SURVEY U/s.133A Legal & Practical Aspects. By Team SMR. Legal Aspects. 2. Objectives of survey u/s.133A. It is conducted to find out whether a- regular books of account (BOA)are maintained b- correct entries or made in BOA c- cash and stock tally with entries in BOA
It is conducted to find out whether
a- regular books of account (BOA)are maintained
b- correct entries or made in BOA
c- cash and stock tally with entries in BOA
d- are there any documents indicating unaccounted purchases and sales,etc.
e- there exist other valuable article/things not disclosed
Director /Commissioner of Income-tax
Joint Director/ Joint commissioner
Deputy / Asstt. Director / Deputy / Asstt. Commissioner (on authorized by -2)
Assessing Officer (on authorized by -2)
Tax Recovery Officer (authorized by -2)
Inspector of Income Tax (For certain purposes only) (on authorized by -2)
(later on referred as Income-tax Authority- ITA)
U/s. 133A an ITA may enter :
(a) Any place, falling in his territorial jurisdiction;
(b) Any place, occupied by any person falling in
his territorial jurisdiction;
(c) Any place, in respect of which he is authorized for survey by such ITA, who is having jurisdiction in the above manner;
at which a business or profession is carried on, may or may not be the principal place of business
(d Any other place
Under explanation to section 133A, any other place stated by the person carrying on the business, where the books of accounts, other documents, cash, stock, etc. are kept can also be surveyed.
ITA is empowered to
ITA is precluded
The ITA shall not remove any cash, stock or any other valuable article or thing from the place of survey.
The Income tax authority shall have all powers u/s 131(1) to enforce compliance.
(Unitex Products Ltd. Vs. ITO (2008) 23 SOT 429 (Mum)
Section 292C mandates presumption regarding ownership of the assets, documents and books found in possession or control of any person in the course of a search or survey operation as belonging to him, their contents are true, they are in his handwriting and if executed and attested, it was done by him.
Due to assessee’s failure to rebut the presumption addition made u/s 69 was confirmed Surendra M. Khandhar vs ACIT & Ors. (2009) 224 CTR (Bom)409-
Keep books of accounts at any place other than Registered Office.
Share common premises- if unavoidable keep a map.
Keep personal documents of workers in business premises.
Do backdating and editing in books of Accounts.
Keep items attracting criminal action under other laws.
Keep items affecting moral dignity.
Insist on choice of language if not comfortable with English.
Is there any reason for surrender of additional income and whether it could lead to any inference of concealment ?
Are there any discrepancies between the stock, cash found on physical verification and that as per books?
Is it advisable to admit the discrepancies ?
Keep the provisions of Sales tax and Excise duty, ST, IT Act in mind while making surrender?
Is it safer to disclose income under the head "other sources" or “business” ? State cate-gorically the nature of income
Would it be possible to declare the entire amount as current year’s income or spread over income for many years?
What’s the liability of interest and penalty for concealment ?
Whether a survey would result in reopening of assessments of earlier years?
Arrange and set your records, stock, etc. in regular order, to assess importance of impounded things
Apply for copy of inventory, statements, etc. drawn
Meticulously check working, totals, read statements
In case of inconsistencies immediately inform the ITA
Separately offer the surrendered amount to tax in the ReturnPost Survey Watch over
No specific form - Affidavit, letter, etc. to assess importance of impounded things
Earliest Opportunity – minimum time gap
Reasons for retraction like knowledge of incorrect facts
Circumstances leading to retraction must be specified like inducement/ threat/ coercion, etc. with evidence
Documents/ Evidence in support of retraction
Information to higher tax authorities like CBDT, CCIT, CIT, JCIT, etc.
Appropriate note/ disclosure in the return of incomeRetraction – How, when, etc.
Mock Survey to assess importance of impounded things
By independent third party, preferably professionals/ consultants
Suddenly and without prior information
Across all business premises
Educate client and its staff
About basic provisions;
Rights and DutiesPREPAREDNESS AND PRECAUTIONS
Whether TDS survey possible? to assess importance of impounded things: Yes : Reckitt and Colman of India Ltd. vs. ACIT  251 ITR 306 (Cal).
Whether TDS survey at a place other than the place of regular assessment is possible? Yes : Peerless General Finance & Invesment Co. Ltd. v. AO 248 ITR 113 (All).
Whether a Survey Can Be Converted Into Search? There is no bar on initiating search proceedings during the course of survey and such action was confirmed in : VinodGoel & Others vs Union of India and others 252 ITR 029 (P&H)
Whether cross examination of the person giving statement during survey is possible? There is no provision for permitting cross examination RameshwarLal Mali v. CIT  256 ITR 536(Raj)
Whether confession made during survey is conclusive? No, it is not conclusive & it is open to establish otherwise by filing cogent evidences- ITO vs. Vijay Kumar Kesar (2010)231 CTR(CG)165; CIT vs. Dhingra Metal Works 236 CTR (Del) 621.
However Retraction made after two months and without contemporaneous evidence of agricultural income was rejected – Bachittar Singh v. CIT (2010) 236 CTR (P&H) 587.
Questions ??? and failed to offer the explanation due to non availability of concerned person leads to addition?
References : and failed to offer the explanation due to non availability of concerned person leads to addition?