Assessment & Scrutiny Services

“Search and Seizure”, the origin of these provisions will in a few years celebrate its golden jubilee. It was since 1956 that the provisions of search and seizure made its first entry into the Income Tax Act. Section 132 was totally substituted by the Finance Act, 1964. The power of search & seizure is a potent tool for the department to unearth unaccounted income. However, to mitigate the possibility of its misuse by over-zealous officials, the law has incorporated several safeguards. The author, an eminent advocate with rich experience in the subject, has explained the entire law in a succinct manner. His check list will ensure that the department and the taxpayers are always on the right side of the law.

Who is the authorized officer to issue order for search and seizure?
  • The Director General of Income Tax, or
  • The Director of Income Tax, or
  • The Chief Commissioner of Income Tax, or
  • The Commissioner of Income Tax, or
  • 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 empowered by the Board can authorize any officer subordinate to him not below the rank of Income Tax Officer to conduct search. The officer so authorized is referred as Authorized officer and the authorization is done by issuing a search warrant in Form 45.

The Objective

As per the section 132, a search and seizure action can be undertaken against any person is in possession of any money, bullion, jewellery or other valuable article or thing and such money, bullion, jewellery or other valuable article or thing represents either wholly or partly income or property which has not been disclosed or would not be disclosed for the purpose of this Act (i.e to unearth undisclosed income or property).

The search and seizure action can also be taken when there is failure to produce books of accounts, documents etc. in respect of summons issued or notice issued under section 143(2).

The assessment and appeals procedure under the Act involves the following:

Self-assessment

Every assessee, before submitting a tax return, is required to make a self-assessment of income, and after taking into account the amount of tax already paid by way of TDS and advance tax, pays the balance tax (self-assessment tax) due on the income. Further, along with the tax, any interest arising on account of delay in furnishing of tax return or any default /deferment in payment of advance tax, is also required to be paid.