INCOME TAX SEARCH U/S 132

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INCOME TAX SEARCH U/S 132

• PRESENTED BY
• DR. RAJ K. AGARWAL
• M.COM, FCA, FCS, AICWA, LLB, Ph.D
• M/S RAKESH RAJ ASSOCIATES
• CHARTERED ACCOUNTANTS

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INCOME TAX SEARCH U/S 132

• Highly rigorous process.
• Harshest weapon with Department.
• Invading privacy completely.

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INCOME TAX SEARCH U/S 132

• OBJECTIVE
• -To collect evidences of undisclosed
  income/investment.
• -To seize undisclosed assets.
• -Deterrence effect

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INCOME TAX SEARCH U/S 132

• Initiation of Search Proceedings
• Proper search warrant by competent authority.
• Process of search, rights and duties of the
  assessee and authorized officer.

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INCOME TAX SEARCH U/S 132

• Role of the counsel
• - Managing from outside
• - Collection of evidences of the assets
• likely to be seized.
• - Reach the premises, if called for.

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INCOME TAX SEARCH U/S 132

• During Search Proceedings
• Inventorisation of cash/ jewellery/ stock/ other
  valuables.
• Collection of documents/ books of accounts/ loose
  papers and seeking explanation.
• Recording statement.
• Restraint on locker/ Almirah etc.

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INCOME TAX SEARCH U/S 132

• Seizure of Assets/Documents
• Undisclosed Assets
• Cash
• Jewellery
• Other valuables FDs/ Shares/ Securities/ KVPs/
  IVPs/ NSCs/ Hundies/ Title Deeds of properties.
• Books of accounts, documents, loose papers and
  electronic data.

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INCOME TAX SEARCH U/S 132

• Declaration of undisclosed income
• Why surrender?
• To avoid penalty
• To mitigate rigors of search.
• Penalty provisions.
• Penalty u/s 271(1)(c) for earlier years.
• Penalty u/s 271AAA for specified years.
• Manner of declaration of undisclosed income.
• Not for earlier years otherwise admitted
  concealment.
• For specified years- break up- nature/ manner of
  earning/ year wise/ person wise.

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INCOME TAX SEARCH U/S 132

• Post search proceedings.
• - Opening of restraints.
• - Recording statement- explaining
  documents.
• Retraction of statement.
• -Break up of surrendered income.
• -Third parties enquiries- surveys.
• -Letters for
• Appropriating cash seized
• Release of assets explained.
• Photocopy of documents
• Release of jewellery.

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INCOME TAX SEARCH U/S 132

• Appraisal report
• Finding of investigation- internal report to A.O.
• Decision of jurisdiction/ centralization.
• Reply to questionnaire.
• Records belonging to other persons- 153C
  proceedings.

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INCOME TAX SEARCH U/S 132

• Preparation prior to notice from A.O.
• Completion of details/ collection of evidences.
• Unrecorded documents- explanations- application
  of independent mind.
• Ledgerisation of individuals affairs.
• Illegal search- writ to high court- evidentiary
  value of documents seized.

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INCOME TAX SEARCH U/S 132

• Assessment proceedings before A.O.
• Notice for filing returns u/s 153A.
• Obtaining photocopies, if not received earlier.
• Filing of returns for six years.
• All other assessment proceedings to abate.
• Normal assessment proceedings- completion of
  assessment of six years and search year.
• Approval by Joint Commissioner

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INCOME TAX SEARCH U/S 132

• 153A Assessments - issues emerging
• Earlier years in appeal- parallel proceedings to
  continue.
• Fresh assessment of disclosed income without any
  new information- whether constitutionally valid.
• Interest u/s 234A for late filing of return.
• Cash seized- whether adjustable as advance tax.

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INCOME TAX SEARCH U/S 132

• Notice u/s 153C- issues emerging.
• Books of accounts/ documents belonging to other
  persons.
• Recording of satisfaction and handing over
  records to other A.O.
• Time limit for issuing notice.
• Document of one year still assessment of seven
  years.
• Abatement of other assessment proceedings.

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THANK YOU