Practical Aspects of Survey u/s 133A of Income Tax Act

Size: px

Start display at page:

Download "Practical Aspects of Survey u/s 133A of Income Tax Act"

Ella Richards
6 years ago
Views:

CA.BHUPENDRA SHAH 3/601,NAVJIVAN SOCIETY, LAMINGTON ROAD,MUMBAI- 400008, MOBILE:-9322507220. bhupendrashahca@hotmail.

1 CA.BHUPENDRA SHAH 3/601,NAVJIVAN SOCIETY, LAMINGTON ROAD,MUMBAI , MOBILE: Practical Aspects of Survey u/s 133A of Income Tax Act Presented by CA BHUPENDRA SHAH On 10/03/2014 at Indian Merchant Chamber.

CITC Study Circle No Point Answer 1. What is survey? 2. What is the purpose of survey? 3. What are the types of survey? 4. What is TDS SURVEY? 5. At what time survey can be conducted? 6.

2 CITC Study Circle No Point Answer 1. What is survey? 2. What is the purpose of survey? 3. What are the types of survey? 4. What is TDS SURVEY? 5. At what time survey can be conducted? 6. Who can conduct survey? 7. Whether survey can be conducted by Tax Recovery Officer/ADI /DDI/Tax Recovery Officer? 8. Whether Assessing Officer or local Assessing Officer can conduct survey? 9. Is it necessary that there is some pendency of any proceedings before Page2 Page 2

3 authorizing survey? 10. Whether only tax payer can be surveyed? 11. What are the consequences if more than one assessee operating from the same premises are found during survey? 12. Can survey team impound Books? 13. What language is to be used for recording statement? 14. What is the evidentiary value of statement recoded during not on oath like 131? 15. What are the procedures for recording the statement? 16. Can Authorised Representative sign statement on behalf of assessee? 17. What is the importance of statement recorded during survey? 18. What is the importance of confession made during the survey? 19. Can assessee be compelled to make an admission? 20. What is the power u/s 131, 131[1A]? 21. Is it mandatory to secure declaration of additional income during survey? 22. Whether survey can be conducted when ceremonies are going on? 23. Whether Branch/godown can be surveyed? 24. Whether Survey of Educational Institution is permissible? 25. What can survey team do if premises are found locked? 26. Whether Residence Of assessee or premises of 3 rd party can be surveyed? 27. Can survey party seal the premises? 28. In case of absence of Assessee, Whether survey is possible? 29. Whether Computer of Assessee can be impounded? 30. Whether Inspector can take stock or record statement or take possession of the documents? 31. What are the consequences of excess Page3 globalindiancas@yahoogroups.com Page 3

4 stock found during the survey? 32. What is the position of 3 rd Party stock lying with the assessee without approval memo? 33. What are the consequences of stock found short during the survey? 34. What are the consequences of excess cash found during the survey? 35. What are the consequences of cash found short during the survey? 36. Can disallowance u/s 40A[3] be made in respect of rough diary found during survey? 37. What are the consequences of unrecorded sales found during the survey? 38. Whether survey team can take the basis of sales made on Diwali/holiday as yard stick? 39. Whether GP addition is permissible in case of unrecorded sales? 40. What is the year of sale of flats in case of a survey of a builder? 41. Whether the survey team can value stock at MRP? 42. When no accounts, no stock register, no bills & vouchers are found during survey how does assessee reply to the question u/s 133A? 43. What are the powers of survey team u/s 133(A)(3)(iii)? 44. Whether survey team can exercise power u/s 281 B? 45. Can survey team proceeds on presumptions? 46. Can survey team make seizure of anything? 47. Can survey team be accompanied by police? 48. Can ITP/CA be surveyed? Can data be copied from the laptop of the Auditors? 49. Can assessee insist on cross examination of party whose statement is recorded by the survey team? 50. Can assessee file retraction after Page4 globalindiancas@yahoogroups.com Page 4

5 survey is over? 51. What are the rights & duties of 3 rd party during survey? 52. Is it necessary to declare source of income during the course of survey? 53. Can assessee claim deduction u/s 40[b] in respect of income declared during survey? 54. What are the consequences of refusal to answer? 55. Whether penalty u/s 271[1][c] Expl 5 applies to declaration made during the survey? 56. Whether prosecution is launched when excess stock is found during survey? 57. When transactions not recorded in the books what is the position of penalty u/s 271[1][c]? 58. What about Penalty u/s 271(1)(c) in case of inflated expenses, claims etc.? 59. What about Revised return filed after flop survey? 60. Whether penalty is leviable in case of transactions found u/s 269SS, 269T & 68? 61. Whether inferences can be made in Survey report? 62. Can Assessing Officer issue a notice of reopening after survey? 63. What is the relevancy of material gathered during survey? 64. Can return be revised after survey? 65. When firm is converted into company what are the consequences of survey? 66. Whether reference to valuation cell possible during survey? 67. Whether assessee covered by sec 44AD be surveyed? 68. Can Assessing Officer disallow depreciation only on the basis of statement? 69. No books found in survey -- At the time of survey accounts are pending for one week, can they be completed before survey team? Page5 globalindiancas@yahoogroups.com Page 5

6 70. What is the value of rough papers? 71. Can survey be converted into search? 72. Under what sections survey assessment can be made? 73. Can assessee file writ petition against illegal survey? 74. Can assessee approach Settlement commission after survey? 75. Can survey team inform Vat, excise, service tax? 76. When stock statement given to bank differs from physical/book stock what are the consequences? 77. When goods are pledged with bank, what is the position of excess stock? 78. What are the entries to be passed in respect of declaration made during the survey? 79. Is it mandatory for survey team to disclose details of Senior Officers? Survey ( Sir way) Page6 globalindiancas@yahoogroups.com Page 6

7 Page7 Page 7

8 ****************************************************************************** Exhibit -1 Transparency in Survey Operations : CBDT From the desk of Chairman,CBDT For bringing transparency in survey operations and obviate the possibility of any grievance to the taxpayers, it is decided that henceforth: I. Survey teams visiting taxpayer's premises under the provisions of section 133 A of the Income tax Act will, before the commencement of survey proceedings,provide to the taxpayer the names, designations & contact numbers of their Chief Commissioner, Commissioner &Additional/ Joint Commissioner of Income Tax. II. Inform the taxpayer that in case of any grievance or otherwise, he is free to contact Chief Commissioner /Commissioner /Addl Commissioner/Joint Commissioner of Income Tax. In order to give effect to the above instruction, survey parties will invariably carry in their survey kit names, designations & contact numbers of their CCIT / CIT / Addl / JCIT in the following proforma, on which, as a proof of implementation of above directions, signature of the taxpayer surveyed would be obtained. The said proforma, duly signed by the taxpayer,would be submitted back to the CIT,to be preserved as permanent record. SN Designation Name Contact Numbers (Landline) Cell Number ***************************************************************************** Page8 globalindiancas@yahoogroups.com Page 8

9 Exhibit 2 me TociationMumbai Archive for March, 2003 No confessional statement in the course of search, seizure and survey. Monday, March 10th, 2003 Confession of additional Income during the course of search & seizure and survey operation F. No. 286/2/2003-IT (Inv) GOVERNMENT OF INDIA MINISTRY OF FINANCE & COMPANY AFFAIRS DEPARTMENT OF REVENUE CENTRAL BOARD OF DIRECT TAXES Room No. 254/North Block, New Delhi, the 10th March, 2003 To All Chief Commissioners of Income Tax, (Cadre Contra) &All Directors General of Income Tax Inv. Sir Subject : Confession of additional Income during the course of search & seizure and survey operation -regarding Instances have come to the notice of the Board where assessees have claimed that they have been forced to confess the undisclosed income during the course of the search & seizure and survey operations. Such confessions, if not based upon credible evidence, are later retracted by the concerned assessees while filing returns of income. In these eircumstances, on confessions during the course of search & seizure and survey operations do not serve any useful purpose. It is, therefore, advised that there should be focus and concentration on collection of evidence of income which leads to information on what has not been disclosed or is not likely to be disclosed before the Income Tax Departments. Similarly, while recording statement during the course of search it seizures and survey operations no attempt should be made to obtain confession as to the undisclosed income. Any action on the contrary shall be viewed adversely. Further, in respect of pending assessment proceedings also, assessing officers should rely upon the evidences/materials gathered during the course of search/survey operations or thereafter while framing the relevant assessment orders. Yours faithfully, Sd/- (S.R.Mahapatra] Under Secretary (Inv. II) ****************************************************************************** Page9 globalindiancas@yahoogroups.com Page 9

DON T PANIC, IF INCOME TAX DEPARTMENT RAIDS YOU

DON T PANIC, IF INCOME TAX DEPARTMENT RAIDS YOU SEARCH By kkc@chhapariaassociates.com 1) The term Raid in Indian Income Tax Law is incredulous and any unexpected encounter with IT sleuths generally leads