SURVEY UNDER SECTION
133 A OF INCOME TAX ACT 1961

 

Survey in a wider sense means to scrutinize or to inspect.
The power of survey under the Income tax Act has been provided U/S 133A and
133B. The provisions contained in section 133A are independent and to the
exclusion of the other provisons of the act since the wording of the section
starts with ‘Notwithstanding anything contained in any other provisions of the
act ‘

 

The power of survey
can be exercised by the following U/A 133A:

1. A Commissioner

2. A Joint Commissioner

3. A Director

4. A Joint Director

5. An Assistant Joint Director

6. A Deputy Director

7. An Assessing officer

8. A Tax Recovery officer

9. An Inspector of Income Tax

 

An Income Tax
authority is empowered under section 133A to:

 

enter any place within the limits assigned to him or

 

the place occupied by any person in respect of which he
exercises jurisdiction or

 

the place in respect of which he is authorized by such an
income tax authority, who is assigned the area in which such place is situated
or who exercises the jurisdiction in respect of any person occupying such
place.

 

  Survey u/s 133A can be conducted only at the business premises of the
person concerned. No survey can
be conducted at the residential premises unless the residential premises are
shown to as the business premises by the assessee concerned. Moreover if the
assessee has stated that any stock or books of accounts or cash related to
business is kept at his residential premises survey proceedings can also be
extended to such residential place. Its not necessary that the survey is only
conducted at the principal place of business, it can be conducted
simultaneously to all branches of business premises concerned.

 

  Since the power of
Survey is limited to the business premises only therefore the survey can be
conducted only during business hours i.e after sunrise and before sunset.
However the survey proceedings started before sunset can be continued till
after sunset. Survey proceedings can not be initiated on holidays festive days
when the business premises are closed.  

 

 The question arises
wheather the premises of a Tax advocate or Chartered accountant  can be inspected for the purpose of survey
proceedings of the assessee. It is submitted that the Tax professionals stands
in a fiduciary relationship with their clients. In view of explanation to
section 133A(1) if the assessee states that his books of accounts or any part
of cash, stock or valuable articles are kept at any other place then the income
tax authority can survey that place but that too only for limited purpose for
obtaining information related to the assessee.. Thus if the assessee states
that his books of accounts are kept at the tax professional premises then the
premises of the tax professional can also be inspected but only for the limited
purpose for obtaining information regarding the assessee concerned.

 

     The Income Tax authority can verify stock,
cash, other valuable articles, books of accounts and documents lying in the business premises of the assessee.
The income Tax authority can also place marks of identification on books of
accounts or other documents and can take copies therefrom. However no seizure
of cash stock or valuable articles can be made during the cource of survey. But
the income tax authority can impound books of accounts after recording the
reasons for the same. The impounded books of accounts can be kept only for 10
days after which he has to get approval of the chief commissioner.The
statements of the persons working in the business premises can also be recorded
during the cource of survey.

 

      It is generally seen that the survey party
always try to record a confessional
statement of the assessee so that income can be made surrunderred. But such
a statement recorded under pressure can be retracted and the assessee can file
a declaration to that effect afterwards. Since the statement recorded U/S
133A(3)(iii) is not recorded on oath it doesnot have evidentiary value. 

 

  Certain following things should be kept in mind before making any
confessional statement:

 

 Whether any evidence
has been found or will be found at a later stage regarding concealment of
income

 

The provisions of section 40-A(3), 269SS, 269T etc should be
kept in mind before making any confession.

 

If the income surrendered relates to current year  then it would be liable to interest only as
no concealment of current year’s income can be established since no return is
being filed for the current year. But if the income surrundered is declared as
the income of previous years regarding which the return has already been filed
it may attract  penalty proceedings since
it would amount to concealment of income.

 

If there is any difference between the value of stock
recorded by the income tax authority and the value of stock recorded in books
of accounts and wheather such difference is explanable

 

The last and most
important thing is that one should not panic when survey party enters the
business premises. One thing should be kept in mind that the income tax
authorities donot have any personal grudges against the assesses. The
authorities do their work and they should be cooperated. The presense of a tax
professional can be of great help to both the assessee and the authorities Non
cooperation with the survey party may result in adverse. Whereas the
cooperation with the authorities might result in wining leneant behaviour from
the taxman.