INCOME TAX SURVEY 1. The object of surveys is to ...

INCOME TAX SURVEY 1. The object of surveys is to collect information useful for enforcement. By conducting surveys, income-tax authorities independently gather information relating to financial transactions of various classes of persons as may be useful for, or relevant to, any proceedings under the Income-tax Act. Surveys also enable the department to check the veracity of the statements filed by such persons before the income-tax authorities. Information collected through surveys may lead to discovery of new assessees and stop filers. It also helps in detecting tax violations like, under reporting of income in returns of filers, failure to deduct tax at source by persons responsible for doing so, failure to pay the tax deducted at source by deductors and failure to furnish returns and statements by persons who were statutorily obliged to do so. 2. Categories of surveys 2.1 Surveys under the Income tax Act, 1961 broadly fall into following categories:- i. Surveys u/s 133A(1), ii. Surveys for checking ostentatious expenditure, u/s 133A(5), iii. Door-to-door survey u/s 133B, and IV. Collection of information by Central Information Branches from pre-determined sources 3. Survey under sub-section (1) of section 133A of the Income tax Act, 1961 3.1 Income tax authorities empowered to carry out survey :The Income-tax authorities empowered to carry out a survey u/s 133A(1) have been enumerated in the Explanation (a) below section 133A(6). 3.2 Places where survey can be carried out : For conducting a survey u/s 133A(1), an income tax authority is empowered to enter any of the following places at which a business or a profession is carried on, whether such place be the principal place or not of such business or profession:- a. any place within the limits of the area assigned to him, b. any place occupied by any person in respect of whom he exercises jurisdiction, c. any place in respect of which he is authorised, for the purposes of section 133A, by such income tax authority, who is assigned the area within which such place is situated or who exercises jurisdiction in respect of any person occupying such place 3.3 Survey can also be carried out at any other place - whether any business or profession is carried on therein or not - in which the person concerned who is carrying on the business or profession states that any of his books of account or other documents or any part of his cash or stock or other valuable article or thing relating to his business or profession is kept. 3.4 An income-tax authority may enter any place of business or profession to carry out a survey u/s 133A (1) during the hours at which such place is open for conduct of business or profession. In the case of any other place where books of account, documents or cash, stock or other valuable articles relating to the business or profession is or are kept, such authority may enter the premises only between sunrise and sunset. Powers of the Income tax authority acting under section 133-A(1) : 3.5 The powers of the Income tax authority acting under section 133-A(1) are:- i. to inspect books of account or other documents as he may require and are available at the place of survey; ii. with effect from 01.06.2002) to impound and retain in his custody for such period as he thinks fit any books of account or other documents inspected by him;2 iii. to place marks of identification on the books of account or other documents inspected and make or cause to be made extracts or copies therefrom; iv. to check or verify the cash, stock or other valuable article or thing which may be found in the place surveyed; v. to make an inventory of cash, stock or other valuable article or thing checked or verified by him; vi. to obtain from the proprietor, employee or any other person attending to, or helping in, the carrying of business or profession at the time of the survey, information as to any matter which may useful for, or relevant to, any proceedings under the Income tax Act; and vii. to record the statement of any person which may be useful for, or relevant to, any proceedings under the Income tax Act. 3.6 An authorised Inspector of Income-tax can exercise the powers mentioned at (i) and (iii) above only, namely, to inspect books of account or other documents as he may require and are available at the place of survey and to place marks of identification on the books of account or other documents inspected and make or cause to be made extracts or copies therefrom. 3.7 The Income-tax authority carrying survey u/s 133-A is, specifically prohibited from removing or causing to be removed from the place surveyed, any cash, stock or other valuable articles or things. Duties of the person whose premise is surveyed 3.8 During the course of survey, the proprietor, employee, or any other person attending to, or helping in, the carrying on of the business or profession is required to : i. afford to the income-tax authority conducting the survey, necessary facility to (a) inspect the books of account and other documents which are available at that place; and (b) check or verify the cash or stock or other valuable articles or thing which are found at that place; and ii. furnish to the income tax authority conducting the survey, such information as may be required by him on any matter which may be useful for, or relevant to, any proceedings under the Income-tax Act. 3.9 Section 133A(6) empowers the income-tax authority conducting survey (other than an authorised Inspector) to exercise powers u/s 131(1), if the person covered by the proceedings u/s 133A either refuses or evades to afford the aforesaid facilities to the income-tax authority or to furnish any information or to have his statement recorded. Summons u/s 131(1) are issued in a non-statutory form. It would be advisable if a mention of section 133A(6) is also made on the summons issued to enforce compliance with the aforesaid requirements. Non-compliance with the summons u/s 131(1) of the Act, invites penal action u/s 272A(1)(c). 3.10 Planning and preparation of survey under section 133 A(1) : A survey u/s 133A(1) of the Act needs careful planning and preparations. Ordinarily surveys under section 133A(1) should be carried out by the income-tax authorities of the charges of the Commissioners of Income-tax. These should be conducted under the direct supervision of the range Joint/Additional Commissioner of Income-tax and in consultation with the Commissioner of Income-tax. In exceptional circumstances (e.g. as a follow-up or supporting action of a search operation u/s 132), the Directorate of Income Tax (Investigation) may also conduct surveys u/s 133A(1). These should be conducted under the direct supervision of an income-tax authority, not below the rank of an Assistant Director of Income-tax (Investigation) and the Joint/Additional Director and the Director of Income-tax (Investigation) should be informed about the same as soon as possible after the commencement of the survey. TAX SURVEY TAX RAID INCOME TAX SURVEY