Income Tax Raid – Rules & Regulations
Income Tax Raid – Rules & Regulations
The rules and regulations pertaining to income tax raid or search and seizure by the Income Tax Department was first framed by provisions related to search and seizure made in the Income Tax Act, 1956. In this article, we review the concept of search and seizure according to the Income Tax Act, 1961.
Officers Authorised to Issue Order for Search & Seizure
The following officers of the income tax department are authorised to issue order for search and seizure under the Income Tax Act.
- The Director of Income Tax
- The Chief Commissioner of Income Tax
- The Commissioner of Income Tax
- Any such Joint Director or Joint Commissioner of Income Tax as may be empowered by the Board.
The Director General or Director or the Chief Commissioner or Commissioner or Joint Commissioner or Joint Director who have been authorized by the Board can authorize any officer subordinate to him not below the rank of Income Tax Officer to perform a search. The officer so authorized is referred as Authorized Officer and the authorization is done by offering a search warrant in Form 45.
When Income Tax Raid can be Conducted
Under the Income Tax Act, an income tax raid can be conducted when the Officer has in his/her possession any information through which he has motive to believe that:
- A person to whom a summon with reference to Section 131(1) or a notice with reference to Section 142(1) has been served to produce books of accounts or other documents has been unsuccessful or omitted to produce or cause to be produced the said books of accounts or additional documents;
- A person to whom a summon is issued with reference to Section 131(1) or a notice with reference to Section 142(1) has been or may be issued is not possible to produce or caused to be produced any books of account or other document that will be useful for or related to any proceedings under the Act;
- A person is in control of money, bullion, jewellery or other valuable article or thing and such property represents totally or partly income or property that has not been disclosed or will not be disclosed.
Hence, an Authorised Officer would have sufficient cause to conduct a search if a person has not properly produced book of accounts with response to notices or / summons and/or the Officer has probably cause to believe the person is in possession of undisclosed income or property.
Powers of the Authorised Officer While Conducting Search
The following are the powers given to an Authorised Officer while conducting a search and seizure operation:
- Enter plus search any building, place, vessel, vehicle or aircraft where he has motive to suspect that such books of accounts, other documents, money, bullion, jewellery or other valuable article or thing are reserved.
- Break open the lock of any door, box, locker, safe, almirah or other receptacle for exercising the powers conferred by clause (i) above where the keys thereof are not accessible.
- Search any person who (a) has got out of, or (b) is about to get into, or (c) is in the building, place, vessel, vehicle or aircraft, if the sanctioned officer has reason to suspect that such person has secreted about his person any such books of account, other documents, money, bullion, jewellery or other precious article or thing.
- Necessitate any person who is established to be in possession or control of any books of account or other documents maintained in the form of electronic records, to afford the compulsory facility to the authorized officer to examine all such books of account or other documents.
- Seize any such books of account, other documents, money, bullion, jewellery or other precious article or thing found as a result of such search. Nevertheless, , the authorized officer will have no powers to seize any bullion, jewellery or other precious article or thing being stock-in-trade of the business encountered as a result of search. He will make a note or inventory of such stock-in- trade of business.
- Place marks of identification on any books of account or other documents or make or reason to be made extracts or copies there from.
- Make a note or an inventory of any such money, bullion, jewellery or other precious article or thing.