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Income Tax Act: Difference between a “Raid” and a “Survey”

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Income tax laws in India provide for various provisions to ensure tax compliance by taxpayers. Two such provisions are “search and seizure” (commonly referred to as a raid) under Section 132 of the Income Tax Act and “survey” under Section 133A of the Income Tax Act. While both these provisions are used by the Income Tax Department to gather information and evidence about tax evasion, there are significant differences between them. In this blog post, we will explore the key differences between the “search and seizure” under Section 132 and “survey” under Section 133A of the Income Tax Act.

Search Proceedings under Section 132 of the Income Tax Act:

An income tax raid, also known as “search and seizure” operations, is carried out by the Income Tax Department when they have reason to believe that a person or a group of persons is in possession of undisclosed income or assets.

A “search” can be conducted on the premises of the taxpayer, including their home, office, business premises, and other places where they may have stored undisclosed assets. A “search” can be conducted only after the approval of an authorized official (the Principal Director General or Director General or Principal Director or Director or the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner) of Income Tax.

During a “search”, the authorities can seize any documents, books of accounts, cash, jewellery, or other valuables that they believe to be undisclosed income or assets. However, the valuables which are part of the stock-in-trade of the business can not be seized but the authorised officer can make a note or inventory of such stock-in-trade of the business.

Survey under Section 133A of the Income Tax Act:

“Survey” under Section 133A of the Income Tax Act is a less invasive procedure than “search and seizure” proceedings. It is carried out by the Income Tax Department to gather information about the taxpayer’s business operations and assets.

A “survey” can be conducted on the premises of the taxpayer only during the business hours. During a “survey”, tax authorities can verify books of account, documents, stock, and place identification marks, but cannot seize any of them.

Key Differences between Search and Survey

1. Purpose: The purpose of “search” proceedings is to detect undisclosed income or assets, while the purpose of a “survey” is to gather information about the taxpayer’s business operations and assets.
2. Approval: “Search” proceedings can only be conducted after the approval of the Director or Commissioner level officials of the Income Tax department, while a “survey” can be conducted by any authorized officer including an Assessing Officer of the Income Tax Department.
3. Power to seize: During “search” proceedings, the authorities have the power to seize any documents, books of account, cash, jewellery, or other valuables that they believe to be undisclosed income or assets. During a “survey”, the authorities do not have the power to seize any documents or assets but they can take copies or can place marks of identification.
4. Scope: The scope of a “search” is wider as it can be conducted on all premises where the taxpayer may have undisclosed assets. The scope of a “survey” is limited to the premises of the taxpayer.
5. Time: An income tax ”search” can be conducted at any time, including outside of normal business hours, while a “survey” can only be conducted during business hours and in case of individuals, only during daytime.

Concluding Remarks

“Search and Seizure” under Section 132 of the Income Tax Act and “Survey” under Section 133A of the Income Tax Act are two important tools used by the Income Tax Department to ensure tax compliance by taxpayers. While both are used to gather information and evidence about tax evasion, they have significant differences in terms of their purpose, approval, power to seize, and scope.

It is important for taxpayers to be aware of these differences to ensure compliance with the Income Tax Act and avoid any legal consequences. Taxpayers must also be aware of their rights and obligations during an income tax raid or survey, and to seek professional advice if they have any doubts or concerns.