CBDT Chief Allays Fears of Arbitrary I-T Searches Chandra says authorities will need to submit before HC ‘satisfaction note’ defending search
New Delhi: Income tax authorities will need to submit ‘satisfaction note’ before a high court on why a search was carried out, CBDT chairman Sushil Chandra has said, allaying fears that income-tax officers have been given arbitrary powers to conduct raids.
“There will be no arbitrary searches...no additional powers have been given for searches or seizure,” Chandra told ET, refuting reports that the budget proposal to allow I-T authorities to initiate a search without disclosing the “reason to believe” will lead to more intrusive tax administration.
A proper procedure including permission from principal director general has been laid out for a search and no junior officer has powers to conduct one on his own, he said.
Satisfaction note prepared for the search is shown in the court and it is provided to the court whenever it seeks it in a sealed cover, Chandra said. The note provides the justification for the search, including evidence to support the conclusions. He said this has been the practice. note for pre sea pare pro rch d vide cou rt dto itis whe sou nev ght er
need not disclose “reason to believe” to initiate a search
CBDT, or Central Board of Direct Taxes, is the policy-making body of the country’s income-tax department.
The budget for 2017-18 has proposed that the I-T authority need not disclose the “reason to believe” to initiate a search to any person or any authority or the Appellate Tribunal, leading to some apprehensions in the industry.
Giving the rationale behind the move, Chandra said that in the last few years, some commissioner appeals and tribunals had
started seeking satisfaction note that was not their basic domain as it cannot be appealed against.
“Satisfaction note contains sensitive material, so it should not go to everyone in appellate channel. Also, we did not want a search be quashed by junior appellate authorities such as commissioner appeals, on flimsy grounds,” he said. High court is the final authority and the note is shown there, Chandra said.
The budget proposal had said, “Confidentiality and sensitivity are the hallmarks of proceedings under Section 132 and Section 132A. However, certain judicial pronouncements have created ambiguity in respect of the disclosure of ‘ reason to believe’ or ‘reason to suspect’ recorded by the income tax authority to conduct a search under Section 132 or to make requisition under Section 132A.”
But Chandra asserted that there is no change in provisions or procedures laid down to carry out a search. “We have strong safeguard for searches… Director general has to approve if it is a fit case for search and only then it can take place. Warrant has to be issued by principal director general of income tax….We have adequate protection,” he said.
No officer of the level of assessing officer, income tax officer, assistant commissioner, deputy commissioner, additional commissioner or even commissioner can carry out a search without the approval of the director general, Chandra said. Besides reasons have to be recorded and evidence placed on record that the assesse who is to be searched will not disclose the material which is in possession even if summons are issued, he said.