SECTION 131 Power relating to discovery production of evidence etc

Powers Similar to a Court: Tax authorities like Assessing Officers, Deputy Commissioners,
Commissioners, and Dispute Resolution Panels have powers similar to a court under the
Code of Civil Procedure, 1908. These powers include:
o Discovering and inspecting evidence
o Summoning and questioning people under oath, including bank officers
o Forcing the production of financial records and other documents
o Issuing commissions for further investigation.
Investigative Powers for Suspected Concealment of Income: If certain tax officials suspect
that someone is hiding income within their jurisdiction, they can use these powers to
investigate the matter, even if no official proceedings are ongoing against that person.
Special Powers for International Agreements: For inquiries or investigations related to
agreements mentioned in sections 90 or 90A (likely referring to international tax treaties),
specific tax authorities can exercise these powers, as notified by the Board, regardless of
ongoing proceedings.
Impounding of Documents: Tax authorities can confiscate and hold onto financial records
and documents during proceedings under the Income Tax Act. However, there are some
conditions:
o An Assessing Officer or Assistant Director cannot confiscate documents without
providing reasons.
o They cannot keep the documents for more than fifteen days without approval from
higher-ranking tax officials like Principal Commissioners or Directors.

SECTION 132 SEARCH AND SEIZURE

Initiation of Search and Seizure: Tax authorities, based on information they possess,
may have reason to believe that:

o Someone has not produced required documents despite summons or notices.

o Someone possesses undisclosed income or property.
Authorized Officer's Powers:

o The authorized officer can search buildings, vehicles, etc., where they suspect
relevant documents or assets are kept.
o They can break locks if necessary.
o They can search individuals if they believe they're hiding relevant items.
o They can demand access to electronic records for inspection.
o They can seize relevant documents, assets, etc.
o They can mark or make copies of seized items.
o They can take police or central government officers' assistance if needed.
Presumptions and Provisions:

o There are presumptions regarding ownership and authenticity of seized items.

 o There are provisions for serving orders to prevent tampering with seized items.
o Statements made during searches can be used as evidence.
o Provisional attachment of property may occur for revenue protection.
o Valuation officers may estimate the value of seized property.
Retention and Return of Seized Items:
o Seized documents cannot be retained beyond thirty days without recording
reasons and higher authorities' approval.
o If objections arise, the Board may decide on the return of seized items.
o Provisions of the Code of Criminal Procedure apply to searches and seizures.
o The Board can establish rules regarding search and seizure procedures.

SECTION 132 A : POWER TO REQUISITION BOOKS OF

ACCOUNTS ETC
Why can they request documents?
o If the tax authority believes that someone who was supposed to
provide certain documents according to a summons or notice hasn't
done so.
o If they think certain documents might be useful for a tax-related
investigation.
o If they suspect that assets might represent undisclosed income or
property under tax laws.

Who can make the request?

Higher-ranking tax officials like the Principal Director General, Director
General, Principal Director, Director, Principal Chief Commissioner, Chief
Commissioner, Principal Commissioner, or Commissioner can authorize
lower-ranking officers like Additional Director, Additional Commissioner,
Joint Director, Joint Commissioner, Assistant Director, Deputy Director, or
Assessing Officer to make the request. We'll call this authorized officer the
"requisitioning officer."

What happens when a request is made?

o The officer or authority who has the requested documents must hand
them over to the requisitioning officer immediately or when they
believe they no longer need to keep them.
o Once the requisitioning officer receives the documents, certain rules
and procedures regarding the handling of seized assets apply, similar to
when assets are seized directly under another section of the law.

Confidentiality: The reasons for the request made by the tax authority do not
need to be disclosed to anyone else, including other authorities or the
Appellate Tribunal.

SECTION 132 B: APPLICATION OF SEIZED OR REQUISITIONED

ASSETS
Handling Seized Assets:
 o Assets seized under certain sections of the law can be used to settle any
outstanding tax liabilites.
o This includes liabilities determined during assessments, penalties, and
interests related to taxes like income tax, wealth tax, expenditure tax,
gift tax, and interest tax.

Releasing ASSETS
o If a person explains the nature and source of the seized assets
satisfactorily to the Assessing Officer within 30 days of seizure, the
Assessing Officer may release the assets, after approval from higher
authorities, except for the portion needed to cover tax liabilities.
o Such released assets must be returned within 120 days from the
execution of the authorization for seizure or requisition.

Handling Money: If the seized assets include money, the Assessing Officer
can use it to pay off tax liabilities, reducing the person's debt by that amount.

Sale of Assets:
Non-monetary assets can also be sold to cover outstanding tax liabilities.
The sale proceeds are used to pay off the remaining liabilities.

Interest on Excess Money:

If after settling liabilities there's money left from the seized assets, the
government pays interest on this excess amount.

Time Limit:
Interest is calculated from 120 days after the authorization for seizure or
requisition until the assessment is completed.

SECTION 133 : POWER TO CALL FOR INFORMATION

Who can request information:
Tax officials like the Assessing Officer, Deputy Commissioner (Appeals),
Joint Commissioner, or Commissioner (Appeals) can ask for information.

Types of information that can be requested:

o Details about partners in a firm.

o Information about the manager and members of a Hindu undivided
family.
o Information from trustees, guardians, or agents about the people they
represent.
o Details from taxpayers about payments made to others such as rent,
interest, etc., above a certain threshold.
o Information from dealers, brokers, or agents about payments related to
asset transfers.
o Any other relevant information deemed necessary by tax authorities.
Who else can exercise these powers:

Higher-ranking tax officials like Principal Director General, Director General,

Principal Chief Commissioner, Chief Commissioner, Principal Director,
Director, Principal Commissioner, or Commissioner can also exercise these
powers.
Limitations:

Lower-ranking tax authorities can't exercise these powers if there's no ongoing

tax proceeding without approval from higher authorities.
For international agreements related to taxes, special authorities can also
exercise these powers even if no tax proceeding is underway.

Section 133A POWER OF SURVEY

power of income tax authorities to conduct surveys at various places where
businesses, professions, or charitable activities are carried out. Let's break
down what it means:

Authority to Enter:

Income tax authorities have the right to enter:

a. Any place within their designated area.
b. Any place where they have jurisdiction over the person.
c. Any place authorized for entry by another income tax authority who has
jurisdiction over that area or person.

Purpose of Entry:
They can inspect books of accounts and documents.
They can check cash, stock, or other valuable items.
They can request information relevant to tax proceedings.

Expansion of Definition:
The definition of a place where business or profession is carried out includes
any other place where related documents or items are kept.

Time Restrictions:
They can only enter places of business during business hours and other places
between sunrise and sunset.

Specific Verification for Tax Deduction:

For verifying tax deductions, income tax authorities can enter offices or other
places during business hours.
They can inspect relevant documents and request information related to tax
deductions.
Actions During Survey:

They can mark or identify documents, make extracts or copies, and impound
documents if necessary.
They can take inventory of cash, stock, or valuable items.
They can record statements from individuals relevant to the tax proceedings.

Restrictions on Certain Actions:

They cannot remove cash, stock, or valuable items from the place they've
entered.
For certain actions, like impounding documents or taking inventory, higher
approval may be required.

Post-Event Reporting:
After certain functions or events, income tax authorities can request
information about related expenses and record statements, which can be used
as evidence in tax proceedings.

Enforcement of Compliance:
If someone refuses or evades their requests during the survey, income tax
authorities have powers to enforce compliance, with certain approvals required
for specific actions.

Definition Clarifications:
The term "income-tax authority" includes various officials involved in tax
administration.
"Proceeding" refers to any tax-related process either ongoing or completed.

SECTION 133B : COLLECTION OF INFORMATION

Authority to Enter:

o Income tax authorities can enter any building or place within their
assigned area or occupied by someone under their jurisdiction where a
business or profession is conducted.
o They can ask for information from the proprietor, employees, or
anyone present at the time related to the business or profession.

Time Restrictions:
They can only enter during business hours when the place is open for business.

Restrictions on Removal:
Income tax authorities are not allowed to take away any books, documents,
cash, stock, or valuable items from the building or place they've entered.

Definition Clarifications:
 o An "income-tax authority" in this section refers to a Joint
Commissioner, Assistant Director, Deputy Director, or Assessing
Officer.
It also includes an Inspector of Income-tax authorized by the Assessing
Officer to exercise these powers within their jurisdiction.

SECTION 133C ; POWER TO CALL FOR INFORMATION BY

PRESCRIBED INCOME TAX AUTHORITY
Authority to Request Information:
A designated income tax authority, as prescribed by regulations, can send a
notice to a person asking for information or documents by a specified date.
This information or documents should be verified in the specified manner and
should be relevant to any inquiry or proceeding under the tax law.
Processing of Received Information:
Once the requested information or documents are received in response to the
notice, the designated income tax authority can process this information.
The outcome of this processing can then be made available to the Assessing
Officer, who is responsible for assessing tax liabilities.

Centralized Scheme by the Board:

The tax authority's governing body, known as the Board, can create a scheme
for central issuance of notices and processing of information.
This scheme aims to streamline the process and ensure efficient handling of
information for tax assessment purposes.

Explanation of Proceeding: The term "proceeding" here refers to any legal

process or action under the tax law, as defined in the Explanation to section 133A.

SECTION 134: POWER TO INSPECT REGISTERS OF COMPANIES

 This section grants authority to specific individuals within the income tax department,
such as the Assessing Officer, Deputy Commissioner (Appeals), Joint Commissioner,
or Commissioner (Appeals), or anyone authorized by them in writing.
 They are allowed to inspect registers of members, debenture holders, or mortgagees of
any company, or any entry in these registers.
 If necessary, they can also make copies or cause copies to be made of the entries in
these registers.
 Section 135: Power of Principal Director General/Director General, Principal
Director/Director, Principal Chief Commissioner/Chief Commissioner, and Joint
Commissioner:

 This section designates certain high-ranking officials within the income tax
department, such as Principal Director General, Director General, Principal Director,
Director, Principal Chief Commissioner, Chief Commissioner, Principal
Commissioner, Commissioner, and Joint Commissioner.
 These officials are authorized to conduct inquiries under the Income Tax Act.
 They possess all the powers that an Assessing Officer has under the Act regarding
conducting inquiries.

SECTION 136 PROCEEDINGS BEFORE INCOME TAX AUTHORITIES TO BE

JUDICIAL PROCEEDINGS
 This section states that any proceeding (legal process or action) conducted under the
Income Tax Act before an income-tax authority is considered a judicial proceeding.
 For legal purposes, these proceedings are regarded as judicial in nature, as defined in
sections 193 and 228 of the Indian Penal Code (IPC).
 Additionally, every income-tax authority is considered to be a Civil Court for the
purposes of section 195 of the IPC. This section deals with giving false evidence.
 However, income-tax authorities are not considered Civil Courts for the purposes of
Chapter XXVI of the Code of Criminal Procedure, 1973. This chapter deals with the
provision for compounding of offenses.

SECTION 138 : DISCLOSURE OF INFORMATION RESPECTING ASSESSEE

Furnishing of Information to Other Authorities:

 The Board or any income-tax authority specified by it can provide information to:
 Officers, authorities, or bodies performing functions under tax laws or foreign
exchange regulations.
 Officers, authorities, or bodies specified by the Central Government through
notification in the Official Gazette if it's deemed necessary in the public interest.
 This information can be shared if it's necessary for these entities to perform their
functions effectively.
Request for Information by an Assessee:
 An individual can apply to the Principal Chief Commissioner, Chief Commissioner,
Principal Commissioner, or Commissioner in the prescribed format for information
related to themselves obtained by income-tax authorities.
 The concerned authority may furnish this information if it's satisfied that doing so is
in the public interest.
 The decision of the authority in this regard is final and cannot be challenged in any
court of law.
Central Government's Authority to Restrict Disclosure:
 The Central Government can issue orders through notification in the Official Gazette
to restrict the furnishing of information or documents by public servants.
 This restriction may be applied based on customary practices, usages, or other
relevant factors.
 Such restrictions may specify matters, classes of assessees, or authorities to whom
information or documents cannot be provided.