CONDUCT OF SEARCH :”
Q. 1 What remedy does the assessee have in case of misbehaviour of the officers?
Ans. Misbehaviour 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 orassets 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 makethe 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 authorisedofficer 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 seniorofficer 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 authorisedofficer 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 authorisedofficer. 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 duringthe 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 ofthe 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 ofassets , which he can otherwise do. Besides, he may run the risk of prosecution in case on the basis of contemporaneous evidence recovered subsequently duringthe 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 orjewellery 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 authorisedofficer 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.
DUTIES OF ASSESSEE
QH. l Is the assessee expected to retain his bills for each item purchased?
Ans. No, neither that is required nor practicable, particularly in relation to items of smaller value. It is, however, essential that there should be adequate withdrawal to cover the acquisition of the articles during the year or over the years as the case may be. Even under the CCS (CCA) Rules, a Government servant is supposed to intimate acquisition of movable assets only if the value exceeds Rs. 5,000. However, in case of valuable articles and things, it is advisable to keep the bills.
QH. 2 What documents are necessary to be maintained in relation to the imported items?
Ans. If the imported items are brought by the assessee from abroad, he should maintain its purchase voucher as well as the customs receipt. In case of smaller items which are covered by the exemption limit or as may be prevalent at the relevant time, no such formality is necessary. However, if these items are gifted by the friends visiting from abroad, it may be necessary to keep the details of their visiting from abroad, it may be necessary to keep the details of their visits and a letter from them evidencing the fact of gift as well as the payment of the customs duty supported by the customs receipt unless they were minor items covered under exemption limit. In case the imported items are purchased from some other persons in India, it may be necessary to keep the customs duty receipt evidencing the payment made by the original purchaser and also in a letter or a sale memo evidencing the sale.
QH. 3 What evidence is needed to prove the wedding gifts?
Ans. Now under the Dowry Act, it is essential to prepare a list of gifts of various articles received at the time of marriage. This is to be signed by both the sides and copies are to be exchanged. If this is done, it would be an useful evidence in favour of the assessee. In other cases, one may follow the routine of maintaining a list, to the extent possible, showing names of donors, amounts or articles gifted. In the case of costly gifts, the donors may be examined as to their source, etc.
