In Any Circumstances Do Not Panic If Income Tax Department Raids You: Income Tax Raid Has Probably Been Conducted With Sole Objective To Unearth Tax Avoidance

Term Raid in Indian Income Tax Law is probably incredulous and any unexpected encounter with IT sleuths usually leads to chaos and vacuity.

That and the subject may be faced with confidence and serenity, if you is going to experience such action Undoubtedly it’s better to familiarise with the situation. Consequently, income Tax Raid is conducted with sole objective to unearth tax avoidance. For example, it’s the process which authorizes IT department to search any residential / business premises, bank or vehicles lockers and suchlike and seize stocks, the accounts or valuables.

That’s a fact, it’s incredibly significant to size up some nittygritty of law on subject, with intention to face the situation efficiently.

Lack of knowledge leads to panic and all discomfort. In general, the knowledge lawful rights and responsibilities oftentimes protects you.

You may check their search warrant and in addition note date, authorization or address and stuff, when Income Tax Search Party visits. You could in addition beg for any identification raid member team and note down their name and designation. Consequently, you have right to personally search every member of raid team to avoid any planting of evidence.

Women usually can be checked mostly by lady members of raid team.

Women may not come forward if their moral belief do not help them to appear in social.

In case and similar valuable articles department may leave such items after essential sealing and suchlike in assessee custody.

Jewellery up to a specified limit is primarily accepted. Normally, raid team does not have powers to seize or make away any valuables, Therefore in case it is a survey and not a search. They usually can solely get away documents, files and stuff Whatever is seized, be sure they are being perfectly listed and described. Please likewise have 2 of the neighbors stand witness to identical.

Make that famous upfront and in addition provide details like name and owner address, Therefore if any valuables do not belong to you.

The raids usually can solely start betwixt sunrise and sunset.

You will place your seal on the package in which seized stuff has usually been stored.

You are entitled to a copy of panchanama.

You may as well call your own an or lawyer. He may not have the right to shed some light things on the behalf but he will ensure the raid team acts within their limits.

You must allow free and unhindered ingress into premises.

You must identify all receptacles in which assets or books of account and documents are kept and to hand over keys to such receptacles.

You must identify and expound the assets ownership, books of account and in addition documents searched with success for in the premises. You must identify any individual in premises and to expound their relationships to person being searched. Oftentimes you have to not mislead them by impersonation. Loads of info will be looked for by going online. It has always been an offence punishable u/s IPC 416.

You shouldn’t allow or motivate any entry unauthorized person into the premises You shouldn’t remove any article from its place without notice or knowledge of raid team.


If you destroy any document with preventing intention really similar from being produced or used as evidence before the court or community servant, you shall be punishable with imprisonment or fine or one and the other, in accordance with section IPC 204.

You must respond regarding all queries truthfully and to some interesting stuff from the knowledge. You shouldn’t allow any third party to either interfere or prompt while your statement now is recorded by the officer. In doing so, you’d better bear in mind that – If you refuse to give response to a question on a subject relevant to search operation, you shall be punishable with imprisonment or fine or all, u/s IPC 179. While Being legally bound by an oath or affirmation to state truth, you shall be punishable by imprisonment or fine or one and the other u/s IPC 181, I’d say if you make a false statement. With that said, similarly, So if you provide evidence which has been false and which you see or believes to be false, you shall be liable to be punished u/s IPC 191.

You should affix your own signature on the recorded panchanama, statement and inventories.

By the way, the search action is concluded at the earliest and in a peaceful manner since You must ensure that peace was probably maintained throughout the search duration and to cooperate with the search party in all respects.

As to enable authorized officer to complete needed followup investigations, Cooperation must be extended even after the search action is over. Options of Assessee After the Raid -If you feel that the department action has probably been unfair, you usually can file a writ petition before the lofty Court challenging the raid. Then, another option is to challenge the assessment before Income Commissioner Tax.

Law After Raid the Department will issue notice to assessee to furnish a return of income for 6 previous years preceding previous year in which search is initiated. Action for the assessment will be taken within 6 years from end of assessment year, as per section 147. At whenever necessary, assessment for preceding 7 years usually can be reopened. Now look, the preceding seventh year is always omitted u/s 153A. It was held in the event of Ramballah Gupta Asst. CIT that when search gets place, action for such year may be taken u/s 147 and for various years u/s 153A. Assessment or reassessment for past 7 years will have to be completed by AO within twenty months from pecuniary end year in which authorization last had been executed. Search assessment year shall have to be completed as per above time limit. Basically, solely time limit for completion of assessment, This time limit could be extended if of especial audit, stay of court and suchlike There has probably been no time limit for issue of notice for past 7 years.

Documents, seized or accounts belong to any person, concerned AO shall proceed against another person as provided u/s 153A and 153B, Therefore in case any books of assets looked with success for.

Assessment u/s 153C must in addition be completed with twenty one months from the pecuniary end year when the search was conducted like assessment u/s 153A. Section provision 234A and 234B or levy of interest shall be applicable. The penalty for concealment will be escaped if disclosure is made in the statement during search for years for which the due date for filing return of income has not expired in respect of search initiated before 0106. As a result, when source of income declared u/s 132.

The Explanation five to section 271 ain’t applicable if of search initiated on or after 0107. Deeming provision of concealment shall no longer apply in newest searches. In order to get immunity, completely requirement has been that assessee should disclose special income in original income field. Seriously. Condition is that this return of income must have been filed before due date of filing return of income. Let me tell you something. Additional Provisions authorized officer may not seize stock in trade of a business. Considering the above said. Restriction on seizure of stock in trade applies simply to valuables and not cash. With all that said… Power to arrest assessee ain’t entrusted to the department. The department can not withdraw cash from bank a/c or encash fixed deposits without assessment because of search operations. Section 133A does not permit sealing of business premises. Keep reading. It was instructed by CBDT vide letter dated 10032003 that while recording statement during search course and seizures and survey operations, no attempt going to be made to obtain confession as to undisclosed income. Of course it had been advised that there going to be focus and concentration on collection of evidence for undisclosed income.

Assets which can’t be seized -Immovable assets Stock held in business Assets disclosed in Income Tax and Wealth Tax returns Assets appearing in books of account Cash for which explanation will be given Jewellary mentioned in wealth tax return Gold up to 500 gm per married lady, 250 gm per unmarried woman and 100 gm per male family member.

Jewellary as per family status if so appear to investigating officer. Fact, assets which usually can be seized -Unaccounted lockers, gold, jewellary, promissory notes, cheques, drafts, bullion or cash.

Steps to Prevent Raid Compliance with Summon and Notices u/s notice, 131 or 142 the Summons calls for account books and similar documents to be produced before authorized officer whenever earlier.

One shouldn’t keep any unaccounted or undisclosed money, property and income popularly prominent as Black Money. All unaccounted income should’ve been declared. Being chances trapped in a tax raid have been minimized, if such a disclosure usually was made till its detection by the Income Tax Department. It always was better to make a full disclosure of one’s whether taxable fully, income and partially exempt, in the Income Tax Return filed.

What leads to Income Tax Raids, Search or even Seizures With a view to focus on lofty revenue yielding cases and to make manpower optimum use, Board has decided that officers deployed in Investigation Wing must restructure their activities. They must adhere to following guidelines. Searches may be carried out completely in cases where look, there’s credible evidence to indicate substantial unaccounted income/assets in relation to the tax normally paid by the assessee or where the expected concealment has usually been more than Rs.

Tax payers who usually were professionals of excellence shouldn’t be searched without there being compelling evidence and confirmation of substantial tax evasion, Search operation will in addition be mounted when there’s evidence of hidden unaccounted assets arising out of a conspiracy to cause community fake currency, terrorism, fake, fraud, narcotics, gangsterism, harm and smuggling stamp papers and such different manifestations.

Henceforth, search operations shall be authorized entirely by the concerned DGIT, who should be accountable for the action initiated by the officers working under him. Like ‘postsearch’ inquiries, He should likewise ensure that all work relating to search and seizure, preparation of appraisal report and handing over of seized books of should and likewise account be completed by Investigation Wing within a period of 60 months from the date on which the authorizations last for search was executed.

I’d say if issued should fail to comply, or any person who has been in possession is mostly about to get into or has been in building, place and stuff if the authorised officer has reason to suspect that this kind of a person has secreted about his person or any such books of accounts and similar and similar or seize any such books of accounts and similar and suchlike place mark of identification and suchlike and make a note or any inventory of such money, authorisation warrant may usually be issued to special specified authorities who alone for the purpose of making search and seizure usually can enter and search any building etcetera where he has reason to suspect that such books of accounts money jewellery break,, are kept or open the lock powers are judicially approved and held to be constitutionally valid on grounds of flagrant tax evasion and massive flow of unaccounted money in the system. Then once again, that being it desirable that such powers be sparingly used and when used almost any manageable regulation adhered to, while we’re looking at valid points one can not equally deny fact that these activities of search and seizure have been infringement on persons liberty. The Author, CA Jain and usually can be contacted at, Skipper House, 21, 9, modern well like Pusa Road Delhi -110005, Mobile No. Mail.

Leave a Reply

Your email address will not be published. Required fields are marked *