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INCOME TAX SEARCH U/S 132

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. INCOME TAX SEARCH U/S 132. Highly rigorous process. Harshest weapon with Department. Invading privacy completely. INCOME TAX SEARCH U/S 132.

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INCOME TAX SEARCH U/S 132

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  1. 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

  2. INCOME TAX SEARCH U/S 132 Highly rigorous process. Harshest weapon with Department. Invading privacy completely. RAKESH RAJ & ASSOCIATES, Chartered Accountants

  3. INCOME TAX SEARCH U/S 132 • OBJECTIVE: -To collect evidences of undisclosed income/investment. -To seize undisclosed assets. -Deterrence effect RAKESH RAJ & ASSOCIATES, Chartered Accountants

  4. 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. RAKESH RAJ & ASSOCIATES, Chartered Accountants

  5. 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. RAKESH RAJ & ASSOCIATES, Chartered Accountants

  6. 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. RAKESH RAJ & ASSOCIATES, Chartered Accountants

  7. INCOME TAX SEARCH U/S 132 • Seizure of Assets/Documents: • Undisclosed Assets • Cash • Jewellery • Other valuables: FD’s/ Shares/ Securities/ KVPs/ IVPs/ NSCs/ Hundies/ Title Deeds of properties. • Books of accounts, documents, loose papers and electronic data. RAKESH RAJ & ASSOCIATES, Chartered Accountants

  8. 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. RAKESH RAJ & ASSOCIATES, Chartered Accountants

  9. 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. RAKESH RAJ & ASSOCIATES, Chartered Accountants

  10. 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. RAKESH RAJ & ASSOCIATES, Chartered Accountants

  11. 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. RAKESH RAJ & ASSOCIATES, Chartered Accountants

  12. 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 RAKESH RAJ & ASSOCIATES, Chartered Accountants

  13. 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. RAKESH RAJ & ASSOCIATES, Chartered Accountants

  14. 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. RAKESH RAJ & ASSOCIATES, Chartered Accountants

  15. THANK YOU RAKESH RAJ & ASSOCIATES, Chartered Accountants

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