Raids and surveys carried out by income-tax (I-T) officials cause anxiety among several tax payers. While ordinary citizens may think both these terms have the same meaning, they have different implications under the Income-Tax Act. There are specific provisions related to the area of survey and what the tax authorities can do while undertaking such a survey. This ensures that there are restrictions on the extent of action that can be taken by the parties while a survey is being conducted.
Under a survey, the specified I-T officers such as commissioner, joint commissioner can enter premises which are within the limits of the area given to them, or there are specific persons over whom the officer has jurisdiction. No notice needs to be given to the person when the tax authorities enter a particular premise. The purpose of a survey is to inspect the necessary books and documents, as well as verify the cash stock and other details.
There are certain guidelines about when the tax authorities can enter this premise - they can do so only when the place is open for business. In certain other cases, they can enter the premise after sunrise and before sunset.
However, there are no guidelines related to their exit; hence, after entering a premise , the I-T officials can stay till their work is over.
While conducting a survey, the tax authorities can place identification marks on various books and documents that have been examined by them.
They can also make copies of the same. If the need arises, the tax authorities can impound the books of accounts and other documents, they can take these documents and other details into their custody, after recording the reasons for such an action in writing.
Further, specific permission has to be obtained in case the books and documents are kept for a period of more than 10 working days.
The tax authorities can also make an inventory of the various items and record the statement of any person that may be useful or relevant for their work.
There are separate guidelines with respect to the various expenses that are made. Whenever an expense is incurred with respect to a function, ceremony or an event, the tax authorities can bring this within their ambit. After the event or function is over, they may ask the person who is likely to possess the necessary details about the expenses to furnish the details they require, after which, the statement can be used as evidence.
However, tax authorities have to face certain restrictions too. They cannot remove any cash, stock or other valuable articles from the premises. Once individuals are aware of the various permissions and restrictions, theyll be able to tackle the situation in case of a survey.