CBDT Chief Al­lays Fears of Ar­bi­trary I-T Searches Chan­dra says author­i­ties will need to sub­mit be­fore HC ‘sat­is­fac­tion note’ de­fend­ing search

The Economic Times - - Economy: Macro, Micro & More - Deepshikha.Sikar­war @times­group.com

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.

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