SURVEY SEARCH & SEIZURE - INCOME TAX ACT · PDF fileSURVEY SEARCH & SEIZURE - INCOME TAX ACT...

SURVEY SEARCH & SEIZURE - INCOME TAX ACT

Pradip N. Kapasi Chartered Accountant

FRIDAY, 19TH AUGUST, 2016 SIRC OF ICAI

HOTEL TAJ COROMANDEL,NUNGAMBAKKAM,

CHENNAI

1

“The powers of forcible entry, search and seizure are now so wide and safeguards for the citizen are so totally non existent, that the powers are capable of being used for extraneous reasons”

Palkhivala


2

SEARCH v. SURVEY

• POSSESSION OF INFORMATION

• APPLICATION OF MIND

• RECORDING OF REASONS

• AUTHORISATION BY COMMISSIONER/JCIT

• WITNESS

• SEIZURE OF VALUABLES

• IMPOUNDINNG

• STATEMENT ON OATH


3

SURVEYS.133A


4

PERSONS AUTHORISED

• A.O,JCIT, CIT, DI, JDI, DDI, ADI, TRO, INSPECTOR

• AREAWISE AND PERSONWISE J’DICTION – ACCOMPANING A.O.- s. 133A( c ) 1.7.95

– TDS/TCS OFFICER – 252/550 (Cal) – s.133A(2A)

– TRO - 215/275(Mad), FA, 2003

– INSPECTORS ONLY WITH AUTHORITY

– ADDL. DIR./CIT-252/29(P&H),257/123(Del)

– ALL INDIA JURISDICTION

– ASSISTANTS

• APPROVAL OF JCIT


5

PLACES

• PLACE OF BUSINESS• TDS/TCS LIMITED TO PLACE OF BUSINESS• PRINCIPAL PLACE OR NOT• WHERE BOOKS & ASSETS KEPT • RESIDENCE- GODOWN-WAREHOUSE – SISTER CONCERN– NEIGHBOUR– C.A.’S OFFICE CIR.7D, Dt.03.05.1967

• U.K. MAHAPATRA & CO. 176Taxman 203 (ORISSA)• PRIVILEDGED COMMUNICATION

– NOT STATED– PROFESSIONAL’S RESDIENCE


6

TIME FOR SURVEY

• BUSINESS HOURS

• SUNRISE AND SUNSET– TDS/TCS SURVEY

– PROFESSIONAL’S RESIDENCE

– E-COMMERCE

– HOTEL-COFFEE SHOP

– TIME FOR ENTRY - NOT FOR EXIT

– N. K. MOHNOT,215/275 (Mad)


7

POWER OF SURVEY

• COMPREHENSIVE INSPECTION – TO ENTER PLACE OF BUSINESS– TO INSPECT BOOKS AND DOCUMENTS– PLACE MARKS - TAKE COPIES-INVENTORISE – CHECK & VERIFY-STOCK, CASH, VALUABLES

• NOT FOR TDS/TCS SURVEY

– MAKE INVENTORY OF STOCK, ETC.– TO CALL FOR INFORMATION – TO RECORD STATEMENT– POWER ON NON-COMPLIANCE U/S 133-A(6)– IMPOUNDING & RETENTION

• NOT FOR TDS/TCS SURVEY


8

SUSPENSION OF ACTIVITIES /ACCESS TO TELEPHONE

• LIMITED POWERS - AFFORDING FACILITY

• GROUND RULES - RULE 4

• AMOUNTS TO CONFINEMENT

• L.R. GUPTA V. UOI, 194 /32(Del.)

• PERMISSION TO ATTEND TO REG. WORK

• ATTEMPT TO INTRODUCE S.132(2A) BY FB,92

• CONTINUITY OF BUSINESS 196/243 (All.)

• PERSONAL PRESENCE-15 TTJ (Bom.) 342


9

PERSONAL SEARCH/BREAK OPEN• FOUND ON PREMISES

• S. 132(1)(B)(ii)&(iii)- SPECIFIC POWER– ONLY WHERE SUSPECTED

• ALTERNATIVE – CONVERSION

– VOLUNTARY ACTION


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CONFINEMENT/ SEAL - PREMISES • NO POWER TO LOCK• WRONGFUL CONFINEMENT• S. 132 DOES NOT PERMIT• L.R. GUPTA V. UOI, 194 /32 (Del)• NO POWER TO SEAL OR SEIZE• SEALING PREMISES - SHYAM JEW., 196/243• NO POWER U/S 132• SEALING COMPUTER• CAN HE INSIST FOR PRINT OUT• XEROX COPY-CERTIFIED-155 CTR 21(Ker)


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REMOVAL SUMMONS & IMPOUNDING - I

• REMOVAL– NO POWER TO REMOVE - S. 133A(4)

• CASH, STOCK OR VALUABLES

– S. 133A(4) SPECIFICALLY PROHIBITED– DR. VIJAY PAHWA, 27 BCAJ 475 (Cal).– AMENDMENT w.e.f.1-7-2002

– PUNISHABLE OFFENCE, 77 TAX 273(Del) – BRINGING TO A PLACE OF SURVEY

• SUMMONS-POWER U/S 133A(6)– ONLY ON NON CO-OPERATION, 233 /736(Ker).

– BOOKS – COMP - DISK


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REMOVAL SUMMONS & IMPOUNDING II

• POWER TO IMPOUND & RETAIN – s.133A(3)– BOOKS OF ACCOUNT AND DOCUMENTS– RECORDING OF REASONS– RETAIN FOR 15 DAYS

• EXTENSION POSSIBLE


13

INSISTENCE ON COMPLETION OF BOOKS, REGISTERS, ETC.

• NO REQUIREMENT IN LAW

• MAY NOT COMPLETE WITHOUT PREJUDICE

• ERRORS HAVE TO BE RECTIFIED

• UPDATING AFTER ACTION-72 ITD 155(Mum)


14

POWERS OF INSPECTORS - LIMITATIONS

• IS AN AUTHORITY

• POWERS DEFINED IN EXPLANATION

• INSPECT BOOKS-MARKS & TAKE EXTRACTS

• JEWELLERS EMPORIUM, 48 ITD 164 (Ind)

• VENKATESHWARA TOURIST,233/736 (Ker)

• KAMAL & CO . 168TM246(RAJ)- SHORATGE

• ASSISTING THE A. O.

• RECORDING STATEMENT, 3 SOT 246(Mum.)


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ADMINISTRATION OF OATH • POWER u/s 131 & 132 BUT NOT U/S 133A– S.KHADAR KHAN & SON, 210TM248(SC)

• IMPLICATIONS UNDER ITA/IPC

• S.7 OF OATHS ACT

• CONCLUSIVE NATURE – HANUMAN AGARWAL, 17 TAXMAN 19(Pat)

– VIJAYKUMAR KESAR, 327 ITR 497(Chattisgarh)

– DHINGRA METAL, 328 ITR 384(Del.)

• PROSECUTION NOT POSSIBLE-181,193 IPC– SHERBANOO DAYA, 161 ITR 793 (Bom),

• EVIDENTAIRY VALUE– PAUL MATHEWS & SONS, 263 ITR10(Ker.)

– HOTEL SAMEAT, 323ITR353 (KER.) Pradip N. Kapasi

Chartered Accountant 16

DECLARATION &PRESENCE OF A/R

• DECLARATION– NEED FOR IT

– DEEMED CONCEALMENT

– NO PROVISION FOR IMMUNITY

• PRESENCE– NO SPECIFIC PROHIBITION

– FACILITATES WORK

– NO POWER TO REFUSE ADMISSION

– SURVEY IS NOT INTERROGATION

– NOT A CRIMINAL PROCEDURE

– ANALOGUS TO INQUIRY OR INVESTIGATION


17

POST SURVEY DETERMINATION OF INCOME


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EXCESS-SHORTAGES

• EXCESS STOCK– OVERFLOW FROM PREVIOUS YEAR

– PURCHASES

– HIGHER RATE OF GROSS PROFIT

• SHORTAGE OF STOCK– NO ADDITON POSSIBLE SHORTAGE

• JEWELLERS EMPORIUM, 48 ITD 164 (IND)– TO BE ALLOWED AS A DEDUCTION

• ESCORTS TRACTORS , 51 TTJ (DEL.) 743


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SALES - EXPENDITURE

• ONLY GROSS PROFIT OR FULL SALES– CIT V. S.M. OMER, 201 ITR 608 (CAL), 100 CTR 204 (ALL). CIT V.

PRESIDENT INDUSTRIES, 258 ITR 654 (GAU) – 228/664 (KER)

• INVESTMENT IN PURCHASES-S.69– 52 ITD 103(PAT),77 TTJ 520(NAG)

• APPLICABILITY OF 40A(3)/269-SS/269-T – M/S. SHARMA ASSOCIATES, 55 ITD 171 (PAT)

– M/S. HYNOOP FOOD & OIL, 48 ITD 203(AHD)

– M. K. MATHIVA THANAM, 31 ITD 114 (MAD)


20

PRESUMPTION & CHAPTER VI-A • PRESUMPTION– S.132(4A) NOT TO APPLY

– POSSESSION-PRIMA-FACIE PROOF

– MATRIAL IN ILLEGAL SURVEY• KAMAL & CO., 168 TAXMAN 246(RAJ.)

• CH.VI-A

– NATURE OF INCOME– NEED FOR PROPER DECLARATION

– MANNER OF ASSESMENT• KASHMIR STEEL 55 TAX 424 (ASR)

• CONTROL TOUCH 77 ITD 522 (PUN)

• SAT PAL SINGH V. ACIT, 67 TTJ (CHD) 602


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COPY & RELEASE & RETURN & TAXES

• USE AGAINST THE ASSESSEE - S. 133A(5)– B. A. YADAV, 48 ITD 54 (NAG)

– AUDI ALTERAM PARTEM

• RELEASE OF BOOKS – WITHIN 15 DAYS

– EXTENSION POSSIBLE

• REVISED RETURN

• DEMAND OF TAX BEFORE ASST. – PRIYANKA WINES, 110 STC 75 (AP)


22

REOPENING/REVISION/ADDITION

• SIMPLY NOT POSSIBLE– BALESHWAR FLOUR & OIL, 67 STC 450 (ALL)

• POSSIBLE IF MATERIAL FOUND – BADRI RAM PRASAD, 9 ITD 410

• NOT ON THE BASIS OF REPORT – MANORAJYAM, 54 ITD 116 (COCH)

• NOT AUTOMATIC – M/S. SHADILAL & SONS, 296/97/B - 25/9/98

– SMT.RAJRANI GUPTA 72 ITD 155 (MUM) • ADDN. IN REGULAR ASST. ONLY

– PRAKASH TULSIDAS V. ACIT, 73 ITD 444 (NAG)Pradip N. Kapasi Chartered Accountant

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PENALTY

• FILING OF CORRECT ROI-EXPL 5 N.A. – AMIR CHAND V. ITO, 49 ITD 606 (DEL.)

• PRESUMPTION AS TO DETEC. IN SURVEY – MAYANK ROTOPLAST, 149 TAX 364 (GUJ.)

• REVISION OF EARLIER YEARS-NO FIND– LIABLE – HASMUKHBHAI .M. PATEL V. ITO, 85 ITD 152

(AHD.) – NOT LIABLE – DCIT V. ROYAL METAL PRINTERS PVT.

LTD., 93 TTJ119(MUM)


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EXPENDITURE ON FUNCTIONS, ETC.

• POWER U/S 133A(5)• EXP. MUST BE INCURRED • MIND APPLIED• AFTER FUNCTION • NO POWER TO VISIT• ONLY IN CASES OF NON CO-OPERATION • DECLARATION NOT AS A RULE • SPOT INQUIRY - DECORATORS/CATERERS • U/S 133(1A) BY A.O. HAVING JURISDICTION


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COLLECTION OF INFORMATION

• POWER UNDER S.133 (6)– KARNATAKA BANK,255/508(SC)

• PENDING PROCEEDINGS• PERMISSION OF HIGHER AUTHORITY• SAFEGUARDS• USE OF MATERIAL – GYARSI LAL GUPTA & SONS V. ITO, 94 ITD 329 (JP.)


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SEARCH

&

SEIZURE


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REQUISITES - I

• POSSESSION OF INFORMATION– INFO. FROM CBI & ‘INFORMATION’• AJIT JAIN & ORS., 260 ITR 80 (SC)

• FORMATION OF OPINION

• REASON TO BELIEVE– WOULD NOT BE DISCLOSED

– BONA FIDE

– RECORDING OF

• AUTHORISATION– MORE THAN ONE NAME- GROUP OF CONCERNS

– COMMON AUTHORISATION• OSWALD (DR.) ANTHONY, 270 ITR 204 (PAT)


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REQUISITES - II• JURISDICTION

• SEARCH WARRANT– PLACE OF SEARCH

– NAME OF PERSONS

– PRODUCTION FOR INSPECTION

– PRESCRIBED FORM

– COMPETENT AUTHORITY

• REASON TO BELIEVE– FAILURE TO COMPLY WITH SUMMONS OR NOTICE

– WILL EVADE COMPLIANCE - BELIEF

– POSSESSION OF UNDISCLOSED INCOME OR PROPERTY

• APPLICABILITY OF CRPC29

POWERS - I• POWERS– TO SEARCH

– SEARCH OF DOCUMENTS OF RELATED PARTIES

– TO SEIZE• IMMOVABLE PROPERTIES, NOT POSSIBLE

• REMOVAL FOR SAFE CUSTODY

• NOT TO REALISE ASSETS

• RESPONSIBLE FOR SAFE CUSTODY

• GUIDELINES OF BOARD, CBDT

• STOCK-IN-TRADES, NOT POSSIBLE– PROVISION TO S.132(1)(III)

• CHARTERED ACCOUNTANT’S CLIENTS RECORDS– S.R. BATLIBOY & CO., 180 TAXMAN 350 (SC)

• SHIFTING TO CUPBOARD AND SEALING IT– DR. G. BALAKRISHNAN NAIR, 237 ITR 70 (KERALA)


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POWERS - II

• SIZE OF SEARCH PARTY

• RESUMPTION OF SEARCH

• TO REMOVE OBSTRUCTIONS

• POLICE ASSISTANCE

• DEEMED SEIZURE U/S 132(1)

• PROHIBITORY ORDERS U/S 132(3)• RETENTION OF BOOKS, DOCS & SEIZED ASSETS– RELEASE THEREOF


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POWERS - III• EXCEPTION FROM SEIZURE FOR STOCK-IN-TRADE– MAKE INVENTORY

• SEIZURE WITHOUT JURISDICTION– POWER WITH PCIT/CIT

– DELAY TO BE PREJUDICAL TO INTEREST OF REVENUE

• ATTENDING TO NORMAL DUTIES– L.R GUPTA, 59TM 305(DELHI)

• BOARD EMPOWERED TO MAKE RULES– FOR OBTAINING FREE INGRESS

– FOR SAFE CUSTODY


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DEEMED SEIZURE

• NOT POSSSIBLE OR PRACTICABLE

• TO PHYSICALLY POSSESS– VOLUME, WEIGHT, CHARICTERISTICS,

– DANGEROUS

• ORDER PROHIBITING REMOVAL– PERMISSION TO REMOVE

• NO ORDER POSSIBLE FOR STOCK-IN-TRADE


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PROHIBITORY ORDER – S.132(3)

• NOT PRACTICAL NO SEIZE– REASONS OTHER THAN FOR DEEMED SEIZURE

• PROHIBITING REMOVAL OF BOOKS, VALUABLES

• POSSIBLE TO REMOVE ON PERMISSION

• PERIOD OF 60 DAYS

• EXTENSION NOT POSSIBLE


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EXAMINATION ON OATH S.132(4)• POWER TO ADMINISTER OATH– EVIDENTIARY VALUE

• WHERE NO INCRIMINATING MATERIAL FOUND– NARESH KUMAR AGRAWAL, 53TAXXMANN.COM 306(AP)

• DELAYED RECORDING AFTER A GAP OF WEEKS– BALAJI STEEL PROFILES, 59TAXXMANN.COM 375(AP&T)

• RECORDING AT ODD HOMES

• GENERAL INVESTIGATION, NOT POSSIBLE– SMT. SHER BANOO DAYA, 161 ITR 793 (BOM)

• INSTRUCTIONS - 186/98/2013-IT (INV II) DT.18.12.2014


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PRESUMPTION – S. 132(4A)

• IN RESPECT OF BOOKS, ASSETS, ETC

• FOUND IN POSSESSION OR CONTROL

• IN THE COURSE OF SEARCH

• PRESUMPTION– BELONGS TO SUCH PERSON

– CONTENTS ARE TRUE

– SIGNATURE, HANDWRITING

– STAMP, EXECUTION

• DISCRETIONARY

• REBUTTABLE

• LIMITED PURPOSE PRESUMPTIONPradip N. Kapasi

Chartered Accountant 36

RETENTION OF BOOKS OF ACCOUNTSS. 132(8)(9) & (10)

• RETENTION UPTO 30 DAYS OF ORDER U/S 153A

• EXPENSION POSSIBLE ON WRITTEN REASON WITH APPROVAL– LIMITATION FOR EXTENTIONS

– CONTEST EXTENTION BEFORE BOARD

• POWER TO TAKE COPY & MAKE EXTRACTS


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RETRACTION - I

• ADMISSION-VALUABLE EVIDENCE• IMPORTANCE OF CORRECT FACTS • TIME OF• UNDUE INFLUENCE -ONUS • SIMPLE CONFESSION • PRIMA FACIE DOCUMENTS • AFTER ADMISSION & ROI • NOT EVENWHERE NO EVIDENCE• REL. OF CIRCUMSTANCES


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RETRACTION - II

• SHIFTING STAND NOT HELPFUL

• ONUS OF BOTH THE PARTIES

• EXAMINATION OF ASSESSEE’S CASE

• MATERIAL GATHERED IN AN ILLEGAL SEARCH

• RETRACTION OF A STATEMENT u/s 132(4)– KAILASHBEN CHOKSI, 328 ITR 411 (GUJ)

– VINOD SOLANKI, 233 ELT 157 (SC)

– F/NO./286/2/2003 DT. 10-03-2002


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IMPORTANT ASPECTS• CONSTITUTIONALLY VALID– POORAN MAL, 93 ITR SOS (SC)

• HUMAN RIGHTS RELEVANT– STATE OF BIHAR/205 TM 232 (PATNA)

• EVIDENCE COLLECTED IN AN ILLEGAL SEARCH

• COMMON AUTHORISATION – OSWALD (DR.) ANTHONY, 270 ITR 204 (PAT)

• VALIDITY & POST SEARCH FINDINGS– AMITA SAHAI (DR.) (MRS.) ,266 ITR 597 (ALL)

• ENCASHEMENT OF FD FOR SEIZURE – WINDSOME ENLECTRONICS, 269 ITR 481 (CAL)

• SCOPE OF SEARCH ON A PROFESSIONAL– S.R. BATLIBOI & CO. & ORS., 227 CTR 238 (SC)


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POST SEARCH ASSESSMENT

& PENALTY


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ASSESSMENT SCHEMES

• REGULAR PROVISIONS– SEARCH UPTO 30.06.1995

• BLOCK ASSESSMENT – SEARCH DURING 01.07.1995 TO 31.05.2003

• SPECIAL PROVISIONS– SEARCH FROM 01.06.2003, ONWARDS


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SPECIAL ASSESSMENTS – 153A - I

• FA, 2003, W.E.F. 01.06.2003

• APPLICATION TO ANY PERSON

• SPECIAL PROCEDURE FOR SEARCH CASES– SEARCH INITIATED U/S 132 AFTER 31.05.2003

– REQUISITION U/S 132A

• OVERRIDES PROVISIONS OF S. 139, 147, 148, 149, 151 & 153


43

SPECIAL ASSESSMENT – 153A -II

• A.O OBLIGATED/EMPOWERED– ISSUES NOTICE TO SUCH PERSON

• TO FURNISH ROI WITHIN PRESCRIBED TIME

• FOR 6 ASSESSMENT YEARS – EACH OF THEM

– PRECEDING YEAR OF SEARCH/REQUISITION

• FORM, VERIFICATION, PARTICULARS, MANNER

• DEEMED TO BE A OI U/S 139

• PROVISIONS OF ITA TO APPLY

– ASSESS OR REASSESS TOTAL INCOME – RATE OF TAXATION

• EACH ASSESSMENT YEAR

• . POWER TO EXEMPT ISSUE OF NOTICE

• ABATEMENT OF PENDING ASSESSMENT – ON DATE OF SEARCH

– REVIVAL


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TIME LIMIT FOR ASSESSMENT – S. 153B - I

• SUBSTITUTED PROVISION W.E.F 01.06.2016

• 21 MONTHS FOR EACH OF 6 ASSESSMENT YEARS– FROM END OF F.Y IN WHICH LAST AUTHO. EXECUTED

• 21 MONTHS FOR YEAR OF SEARCH/REQUISITION– FROM END OF F.Y IN WHICH LAST AUTHO.

EXECTED

• 21 MONTHS FOR ‘CONCERNED PERSON’ U/S 153C– FROM END OF F.Y IN WHICH LAST AUTHO. EXECUTED

– 9 MONTHS FROM END OF F.Y IN WHICH DOCUMENT HANDED OVER TO HIS A.O


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TIME LIMIT FOR ASSESSMENT S. 153B - II

• APPROPRIATE EXTENSION IN TP CASES – 33 MONTHS FOR 21 MONTHS

• DEEMED DTE OF EXECUTION OF AUTHORISATION– DATE OF CONCLUSION

• RECORDED IN LAST PANCHNAMA CASES

– DATE OF ACTUAL RECEIPT IN S. 132 REQUISITION

• CORRESPONDING ADJUSTMENT IN TIME– CASES OF STAY/REFERENCE

– MINIMUM 60 DAYS FOR A.O


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PERSON OTHER THAN SEARCHED PERSON – S. 153C - I

• AO OF SEARCHED PERSON TO HANDOVER- BOOKS, DOCUMENT, ASSETS SEIZED / REQUISITIONED

- TO AO HAVING JURISDICTION OVER OTHER PERSON

- ONLY ON FINDING THAT THEY ‘BELONG’/’RELATE’ TO ‘A

• JURISDICTIONAL AO TO PROCEED & ISSUE NOTICE- ON SATISFACTION THAT ASSETS, ETC HAVE A BEARING

- ON DETERMINATION OF INCOME OF OTHER PERSON

- ON ANY OF THAT TO PROCEEDING ASSESSMENT YEAR

• ABATEMENT OF PENDING ASSESSMENT

• POWER TO EXEMPT A CLASS OF CASES FROM ISSUE OF NOTICES


47

PERSON OTHER THAN SEARCHED PERSON – S. 153C - II

• JURISDICTIONAL AO TO ISSUE NOTICES AND ASSESS AS PER S. 153 WHERE,

- NO RETURN IS FURNISHED & NOTICE U/S 142(1) NOT ISSUED

- RETURN IS FURNISHED & NOTICE U/S 143(2) NOT ISSUED

- ASSESSMENT OR REASSESSMENT MADE


48

APPROVAL FOR ASSESSMENT - S. 153D

• ORDER TO BE PASSED WITH APPROVAL OF JCIT– WHERE PASSED BY ITO / ACIT / DCIT

• NOT REQUIRED WHERE ORDER PASSED– ON APPROVAL OF COMMISSIONER U/S 144 BA (12)


49

OTHER ASPECTS - I

• TOTAL INCOME AS PER I.T. ACT

• RATE OF TAX AS PER I.T.ACT

• PROCEDURE AS PER I.T.ACT

• NO NOTICE U/S 153- A FOR YEAR OF SEARCH

• NO TIME LIMIT FOR ISSUE OF NOTICE U/S 153- A

• NO PROVISION FOR EXT. OF TIME FOR FILING

• FRESH RETURN , IF FILED

• RETURN FOR EACH YEAR OF NOTICE


50

OTHER ASPECTS - II

• REVISION NOT PROHIBITED - NO TIME LIMIT

• RETURNS OF LOSS NOT EXCLUDED• - C/F MAY BE DENIED

• S.A. TAX AND INTEREST AS PER I.T.ACT

• ASSESSMENT / REASSESSMENT AS PER LAW

• RECTIFICATION / REVISION / REASSESSMENT

• SETTLEMENT / APPEAL


51

OTHER ASPECTS- III


•NOTICE U/S. 143(2) ESSENTIAL–MUDRA G. NANAVATI, 30 DTR 108 (BOM)

•THIRD PARTY RECORDS & “BELONGS TO A”–MEGHAMANI ORGANICS, 129 TTJ 255 (AHD.)–VIJAYBHAI N. CHANDRANI, 231 CTR 474 (GUJ)

•ABATEMENT OF COMPLETED ASSESSMENT–ARUN KUMAR BHATIA, 1 ITR 484 (DEL.-TRIB.)

•SCOPE OF SPECIAL ASSESSMENT–ARUN KUMRA BHATIA, 1 ITR 484 (DEL.-TRIB.)–RAJENDRA KUMAR, 24 DTR 194 (MP)

52

ISSUES IN SPECIAL ASSESSMENT

• NEED FOR SEIZED MATERIAL • FOR APPLYING S. 153 A TO D

• BASIS FOR ADDITION - ON MATERIAL SEIZED

• ESTIMATION ON MATERIAL SEIZED FOR ONE YEAR

• NEED FOR MODIFYING CONCLUDED MATTERS

• ‘PENDING’ AND ‘ABATEMENT’

• MATERIAL NOT BELONGING TO THIRD PARTY

- TRANSACTION DOES NOT PERTAIN TO THIRD PARTY

- POSITION WHERE MATERIAL IS ACCOUNTED


53

PENALTY


•DIFFERENT PERIODS OF PENALTY– S. 271(1)( c ) R.W. EXPL . 5 (UP TO 30-06-2007)– S. 271(1)(c ) R.W. EXPL . 5A (01-07-2007 ONWARDS)– S. 271AAA (01-07-2007 TO 30.06.2012)– S. 271AAB (01-07-2012 ONWARDS)

•DECLARATION WHERE RETURNS FILED–S.D.V. CHANDRU, 266 ITR 175 (MAD.)

•HIGHER VALUATION OF DECLARED ITEM–AVINASH GUPTA, 6 ITR 173 (KOL) (TRIB)

•LATE FILING OF RETURN–LAD DEVI KOTHARI (SMT.), 97 TTJ 421 (JAIPUR) (TRIB)

•RETURN U/S. 153A AND PENALTY–KIRTI D. PATEL, 121 ITD 159 (AHD.) ™–K. NATARAJAN, 128 TTJ 558 (BANG)

54

PENALTY U/S 271AAB - I• APPLICABLE TO SEARCH U/S 132

• INITIATED ON OR AFTER 01.07.2012

• OVERWRIDES OTHER PROVISION OF I. TAX ACT

• OBLIGATION TO PENALTY – ADDITION TO TAX

• PENALTY @ 10% OF U/I– ADMISSION U/S 132(4)

– MANNER OF DERIVING INCOME

• SPECIFIED AND SUBSTANTIATED

• PAID TAX AND INTEREST ON U/I– BY SPECIFIED DATE – S.139(1)

• FURNISHED RETURN OF INCOME– INCLUDED U/I


55

PENALTY U/S 271AAB - II• PENALTY @ 20% OF U/I– FAILED TO ADMIT U/I U/S 132(4)

– BUT DECLARED U/I IN RETURN OF INCOME

– PAID TAX WITH INTEREST ON U/I

• PENALTY @ 30% TO 90% OF U/I– WHERE NOT DECLARED OR RETURNED

• PROCEDURE AS PER S.274

• TIME LIMIT OF S.275 APPLICABLE

• S.271 & 270A NOT TO APPLY


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PROSECUTION

• S.275A – VIOLATION OF PROHIBITORY ORDER

• S.275B – VIOLATION OF DEEMED SEIZURE

• S.276C – WILLFULL EVASION OF TAX

• S.276CCC – FAILURE TO FURNISH RETURN

• S.278A – SECOND & SUBSEQUENT OFFENCES

• S.278AA – SAVINGS FOR REASONABLE CAUSE

• S.278AB – POWER TO GRANT IMMUNITY

• S.278D – PRESUMPTION U/S 132(4)

– AVAILABLE TO A.O.


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THANK YOU


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SURVEY SEARCH & SEIZURE - INCOME TAX ACT · PDF fileSURVEY SEARCH & SEIZURE - INCOME TAX ACT...

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