Your Rights
1. When Income Tax Search Party visits, you can check their search warrant and also note the date, address and authorization etc.. You can also ask for the identification of each member of the raid team and note down their name and designation.
2. You have the right to personally search every member of raid team to avoid any planting of evidence.
3. Women can be checked only by lady members of raid team.
4. Women may not come forward if their religious belief do not allow them to appear in public.
5. In case of any health related emergency you have the right to call a doctor of your choice. You also have the right to have your meals at proper time.
6. Children can go to school and after clearance.
7. In case of difficulty in seizure of jewellary or other valuable articles (except stock in trade) the department may leave such items after necessary sealing etc. in the custody of assessee. Jewellery up to a specified limit (e.g. 500 grams per married lady, 250 grams per unmarried lady and 100 grams per male member of the family) is generally accepted. If it is a survey and not a search (the warrant will specify that), the raid team does not have the powers to seize or take away any valuables. They can only take away documents, files etc.
8. Whatever is being seized, make sure they are being properly listed and described. Please also have two of your neighbors stand witness to the same.
9. If any valuables do not belong to you, make that known upfront and also provide the name, address and other details of the owner.
10. The raids can only start between sunrise and sunset.
11. You can place your own seal on the package in which seized stuff is stored.
12. You are also entitled to a copy of panchanama.
13. You can also call your C.A or lawyer. He may not have the right to explain things on your behalf but he will ensure the raid team acts within their limits.
Your Responsibilities
1. You should allow free and unhindered ingress into the premises.
2. You should identify all receptacles in which assets or books of account and documents are kept and to hand over keys to such receptacles.
3. You should identify and explain the ownership of the assets, books of account and documents found in the premises.
4. You should identify every individual in the premises and to explain their relationships to the person being searched. You should not mislead them by impersonation. It is an offence punishable u/s 416 of the IPC.
5. You should not allow or encourage the entry of any unauthorized person into the premises
6. You should not remove any article from its place without the notice or knowledge of raid team. If you destroy any document with the intention of preventing the same from being produced or used as evidence before the court or public servant, you shall be punishable with imprisonment or fine or both, in accordance with section 204 of the IPC.
7. You should answer all queries truthfully and to the best of your knowledge. You should not allow any third party to either interfere or prompt while your statement is being recorded by the officer. In doing so, you should keep in mind that –
a. If you refuse to answer a question on a subject relevant to the search operation, you shall be punishable with imprisonment or fine or both, u/s 179 of the IPC.
b. Being legally bound by an oath or affirmation to state the truth, if you make a false statement, you shall be punishable by imprisonment or fine or both u/s 181 of the IPC.
c. Similarly, if you provide evidence which is false and which you know or believes to be false, you shall be liable to be punished u/s 191 of the IPC.
8. You should affix your signature on the recorded statement, inventories and the panchanama.
9. You should ensure that peace is maintained throughout the duration of the search and to cooperate with the search party in all respects so that the search action is concluded at the earliest and in a peaceful manner.
10. Cooperation should also be extended even after the search action is over, so as to enable the authorized officer to complete necessary follow-up investigations.
Options of Assessee After the Raid –
1. If you feel that the action of the department is unfair, you can file a writ petition before the High Court challenging the raid.
2. Another option is to challenge the assessment before the Commissioner of Income Tax (Appeal).
Assets which cannot be seized –
1. Immovable assets
2. Stock held in business
3. Assets disclosed in Income Tax and Wealth Tax returns
4. Assets appearing in books of account
5. Cash for which explanation can be given
6. Jewellary mentioned in wealth tax return
7. Gold up to 500 gm per married lady, 250 gm per unmarried woman and 100 gm per male member of the family.
8. Jewellary as per the status of the family if so appear to the investigating officer.
Assets which can be seized –
1. Unaccounted cash, jewellary, gold, bullion, lockers, promissory notes, cheques, drafts.
2. Books of accounts, chits, diaries, etc.
3. Computer hard disks and other data storage devices
4. Documents of property, title deeds, etc.
Steps to Prevent Raid
(i) Compliance with Summon and Notices u/s 131(1), 142(1) and other relevant sections.
(ii) The Summons or notice calls for the books of account or other documents to be produced before the authorized officer as soon as earlier.
(iii) One should not keep any unaccounted or undisclosed money, property or income popularly known as Black Money.
(iv) All unaccounted income should be declared. If such a disclosure is made before its detection by the Income Tax Department, the chances of being trapped in a tax raid are minimized.
(v) It is always better to make a full disclosure of one's income, whether taxable fully or partially exempt, in the Income Tax Return filed.
What leads to Income Tax Raids, Search and Seizures
With a view to focus on high revenue yielding cases and to make the optimum use of manpower, the Board has decided that officers deployed in the Investigation Wing should restructure their activities. They should adhere to the following guidelines:
(i) 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;
(ii) 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;
(iii) Tax payers who are professionals of excellence should not be searched without there being compelling evidence and confirmation of substantial tax evasion.
Henceforth, search operations shall be authorized only by the concerned DGIT (Inv.), who will be accountable for the action initiated by the officers working under him. He should also ensure that all the work relating to search and seizure, like post-search inquiries, preparation of appraisal report and handing over of seized books of account, etc., should be completed by the Investigation Wing within a period of 60 days from the date on which the last of the authorizations for search was executed.
(Instruction : No. 7/2003, dated 30-07-2003.)
Reference:
For Further details, read full article on Website of CA (Chartered accountant) A. K. Jain
Article: Don't Panic, if Income Tax Department Raids You.
http://www.tjaindia.com/articles/departmentraids-301110.htm
1. When Income Tax Search Party visits, you can check their search warrant and also note the date, address and authorization etc.. You can also ask for the identification of each member of the raid team and note down their name and designation.
2. You have the right to personally search every member of raid team to avoid any planting of evidence.
3. Women can be checked only by lady members of raid team.
4. Women may not come forward if their religious belief do not allow them to appear in public.
5. In case of any health related emergency you have the right to call a doctor of your choice. You also have the right to have your meals at proper time.
6. Children can go to school and after clearance.
7. In case of difficulty in seizure of jewellary or other valuable articles (except stock in trade) the department may leave such items after necessary sealing etc. in the custody of assessee. Jewellery up to a specified limit (e.g. 500 grams per married lady, 250 grams per unmarried lady and 100 grams per male member of the family) is generally accepted. If it is a survey and not a search (the warrant will specify that), the raid team does not have the powers to seize or take away any valuables. They can only take away documents, files etc.
8. Whatever is being seized, make sure they are being properly listed and described. Please also have two of your neighbors stand witness to the same.
9. If any valuables do not belong to you, make that known upfront and also provide the name, address and other details of the owner.
10. The raids can only start between sunrise and sunset.
11. You can place your own seal on the package in which seized stuff is stored.
12. You are also entitled to a copy of panchanama.
13. You can also call your C.A or lawyer. He may not have the right to explain things on your behalf but he will ensure the raid team acts within their limits.
Your Responsibilities
1. You should allow free and unhindered ingress into the premises.
2. You should identify all receptacles in which assets or books of account and documents are kept and to hand over keys to such receptacles.
3. You should identify and explain the ownership of the assets, books of account and documents found in the premises.
4. You should identify every individual in the premises and to explain their relationships to the person being searched. You should not mislead them by impersonation. It is an offence punishable u/s 416 of the IPC.
5. You should not allow or encourage the entry of any unauthorized person into the premises
6. You should not remove any article from its place without the notice or knowledge of raid team. If you destroy any document with the intention of preventing the same from being produced or used as evidence before the court or public servant, you shall be punishable with imprisonment or fine or both, in accordance with section 204 of the IPC.
7. You should answer all queries truthfully and to the best of your knowledge. You should not allow any third party to either interfere or prompt while your statement is being recorded by the officer. In doing so, you should keep in mind that –
a. If you refuse to answer a question on a subject relevant to the search operation, you shall be punishable with imprisonment or fine or both, u/s 179 of the IPC.
b. Being legally bound by an oath or affirmation to state the truth, if you make a false statement, you shall be punishable by imprisonment or fine or both u/s 181 of the IPC.
c. Similarly, if you provide evidence which is false and which you know or believes to be false, you shall be liable to be punished u/s 191 of the IPC.
8. You should affix your signature on the recorded statement, inventories and the panchanama.
9. You should ensure that peace is maintained throughout the duration of the search and to cooperate with the search party in all respects so that the search action is concluded at the earliest and in a peaceful manner.
10. Cooperation should also be extended even after the search action is over, so as to enable the authorized officer to complete necessary follow-up investigations.
Options of Assessee After the Raid –
1. If you feel that the action of the department is unfair, you can file a writ petition before the High Court challenging the raid.
2. Another option is to challenge the assessment before the Commissioner of Income Tax (Appeal).
Assets which cannot be seized –
1. Immovable assets
2. Stock held in business
3. Assets disclosed in Income Tax and Wealth Tax returns
4. Assets appearing in books of account
5. Cash for which explanation can be given
6. Jewellary mentioned in wealth tax return
7. Gold up to 500 gm per married lady, 250 gm per unmarried woman and 100 gm per male member of the family.
8. Jewellary as per the status of the family if so appear to the investigating officer.
Assets which can be seized –
1. Unaccounted cash, jewellary, gold, bullion, lockers, promissory notes, cheques, drafts.
2. Books of accounts, chits, diaries, etc.
3. Computer hard disks and other data storage devices
4. Documents of property, title deeds, etc.
Steps to Prevent Raid
(i) Compliance with Summon and Notices u/s 131(1), 142(1) and other relevant sections.
(ii) The Summons or notice calls for the books of account or other documents to be produced before the authorized officer as soon as earlier.
(iii) One should not keep any unaccounted or undisclosed money, property or income popularly known as Black Money.
(iv) All unaccounted income should be declared. If such a disclosure is made before its detection by the Income Tax Department, the chances of being trapped in a tax raid are minimized.
(v) It is always better to make a full disclosure of one's income, whether taxable fully or partially exempt, in the Income Tax Return filed.
What leads to Income Tax Raids, Search and Seizures
With a view to focus on high revenue yielding cases and to make the optimum use of manpower, the Board has decided that officers deployed in the Investigation Wing should restructure their activities. They should adhere to the following guidelines:
(i) 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;
(ii) 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;
(iii) Tax payers who are professionals of excellence should not be searched without there being compelling evidence and confirmation of substantial tax evasion.
Henceforth, search operations shall be authorized only by the concerned DGIT (Inv.), who will be accountable for the action initiated by the officers working under him. He should also ensure that all the work relating to search and seizure, like post-search inquiries, preparation of appraisal report and handing over of seized books of account, etc., should be completed by the Investigation Wing within a period of 60 days from the date on which the last of the authorizations for search was executed.
(Instruction : No. 7/2003, dated 30-07-2003.)
Reference:
For Further details, read full article on Website of CA (Chartered accountant) A. K. Jain
Article: Don't Panic, if Income Tax Department Raids You.
http://www.tjaindia.com/articles/departmentraids-301110.htm
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