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Introduction of Income-tax Raid Process | Company Vakil

 

In India, Income tax is charged by the Central Government and the State Government. Some minor taxes have to be charged to the people belonging to a particular region such as Municipal Taxes. This levying of the tax is derived from Constitution of India which allocates different taxes among Central and State. Income Tax authorities allow all individuals, organization to self-assess their income and pay taxes if they are eligible. Sometimes due to fraudulent activities by the Individuals or organizations, the tax authority has given the power to conduct surveys and raids.

These income tax raids are made considering the facts and information, Income, Annual reports, Income tax return filed by the Individual or an entity, through payment of debit and credit card, and a network of informants. If any person systematically plans his income and expenditure and pays tax regularly, he need not worry about it.

Officers Authorised to Issue Orders for Search & Seizure

The following are the officers of the income tax department that are authorised to issue order for search and seizure under the Income Tax Act.

  1.  Director of Income Tax
  2.  Chief Commissioner of Income Tax
  3.  Commissioner of Income Tax
  4. Any Joint Director or Joint Commissioner of Income Tax as may be empowered by Board.

The Director General or the Director or the Chief Commissioner or Commissioner or Joint Commissioner or Joint Director who have been sanctioned by the Board can approve any officer subordinate to him not below the rank of Income Tax Officer to conduct a search. The officer so authorized is known as Authorized Officer and such authorization is done by offering a search warrant in the Form 45.

When can Income Tax Raid be conducted

Under the Income Tax Act, an income tax raid can be conducted when the Officer has in his or her possession any vital information through which he has a reason to believe that:

  • A person to whom a summon with reference to Section 131(1) of the act or a notice with reference to Section 142(1) of the act has been served to produce books of accounts or other documents has been unsuccessful or omitted to bring into being or cause to be produced the said books of accounts or additional documents;
  • A person to whom a summon is issued with reference to Section 131(1) of the act or a notice with reference to Section 142(1) of the act has been or may be issued is not possible to produce or caused to be produced any books of account or other document that shall be useful for or related to any proceedings under the Act;
  • A person is in control of money, bullion, jewellery or any other valuable article or things and such property represents totally or partly income or property that has not been disclosed or shall not be disclosed.

Therefore, an Authorised Officer should have sufficient reason to conduct a search if a person has not properly produced book of accounts with response to notices or / summons and/or the Officer has possibly cause to believe the person is in possession of undisclosed income or property.

Powers of the Authorised Officer While Conducting Search

The following are the powers provided to an Authorised Officer while conducting a search and a seizure operation:

  • To Enter plus search any building, place, vessel, vehicle or aircraft where he has reason to suspect that such books of accounts, other documents, money, bullion, jewellery or other valuable article or thing are reserved.
  • To break open the lock of any door, box, locker, safe, almirah or other receptacle for exercising the powers conferred by clause (i) above where the keys are not accessible.
  • Search any such person who has got out of, or is about to get into, or is in the building, place, vessel, vehicle or aircraft, if the authorized officer has reason to suspect that such person has secreted about his person any such books of account, other documents, money, bullion, jewellery or other precious article or anything.
  • Demand any person who is established to be in possession or control of any books of account or any other documents maintained in electronic records, to afford the compulsory facility to the sanctioned officer to examine all books of account or other documents.
  • Seize any such books of account, other documents, money, bullion, jewellery or any other precious article or thing discovered as a result of such search. Nevertheless, , the authorized officer shall have no powers to seize any bullion, jewellery or other precious article or thing being a part of stock-in-trade of the business encountered as a result of search. He shall make a note or inventory of such stock-in- trade of business.
  • Place any marks of identification on any books of account or other documents or make or motive to be made extracts or copies there from.
  • Make a reminder or a list of any such money, bullion, jewellery or other precious article or thing.

 

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