The search and survey operations conducted by the
Income tax department, is commonly known as Income tax raids (‘raids’). Raids has always been one of the worst nightmares of businessmen, high earners and corporates. Some
reasons for fear being heavy tax and penalty payments, possible
devastating impact on the business, mental harassment faced during such raids
etc.
If you
are likely to experience such action it is better to familiarise with the
subject, so that, the situation can be faced with confidence and serenity.
Criteria’s
for Raid:
With a
view to focus on high revenue yielding cases and to make the optimum use of
manpower, the Central Board of Direct Taxes has decided that officers deployed
in the Investigation Wing should adhere to the following guidelines:
a.
Searches should be carried out only in cases where there is
credible evidence to indicate substantial unaccounted income/assets in relation
to the tax normally paid by the assessee or where the expected concealment is
more than Rs. 1 crore;
b.
Search operation will also be mounted when there is evidence of
hidden unaccounted assets arising out of a conspiracy to cause public harm,
terrorism, smuggling, narcotics, fraud, gangsterism, fake currency, fake stamp
papers and such other manifestations;
c.
Tax payers who are professionals of excellence should not be
searched without there being compelling evidence and confirmation of
substantial tax evasion.
Do’s and
Don’ts during the raids
The
following do’s and don’ts in nutshell can assist in reducing the impact of the
dreaded procedure of raids-
1.
Maintain proper and updated books of accounts
2.
Copies of important documents like returns of income/wealth
filed, assessment orders, tax payment challans should be readily available.
3.
Investments made in assets should be properly accounted and
supporting evidence should be available to substantiate the investment made.
4.
Statements recorded at the time of search are very crucial. One
should be very cautious and careful while answering the question and the person
questioned should not panic.
5.
It is important to be co-operative and cordial with the search
and survey teams.
Tax Payer:
Duties
a.
He should not restrict the Income Tax Officials from checking his
premises.
b.
He should handover the keys of lockers and almirahs for peaceful
operation.
c.
He should introduce the persons present in his house and their
relation with him.
d.
He should sign the recorded statements and Panchanama after
careful reading.
e.
He should not remove anything from the premises without
intimating the officials.
f.
He should give the statement as per his knowledge to the
officials.
Rights
·
He can check the notice and identity cards of officers engaged
in search operation.
·
He can check the officers before and after the search operation.
·
To see the warrant of authorization duly signed and sealed by
the issuing authority.
·
He can keep two local persons as witnesses.
·
If necessary, he can call Doctor.
·
Assessee himself can remain present during search operations.
·
He can appoint tax consultant, CA/Lawyer to present his case
during the search operation.
·
He can ask for lady officials to check his female relatives.
·
He can go for his regular work such as pooja, taking food or
others.
·
He can send his children to school; if needed after checking
their schoolbags.
·
He can move outside the premises with due permission of the
Competent Officer.
·
He can check the statements written by the Income Tax Officers.
·
He can take true copies of Panchanama, Statement & other
related documents.
·
He can sign on the paper seal put on the seized goods and
recheck his signature at the time of breaking the seal in court or other places.
·
He can oppose for seizure of such goods, which are declared in
Income Tax Return.
·
Under section 132 (5) after the search operation he can ask the
competent officers to seize goods worth due income tax and take back other
seized goods.
Income
Tax Officer
Powers
1.
He cannot arrest anybody.
2.
The officers can enter into any building, place or vehicle owned
by the person. They can even search the persons coming to these areas. They can
break the locks of almirahs and locker for search.
3.
They can check the account and other related documents and can
seize them.
4.
They can seize cash, gold or silver, jewellery held above the
specified limit.
Assets
that cannot be seized
a.
Immovable assets
b.
Stock held in business
c.
Assets disclosed in Income Tax and Wealth Tax returns
d.
Assets appearing in regular books of account
e.
Cash for which explanation can be given
f.
Jewellery mentioned in wealth tax return
g.
Gold up to 500 gm per married lady, 250 gm per unmarried woman
and 100 gm per male member of the family.
h.
Jewellery as per the status of the family if so appear to the
investigating Officer
Assets that can be seized
a. Unaccounted cash, jewellery, gold, bullion, lockers, promissory notes, cheques, drafts.
b. Books of accounts, chits, diaries, etc.
c. Computer hard disks and other data storage devices.
d. Documents of property, title deeds, etc.
Having unaccounted assets/income? File your Tax Returns now. Contact us at: info@preethamandco.com or Fill in the Work Request Form Click Here
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