Do’s and Don’ts During an Income Tax Raid!

financial-friday

 

 

With less than 10 days to go before the September 30 deadline of the Income Declaration Scheme 2016 , small businesses and roadside eateries-—many of which have never seen an IT officer before  are the latest to feel the heat of so called income tax Survey which is popularly known as “ RAID”.

After the above incidences it is quite clear that income tax Department is looking forward to each and every individual, firm or company to disclose their Unaccounted Money and for which they can conduct there Raids (Surveys) at any suspicious place.

Therefore here are some Do’ s and Don’ts that can come to help even for a growing start-up as well as an established company.

Certain Things to remember during a Raid:

1) A raid can only start between Sunrise and sunset.

2) If there are kids they are allowed to go toh school (However there bags can be checked)

3) The authorized officer cannot seize stock in trade of a business. However, restriction on seizure of stock in trade applies only to valuables and not cash.

4) Power to arrest assesses is not entrusted to the department.

5) The department cannot withdraw cash from bank a/c or en-cash fixed deposits without assessment as a result of search operations.

6) Section 133A does not permit sealing of business premises.

7) It has been instructed by CBDT that while recording statement during the course of search and seizures and survey operations, no attempt should be made to obtain confession as to the undisclosed income. It has been advised that there should be focus and concentration on collection of evidence for undisclosed income.

Assets which cannot be seized –

1. Immovable assets

2.  Stock held in business

3. Assets disclosed in Income Tax and Wealth Tax returns

4. Assets appearing in books of account

5. Cash for which explanation can be given

6. Jewelry mentioned in wealth tax return

7. Gold up to 500 gm per married lady, 250 gm per unmarried woman and 100 gm per male member of the family.

8. Jewelry as per the status of the family if so appear to the investigating officer.

 Do’s:

  1. Read the Search warrant, make sure name is right, if not they can’t raid you. If the search warrant contains error there won’t be any raid.
  2. Ask them to show some identifications, as many strangers get into your house, is not a good sign.
  3. Call your lawyer, CA, CS, Manager, Accountant, etc.
  4. Make a list of things that they are listing.
  5. Make note of any damages caused by the team, and ask them to sign it as they leave
  6. Only talk to the officer in-charge there.
  7. Accept any order from the officer, don’t remove items which they can’t carry out.
  8. Get the documents and items with-in 30 days from the raid, i.e. after the assessment.

Don’ts':

  1. Not allowing to enter the premises, due to this courtesy runs out miles away, and the person raided will be scrutinized severely.
  2. Don’t panic.
  3. Don’t call your lawyer, CA, CS, Manager, Accountant, etc.
  4. Don’t even think of bribing them.
  5. The person can’t make calls, to anybody.
  6. Don’t get physical with them, I mean by violence, even nudging them will be inviting trouble.
  7. People who were present in the raid, won’t be allowed to leave, until the work is done.

Save yourself from a such situations. Keep up with #FinancialFriday to know more!

Write a Reply or Comment

Your email address will not be published.