SEARCH, SEAZURE & SURVEY

UNDER INCOME TAX ACT

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 CONTENTS
OVERVIEW OF PROCESS POST SEARCH
WHEN & WHY SEARCH IS PROCEDURES
CONDUCTED RECORDING OF
HOW SEARCH IS STATEMENT AND
CONDUCTED DISCLOSURE
RIGHTS AND DUTIES OF ISSUANCE OF NOTICE, TAX
THE PERSON SEARCHED PAYMENT & FILING OF
PRECAUTIONARY RETURNS
MEASURES WHICH HELPS ASSESSMENT OF RETURNS
DURING SEARCH FILED
SEIZURES SURVEY
ITEMS WHICH CAN NOT BE
SEIZED
ITEMS WHICH CAN BE
SEIZED

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 OVERVIEW OF PROCESS
Investigation & Inquiry
Formation of Reasonable Belief
Authorisation by Competent Authority
Actual Operation
Seizure of Books, Documents, Valuables, Cash Etc
Recording of Statement & Disclosure
Appraisal Report
Issuance of Notice
Payment of Tax & Filing of Returns in response to Notice
Assessment of Returns filed
Release of Items Seized

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 WHEN & WHY SEARCH IS
CONDUCTED
• When any summons or notice issued by IT Dept is not responded

• When Summons is issue dfor production of books of accounts,

however no response is received from the asseessee.

• When Competent Authority forms belief that a person is having

unaccounted income inform of cash, bulion, jewellery, etc on the basis
of information inn his possession

• CBDT Guideline on Search & Seizure

- Searches not to be conducted casually
- Min Expected Disclosure of Rs 100.00 Lacs
- Professionals of high repute not to be searched

• Authorisation for Search

- Director of Investigation (DI)
- Deputy Director of Investigation (DDI)
- Assistant Director of Investigation

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 HOW SEARCH IS CONDUCTED
• Issuance of Search Warrants Specifying
Person and Places to be searched

• Time of Commencement and Continuance

of Search

• Manner of Search

• Closing of search operation

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 RIGHTS & DUTIES OF THE
PERSON SEARCHED
• Rights • Duties
- Right to check identity of each of the
member of search party - To allow search party of enter
- Right to have authorised representative in premises without creating
- Right to have witnesses
- Right to search every person of serch
obstacles
party when they leave the place - To sign search warrant
- To call doctor for the ill person
- To send kids to school after verification
- To give explanation when
of their school bags asked
- Female to be searched by female only -
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Restrict entry of any
To have inventory of items found and
seized unauthorised persons
- To use phones - Move any items without
- To have copy of sttements recorded permission of search party
- To have copy of books and documents
seized - To Co Operate search party

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 PRECAUTIONARY MEASURES WHICH
HELPS DURING SEARCH
• To keep cash book upto date and have idea of average cash
balance in every account / file
• To keep stock book up to date and keep on tallying the same
with physical stock at reasonable intervals
• Not to keep un necessary rough notes, chits containg any
financial data
• To have idea of assets which are on record
• To record almost all household items, major expenses,
personal expenses on books of accounts of business and to
make payment through cheque for major items of expenses
and investment
• To Cooperate and help the search party
• To have knowledge of firm names, partnership, director ship
held, companies operated and their businesses, their bank
accounts – More particularly in case of females

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 PRECAUTIONARY MEASURES WHICH
HELPS DURING SEARCH
• Not to keep any Alchoholic Drugs in Home without permit
• To take expenses of marriage and functions on books
• Not to carry on business in the proprietary concern of
female, old aged persons unless they are able to justify
running of business
• Not to have undue entries on books
• Not to keep unnecessary files on computers containing
various calculations and datas
• No disclosure if data is More Than 6 Year old
• To have bills for modification in jewellery

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 SEIZURES
• Items which can not be seized
• Items Which can be Seized
• Inventory of item Seized
• Deemed Seizure
• Utilisation of Seized Items
• Release of Seized Items

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 ITEMS WHICH CAN NOT BE SEIZED

• Immovable assets
• Stock held in business
• Items disclosed in Income Tax and Wealth tax Returns
• Items appearing in books of accounts
• Cash for which explanation can be given
• Jewellery mentioned in wealth tax return
• Gold up to 500 Gm per married woman, 250Gm per
unmarried woman and 100Gm per male member of the
family
• Jewelley as per the status of the family if so appear to
investigating officer

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 ITEMS WHICH CAN BE SEIZED

• Unaccounted cash, jewellery, gold, bullion,

lockers, promissory notes, cheques, drafts
• Books of accounts, chits, diaries etc
• Computer Hard Disks and other data
storage devises
• Documents of property, title deeds etc

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 POST SEARCH PROCEDURES
• Revocation of Prohibitory Order
• Completion of statements recorded
• Further explanations of the documents seized
• Appraisal report
• Issuance of Notice
• Assesment

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 RECORDING OF STATEMENT
AND DISCLOSURE
• Statement recorded on the date of search
• Financial Years for which disclosure can be taken
• Disclosure of Income
• Items and Documents Seized and Disclosure
• Items having bearing on the Disclosure
– Unaccounted assets
– Unaccounted Business Expenses – Wages / Purchases etc
– Unaccounted Personal expenses
– Production data and unaccounted sales
– Disclosure by third party
– Incidence of interest and penalty
– Proposed Purchase of fixed asset having higher depreciation

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 ISSUANCE OF NOTICE, TAX PAYMENT &
FILING OF RETURNS

• New scheme for assessment of Search

Cases
• Time limit for issuance of Notice
• Time limit for filing of tax return
• Applicable Taxes , Interest and Penalty
• Manner of filing tax returns

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ASSESSMENT OF RETURNS FILED

• Assessment procedures
• Status of pending assessments
• Areas which can be covered by the
Assessing Officer
• Tax Interest & Penalty

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 SURVEY
• What is Survey ?
• How it defers from Search ?
• How it is conducted ?
• No seizures
• Disclosure and Tax Payable

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THANK YOU

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