Application of seized assets: assets may be applied to recover tax liabilities, subject to explanation-based release and distraint.

The provision authorises recovery from assets seized or requisitioned under search or requisition to satisfy tax liabilities, including penalty and interest (excluding advance tax), aggregating liabilities arising before, during assessments consequent to the search, and those connected to settlement proceedings; the enacted text expressly includes block-period assessments under Part B of Chapter XVI. Release within the statutory period requires the Assessing Officer to be satisfied on the basis of the explanation furnished about nature and source, recovery of existing liabilities, and prior commissioner-level approval, while non-monetary assets are deemed under distraint and may be realised as prescribed.

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