Search & Seizure work/block assessments-matters relating thereto - Income Tax - F. No. 286/57/2002-IT(Inv. II)

F. No. 286/57/2002-IT(Inv. II) Ministry of Finance Department of Revenue Central Board of Direct Taxes Date of Issue : 03.7.2002 To All Directors General of Income Tax (Inv.), All Chief Commissioners of Income Tax Sub : Search Seizure work/block assessments-matters relating thereto Sir, In order to make search and seizure action an effective tool for detection for concealment of income resulting into deterrence to tax evasion without causing avoidable harassment to the tax payers, it is incumbent on the part of officers concerned that all the works relating to search and seizure action and block assessments are carried out with full degree of objectivity and accountability in accordance with the provisions of law and instructions issued by the Board from time to time. In this regard, Board desires that the following actions should be strictly implemented: i. Statement under Sec 132(4) should be carefully recorded to collect and marshal the facts and evidences because it is the earliest opportunity to do so. Disclosure of undisclosed income in statement under Sec 132(4) without proper evidence in support thereof shall be adversely viewed. In the telex report, details of evidence in support of disclosure, if any under sec 132(4) should be clearly spelled out. ii. Proper care should be taken for taking back up of the data stored in the computers during search action. For this purpose, officials having acquaintance with computer work should be taken in search team. iii. Search seizure work should be completed as early as possible and restraint order u/s 132(2) should be lifted within one month from the date of passing such order(s). iv. Wide publicity should be given to search seizure cases by DGIT (Inv.) without naming the persons searched. However, in sensitive cases, Member (Inv.) should be consulted in advance. v. Due care should be taken in preparing the appraisal report with objectivity. Concerned officers of the wing should point out references to seized record, statement, etc for each proposal for verification. vi. Newly inserted sec 132B provides to release the explained seized assets within 120 days from the date of search. Assesses should be given sufficient opportunity by the assessing officer in support of claim that seized assets are explained. vii. Following time schedule be strictly followed for completing various work from the date of intimation of search: a. Initiation of proposal for centralization one month b. Completion of centralization work, including orders under sec 127 etc two month c. Completion of appraisal report two months d. Handing over of appraisal report/seized records with copies of warrants to Assessing Officer two a half months e. Notices under sec 158BC three months viii. Inspection of seized record and copies of statement(s) taken should be allowed within 15 days from the date of receipt of application in this regard. ix. Copies should be expeditiously examined for provisional attachment of assets under sec. 281B. x. The tendency to take up the assessment proceedings at a very late stage should be stopped. Same should be taken up immediately after expiry of time allowed for filing of return in Form 2B. xi. Wherever there is a major deviation between the income proposed to be assessed and the income estimated in appraisal report, the matter should be discussed between assessment wing and investigation wing and minutes of the same should be recorded. xii. Due opportunity should be given to the assessee by the supervisory officer giving approval to proposed block assessment, at least one month before the time barring date. xiii. Money deposited in PD Accounts should be expeditiously adjusted against the demand. xiv. The cases as emphasized by Member (Inv.) in his letters dated 21st/24th June 2002 sent to DGlT(Inv.) and CCIT separately, should be processed quickly for intimation of prosecution proceedings. xv. Range Addl./Joint CIT shall send a progress report in all search seizure cases at interval of every three months to CIT and of every six months to DGIT (lnv.)/CCIT from end of the month in which search was concluded. xvi. Range Addl./Joint CIT shall also maintain a register for each search seizure case including pending cases incorporating following details: 1. Name of the assessee 2. Date of initiation and completion of search 3. Whether case covered by sec 158BD 4. Seizure made with break up 5. Disclosure, if any, u/s 132(4) 6. Date of passing orders for centralization 7. Date of receipt of Appraisal Report 8. Date of receipt seized records including copies of warrants 9. Date of application, if any, received for inspection and date on which inspection actually allowed 10. Date of issue of notice u/s 158BC 11. Date of filing return for block assessment 12. Income disclosed in block return 13. Details of tax paid on income disclosed in block return 14. Adjustment from PD Accounts, if any against tax on income disclosed in block return 15. Date of application, if any, from the assessee making a claim that seized assets or part thereof are explained. 16. Details and date of decision on (15) above, as per newly inserted Section 132B 17. Date of first notice to take up block assessment proceedings and also details of subsequent notices/questionnaire/hearing etc. 18. Date(s) of hearing before Addl. CIT/Joint CIT required to grant approval to block assessment 19. Assessed income with date of order 20. Tax liability on assessed income. 21. Details of adjustment from PD account, after completion of block assessment with date 22. Whether case processed for launching prosecution and details of prosecution if any, launched. This register, in respect of all the pending assessments where search conducted prior to 1-4-2002 should be ready by 31st July 2002. Commissioner of Income Tax and DGIT (Inv.)/CCIT shall inspect this register once in every three months/six months respectively and offer their comments by making an entry in said register itself. Member (Inv.) shall also inspect this register during his visit.