1. SURVEY U/S 133 A OF THE INCOME TAX ACT, 1961 ASHWANI KUMAR F.C.A.

2. MEANING   TO COLLECT INFORMATION AND DATA FOR THE PURPOSE OF THE ACT ON THE SPOT, AT THE PLACE OF BUSINESS OR PROFESSION OF THE ASSESSEE.

3. PURPOSE & OBJECT OF SURVEY Make a surprise visit to the place of business/profession Personally Inspect books of account and/or other documents Verify stocks, cash and other valuable articles Impound relevant books of accounts and/or documents. Collect information about evasion of Taxes. Bring new assessees on record. Verify whether books of accounts are being maintained contemporaneously.

4. TYPES OF SURVEY Internal Survey Survey in connection with functions, ceremonies, events etc. External General Survey (Door to Door Survey) of business premises External (Specific) Survey of business premises Survey to check compliance with TDS provisions. Recovery Survey

5. Commissioner of Income Tax Commissioner of Income Tax Joint Commissioner of Income Tax Joint Commissioner of Income Tax Director of Income Tax Director of Income Tax Joint Director of Income Tax Joint Director of Income Tax Assistant Director of Income Tax Assistant Director of Income Tax Deputy Director of Income Tax Deputy Director of Income Tax Assessing Officer Assessing Officer Tax Recovery Officer Tax Recovery Officer Inspector of Income Tax (subject to proper authority but only with limited powers ) Inspector of Income Tax (subject to proper authority but only with limited powers ) AUTHORITIES COMPETENT TO CONDUCT SURVEY

6. POWERS OF THE AUTHORITIES DURING SURVEY Enter place of business during business but only after sunrise and before sunset Enter place of business during business but only after sunrise and before sunset Enter place other than business premises if assessee states that cash, stock, etc., are lying there Enter place other than business premises if assessee states that cash, stock, etc., are lying there Place marks of identification on books of account Place marks of identification on books of account Take extracts from books of accounts and documents Take extracts from books of accounts and documents Impound books of accounts after recording reasons Impound books of accounts after recording reasons Make an inventory of cash, stocks and other valuables Make an inventory of cash, stocks and other valuables Record statement of any person Record statement of any person Collect information regarding nature and quantum of expenditure on personal functions and events Collect information regarding nature and quantum of expenditure on personal functions and events Discovery and production of evidence etc. when there is non-cooperation on the part of the Assessee Discovery and production of evidence etc. when there is non-cooperation on the part of the Assessee

7. TDS SURVEY Authority having jurisdiction as to the Tax deduction at source matters, has the power to conduct survey Authority having jurisdiction as to the Tax deduction at source matters, has the power to conduct survey Cash, bank accounts,stocks and other valuables cannot be verified/seized during TDS survey Cash, bank accounts,stocks and other valuables cannot be verified/seized during TDS survey

8. SURVEY IN CONNECTION WITH FUNCTIONS U/S 133A(5) To collect information about the nature and scale of expenditure incurred in any ceremony or other events Information can be collected from various sources including third parties and external agencies. Action can be taken only after the function is over and not during the function Video recording of the function is not permissible

9. SPECIFIC SURVEY ON BUSINESS PREMISES Can be carried out at any place where business or profession is carried on i.e., Head Office, Branches, Godowns etc. Can be carried out at any place where business or profession is carried on i.e., Head Office, Branches, Godowns etc. Authorized Officer can enter only if premises are open and only during business hours Authorized Officer can enter only if premises are open and only during business hours

10. IMPLICATIONS OF FINDINGS OF SURVEY Stock found Stock found  Excess  Short Cash found Cash found  Excess  Short Discovery of Undisclosed Turnover 90 ITR 271 (SC) Commissioner of Sales Tax Vs. Esufali Discovery of Undisclosed Turnover 90 ITR 271 (SC) Commissioner of Sales Tax Vs. Esufali

11. POWER TO IMPOUND BOOKS OF ACCOUNTS I.T. authorities empowered to impound and retain books of accounts/other documents inspected during survey I.T. authorities empowered to impound and retain books of accounts/other documents inspected during survey Power to be exercised after recording reasons for doing so Power to be exercised after recording reasons for doing so Approval of the Chief Commissioner of Income Tax/ Director General of Income Tax required for retaining books/documents for more than ten working days Approval of the Chief Commissioner of Income Tax/ Director General of Income Tax required for retaining books/documents for more than ten working days Assessee can ask for copies of impounded records at the time of survey or even subsequently Assessee can ask for copies of impounded records at the time of survey or even subsequently

12. CAN A COMPUTER BE IMPOUNDED ? Computer outside definition of Books or Books of Accounts u/s 2(12A) Computer outside definition of Books or Books of Accounts u/s 2(12A) Surveying authority can only insist for copy data on Computer disc, floppy or print out. Surveying authority can only insist for copy data on Computer disc, floppy or print out. Provisions of Information Technology Act, 2000 Provisions of Information Technology Act, 2000  Section 43 provides for penalty for accessing, tampering etc, of a computer without proper authority  Section 81 provides that the said Act has overriding effect over all other Acts

13. SEIZURE Sub section (4) of section 133A does not empower the authority to seize any article and/or asset found during survey

14. RECORDING OF STATEMENTS Statement of the person surveyed should be recorded under oath and in a language which the person understands Statement of the person surveyed should be recorded under oath and in a language which the person understands Instructions of CBDT for extracting confessions to be followed Instructions of CBDT for extracting confessions to be followed Confession as to the Undisclosed Income should be voluntary and based on reliable evidence Confession as to the Undisclosed Income should be voluntary and based on reliable evidence Assistance of Tax Consultants during the survey Assistance of Tax Consultants during the survey

15. STATEMENT ELICITED DURING SURVEY OPERATION HAS NO EVIDENTIARY VALUE.... CIT vs. S. KHADER KHAN SON 352 ITR 480 (SC) PAUL MATHEWS & SONS vs. CIT 263 ITR 101 (KER) ASHOK MANILAL THAKKAR Vs. ACIT 279 ITR (AT) 143 (AHD)

16. RETRACTION OF THE STATEMENT Retraction is permissible subject to certain conditions and should be made as early as possible without delay Retraction is permissible subject to certain conditions and should be made as early as possible without delay Sec. 94 of the Evidence Act provides that a presumption can be rebutted by proving that admission or confession was caused by inducement, threat or promise. Sec. 94 of the Evidence Act provides that a presumption can be rebutted by proving that admission or confession was caused by inducement, threat or promise. Burden to prove that the admission made is untrue lies on the party who made the admission Burden to prove that the admission made is untrue lies on the party who made the admission  Pullangode Rubber Produce Co. Ltd. vs. State of Kerala 91ITR 18 (SC)  Sarwan Singh Rattan Singh vs. State of Punjab AIR 1957 SC 637  Krishan Lal Shiv Chand Rai vs. CIT 88 ITR 293 (Pb. & Har)  Karam Chand vs. ACIT 73 ITD 434 (Chandigarh)

17. PENALTIES & PROSECUTION Penalty leviable u/s 272A for failure to answer questions, sign statements and furnish information, returns or statements Penalty leviable u/s 272A for failure to answer questions, sign statements and furnish information, returns or statements Excess Stock found in survey could not lead to presumption u/s 276C calling for prosecution 203 ITR 866 (Pb. & Har.) ITO vs. Mohinder Pal Excess Stock found in survey could not lead to presumption u/s 276C calling for prosecution 203 ITR 866 (Pb. & Har.) ITO vs. Mohinder Pal Penalty leviable u/s 272AA for failure to Comply with S. 133B Penalty leviable u/s 272AA for failure to Comply with S. 133B Penalty for Concealment of Income leviable in Assessment Proceedings for existing Assessees Penalty for Concealment of Income leviable in Assessment Proceedings for existing Assessees

18. ALLIED REVENUE LAWS There are internal administrative instructions that the income tax authorities should inform the other enforcement agencies whenever evidence of law breaking is discovered during the course of a survey

19. DO’S FOR THE TAX AUTHORITIES To disclose the purpose and to commence survey of the business premises, without disturbing the ongoing business and without dislocating the normal business To disclose the purpose and to commence survey of the business premises, without disturbing the ongoing business and without dislocating the normal business To provide copy of inventories of cash, stock and other valuable articles or things, books of account and documents found in the course of the survey To provide copy of inventories of cash, stock and other valuable articles or things, books of account and documents found in the course of the survey To keep, maintain and preserve all the inventories copies of the documents and books of account To keep, maintain and preserve all the inventories copies of the documents and books of account To prepare a report containing details of survey and findings on the material found in the course of the survey To prepare a report containing details of survey and findings on the material found in the course of the survey

20. DON’TS FOR TAX AUTHORITIES To remove, take in possession or seize cash, stock in trade and other valuable articles found in the course of the survey To pressurize the tax payer to surrender any specific amount To issue any summon u/s 131(3) of the Act without recording reasons therefor

21. OBLIGATIONS OF AN ASSESSEE To assist in preparing inventory of various items To give statements truthfully and completely, accurately,correctly and unambiguously To sign the inventories and statements after carefully reading, vouching its correctness and obtaining its copies

22. AFTER SURVEY Remedies available to the assessee Assessment procedure Settlement Commission

23. GENERAL ISSUES Relevancy of material found in the course of the survey for making assessment Presumptions about tax returns filed after survey Effect of an illegal survey Assessments completed u/s 143(3) for earlier years can be re - opened No need for pendency of proceedings for conducting survey Survey can also be conducted on a person who is not an existing tax-payer

24. ISSUES FOR DISCUSSION Whether the authorities have powers to break any door, lock or window to gain entry Can the business premises be sealed during survey - Shyam Jewellers vs. CIT 196 ITR P. 243 (All) Can survey be converted into search ? A Survey u/s 133A can be converted into a search u/s 132 if the conditions of that section are satisfied – Vinod Goel & Others vs. UOI and others 252 ITR 29 [P&H] Implications of Sec. 269SS, Sec. 40A(3) Implication of deductions under Chapter VI A

25. THANK YOU