Your Rights as Assessee During Conduct of Income Tax Search

vimalpunamiyaBy CA Vimal Punamiya

Accommodation Times News Services

Q. 1 What remedy does the assessee have in case of misbehavior of the officers?
Ans. Misbehavior may lead to some injury, damage or harm
to the interest of the assessee or his reputation or it may only hurt
his feelings and sentiments, religious or otherwise, Depending
on facts, the action will lie by way of challenge of the proceedings
under article 226 if the search is done in an irregular and illegal
manner. If it is a case of misbehaviour leading to hurt of sentiments
and feelings, the best course would be to lodge a complaint with
the Director or Commissioner concerned or with the Director
General or Chief Commissioner concerned or with the Member
(Investigation), In extreme cases, the action may lie in TORTS.
There, of course, it will have to be established that it was covered
by the immunity of sovereign act.
Q. 2 What remedies’ does the assessee have where during
search the assets are destroyed like sofas and beds’ are torn,
floor is dug and walls are broken?
Ans.No remcdy lies against such actions if they are done bona
fide and in good faith in carrying out the object of the search.
Action may lie only if these acts are done mala fide and there
was no reason to suspect that items broken or destroyed contained
any concealed income or assets hidden therein. Neither on the
basis of information received from the informer, nor from any
other source.
Q. 3 Can the assessee contract superior officer when search
is in progress to explain the difficulties being faced?
Ans.Yes, but the superior may not interfere with the judicial
discretion of the authorised officer, He may take administrative
action and such corrective measures as may relieve the assessee
of avoidable harassment and to make the search operation less
painful.

Q. 4 Whether can a legal advisor be present? if, yes, he do
when search is in progress?
Ans.Yes, he can be present. :
Q. 5 What remedy is available to a person whose cash has
been seized from the possession of his employee who was
carrying it in connection with business?
Ans.Such a person should immediately lodge his claim before
the authorised officer who has seized the cash and produce
necessary evidence to explain the source. If the proceedings under
section 132(5) have already been commenced, he should lodge
his claim under section 132(7). In case he does not succeed there
also, he may file an appeal under section 132(11) before the
Commissioner.
Q. 6 What remedy lies with regard to seizure of cash whose
sources are also explained?
Ans.Efforts should first be made to prevent the seizure because
once the seizure is made, Department may like to pass an order.
If the cash is wrongly seized, or for that matter, any asset is
wrongly seized, the authorised officer should pass an order under
section 154 to release such an asset. Provisions of section 132(i)
empower seizure of only such assets, which represent fully or
partly undisclosed income. Therefore, seizure of any assets, which
does not satisfy the basic condition, involves an illegality in the
act of seizure, which should be corrected by the officer as if he
has committed mistake of fact and/or of law apparent from record.
Since this kind of seizure would be without jurisdiction, it will
be a fit case for filing a writ petition under article 226 of the
Constitution.
Q. 7 Can assessee ask for identity card of officers?
Ans.Yes. Sometimes the authorised officers or the person
accompanying them do not possess the identity card. As an
alternative, they should carry and produce some other documents
to prove their identity, e.g, a certificate attesting their signatures,
The certificate should be issued by a senior officer in charge of

the search or by an immediate superior. In a case where there is
no proof of identity, the assessee would be within his right to
refuse the ingress.
Q. 8 Can assessee ask for a copy of warrant?
Ans.No. Warrant of authorisation is meant and addressed to
the authoriscd officer and it has to be executed by him. It is an
instrument to arm him with the authority to search. After execution
of the warrant, it is to be returned to the issuing authority. The
assessee is, however, entitled to go through the warrant. In fact,
the authorised officer is duty bound to produce it and in evidence
of production thereof, he may obtain the signatures of the assessee
or his representative along with the signatures of two witnesses.
The assessee should inspect it carefully to see that: (a) it is
not blank; (b) irrelevant portions are struck off, etc. If these defects
are found, he should bring them on record by filing a letter before
the authorised officer. If the warrant is blank and the name and
address is not correctly recorded, he may as well not allow the
ingress. In case of other defects, question of challenging the
validity under article 226 may be considered.
Q. 9 Can the authorised officer refuse permission to the
assessee or any other person to be present on his behalf during
search?
Ans.No. Sub-rule (8) of rule 112 provides that the occupant
of the building, place, vessel, vehicle or aircraft which is searched,
as also the person in charge of such vessel, etc., or any other
person on his behalf, shall be pen-nitted to attend during the search
and a copy of seizure memo prepared under sub rule (7) shall be
delivered to the occupant or to such other person.
Q. 10 Can the authorised officer enter and search any
building belonging to the assesee once the warrant of
authorisation is issued against him?
Ans.No, he can enter and search only such building in relation
to which the warrant of authorisation is specifically issued.

Q. 11 Can the assessee call his relatives to assist him during
the course of search?
Ans.Yes, he can do so but the authorised officer may carry
out their personal search before allowing them entry. However,
he may order such persons who may be creating obstruction in
the proper and smooth conduct of the search, to leave the premises
or he may not grant the permission if he apprehends any
obstruction in the smooth conduct of the search proceedings.
Q. 12 Can an authorised officer prevent the assessee from
receiving or making telephone calls and telex messages?
Ans.No, unless he believes that such permission will defeat
the very object of the search and that the assessee may use his
messages to fabricate false evidence, remove the assets, or make
other manipulation.
Q. 13 Is it advisable to give answer to every question by
saying, ‘I do not remember because of the confused state of my
mind created due to the sudden raid’?
Ans.It is neither advisable nor in the interest of the assessee
to deliberately answer every question by repeating “I do not
remember” or “I do not know”. He may lose the opportunity of
explaining several items of assets, which he can otherwise do.
Besides, he may run the risk of prosecution in case on the basis
of contemporaneous evidence recovered subsequently during the
search it appears that the facts were within the knowledge of the
assessee, which he declined to disclose. It would be on the other
hand, advisable to take the help of the books of account and other
documents and give all possible information, which is readily
available. However, in genuine cases where it is not practicable
to remember certain facts with certainty or minute details of
transactions particularly those of several past years, the assessee
may only explain their nature, if possible and add that he would
be able to furnish the details and explanations after looking into
record. A statement made on the spot in support of his explanation
has greater evidentiary value.

Q. 14 What remedy is available to a genuine depositor of
the money when the search takes place against a person with
whom the deposit is made, e.g., with a car dealer with whom
initial deposit of money is made for booking the car or with a
moneylender with whom the ornament or jewellery may be
pawned as security for loan?
Ans.Proceedings with the presumption that the deposit is
genuine and the assessee against whom the search proceedings
are taken, is able to establish its genuiness during the course of
the search itself, any seizure or restraint of the deposit would be
ab initio void, It is also well settled that even the restraint under
section 132(3) can be made only after the authorised officer is
satisfied that the asset, in question, wholly or partly, is concealed
income or wealth.
Therefore, any seizure of a genuine or disclosed amount will
be ‘without jurisdiction and, in any case, illegal. Therefore, the
assessee and/or the depositor can always approach the authorised
officer either during the course of search itself with the necessary
evidence and claim that no seizure is called for or they can
approach the authorised officer even after seizure; but within 15
days of the time limit prescribed under section 132(9A) to release
the amount wrongly seizcd by rectifying the order of seizure under
section 154. Release should be made in the presence of two
witnesses.
If the time limit of 15 days has expired and the seized assets
have been handed over to the Assessing Officer, the assessee and/
or the depositor can file writ under Article 226 on the ground
that the seizure was without jurisdiction or, in any case, illegal,
and that no further proceedings under section 132(5) can be taken
in respect of such assets. The depositor can also approach the
Assessing Officer during the course of proceedings under section
132(5) as a “concerned person”, and put his claim for release of
the amount or at best, to proceed against him under section 132(7).
If he does not succeed there, he can file an appeal before the
Commissioner, where he will be entitled to raise all the grounds,

including the question of validity of the search and seizure and
claim the release of the assets.
Answer to present question should not be mixed with the
answer to the earlier question wherein it is said that no disclosure
can be made by a third party during the course of search. The
distinguishing factor is that while in the present question, the
seizure being of disclosed asset itself is illegal and without
jurisdiction, in the earlier question the seizure is valid and the
question is as to who can make the disclosure and in which
proceedings?
Q. 15 Can the assessee be arrested during the course of
search?
Ans.No, the authorised officer does not have the power to
arrest an assessee for an offence under the Income-tax Act or
other Direct Tax Laws while acting under section 132. However,
in case of offences like destruction of documents, attack on the
search party, an authorised officer can lodge a complaint with
the police and the appropriate police authority may take
congnizance of the offence and order an arrest.





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