beyond the section it serves: where the two seem to differ, the section governs.
The rule deals with what is left over after a seizure has been applied to the liabilities. Any assets, or proceeds of assets, which remain after the liabilities referred to in section 250(1) are discharged shall forthwith be made over or paid to the person from whose custody the assets were seized, and that handing over is to take place in the presence of two respectable witnesses.
Three things are settled: what is returned (the remainder, whether in specie or as proceeds), to whom (the person from whose custody the assets were seized), and how (forthwith, before two respectable witnesses).
Section 250(1) directs seized assets to the discharge of the liabilities it lists, but a seizure will often be worth more than those liabilities, and the section does not say what becomes of the surplus. Rule 152 returns it, and returns it to the person from whose custody it was taken rather than to whoever claims ownership, which keeps the Department out of title disputes. The requirement of two respectable witnesses gives both sides a contemporaneous record of what was handed back.
| What | Figure | The condition on it | Where |
|---|---|---|---|
| Witnesses required at the handing over | Two respectable witnesses | Their presence is required when the remaining assets or proceeds are made over or paid | Rule 152 |
| Time for making over the remainder | Forthwith | Once the liabilities referred to in section 250(1) are discharged | Rule 152 |
The return is to the person from whose custody the assets were seized. That is a possession test, not an ownership test, so a third party who says the seized asset was his has to take that up with the person it goes back to, not with the Department. "Forthwith" leaves no discretion to hold the surplus against some other or future demand once the section 250(1) liabilities are discharged. And the two witnesses are part of the obligation, not a courtesy: a handing over without them does not answer the rule, and their presence is what makes the record of the return contemporaneous.
Assets are seized from a partner's custody and later realised. After the liabilities referred to in section 250(1) are discharged, a balance of Rs. 8 lakh remains. That balance is to be paid forthwith to the partner from whose custody the assets were seized, in the presence of two respectable witnesses, even though the firm claims the money is really its own.
You meet it at the closing stage of a search or requisition proceeding, when the remaining assets or sale proceeds are handed back and the release is recorded in the presence of the two witnesses.
shall be forthwith made over or paid to the person, from whose custody the assets were seized, in the presence of two respectable witnesses