Mar 6, 2010
Q. 1 What remedy does the assessee have in case
of misbehavior of the officers?
Ans. Misbehavior may lead to some injury, damage or
harm to the interest of the assessee or his reputation or
it may only hurt his feelings and sentiments, religious or
otherwise, Depending on facts, the action will lie by way
of challenge of the proceedings under article 226 if the
search is done in an irregular and illegal manner.
If it is a case of misbehaviour leading to hurt of sentiments
and feelings, the best course would be to lodge a complaint
with the Director or Commissioner concerned or with the
Director General or Chief Commissioner concerned or
with the Member (Investigation), In extreme cases, the action
may lie in TORTS. There, of course, it will have to
be established that it was covered by the immunity of sovereign act.
Q. 2 What remedies’ does the assessee have where during
search the assets are destroyed like sofas and beds’ are
torn, floor is dug and walls are broken?
Ans. No remcdy lies against such actions if they are done bona fide
and in good faith in carrying out the object of the search.
Action may lie only if these acts are done mala fide and there
was no reason to suspect that items broken or destroyed contained
any concealed income orassets hidden therein.
Neither on the basis of information received from the informer,
nor from any other source.
Q. 3 Can the assessee contract superior officer when
search is in progress to explain the difficulties being faced?
Ans. Yes, but the superior may not interfere with the judicial
discretion of the authorised officer, He may take administrative
action and such corrective measures as may relieve the assessee
of avoidable harassment and to makethe search operation less painful.
Q. 4 Whether can a legal advisor be present? if, yes,
he do when search is in progress?
Ans. Yes, he can be present.:
Q. 5 What remedy is available to a person whose cash
has been seized from the possession of his employee
who was carrying it in connection with business?
Ans. Such a person should immediately lodge his claim
before the authorised officer who has seized the cash
and produce necessary evidence to explain the source.
If the proceedings under section 132(5) have already been
commenced, he should lodge his claim under section 132(7).
In case he does not succeed there also, he may file an appeal
under section 132(11) before the Commissioner.
Q. 6 What remedy lies with regard to seizure of
cash whose sources are also explained?
Ans. Efforts should first be made to prevent the seizure
because once the seizure is made, Department may like
to pass an order. If the cash is wrongly seized, or for that
matter, any asset is wrongly seized, the authorisedofficer
should pass an order under section 154 to release such an asset.
Provisions of section 132(i) empower seizure of only such assets,
which represent fully or partly undisclosed income.
Therefore, seizure of any assets, which does not satisfy the
basic condition, involves an illegality in the act of seizure,
which should be corrected by the officer as if he has
committed mistake of fact and/or of law apparent from
record. Since this kind of seizure would be without
jurisdiction, it will be a fit case for filing a writ petition under
article 226 of the Constitution.
Q. 7 Can assessee ask for identity card of officers?
Ans. Yes. Sometimes the authorised officers or the person
accompanying them do not possess the identity card.
As an alternative, they should carry and produce some
other documents to prove their identity, e.g, a certificate
attesting their signatures, The certificate should be issued by
a seniorofficer in charge of the search or by an immediate superior.
In a case where there is no proof of identity, the assessee would
be within his right to refuse the ingress.
Q. 8 Can assessee ask for a copy of warrant?
Ans. No. Warrant of authorisation is meant and addressed to
the authoriscd officer and it has to be executed by him.
It is an instrument to arm him with the authority to search.
After execution of the warrant, it is to be returned to the
issuing authority. The assessee is, however, entitled to go
through the warrant. In fact, the authorisedofficer is duty
bound to produce it and in evidence of production thereof,
he may obtain the signatures of the assessee or his representative
along with the signatures of two witnesses.
The assessee should inspect it carefully to see that:
(a) it is not blank;
(b) irrelevant portions are struck off, etc.
If these defects are found, he should bring them on record
by filing a letter before the authorisedofficer.
If the warrant is blank and the name and address
is not correctly recorded, he may as well not allow
the ingress. In case of other defects, question of challenging
the validity under article 226 may be considered.
Q. 9 Can the authorised officer refuse permission to the
assessee or any other person to be present
on his behalf during search?
Ans. No. Sub-rule (8) of rule 112 provides that the
occupant of the building, place, vessel, vehicle or aircraft
which is searched, as also the person in charge of such
vessel, etc., or any other person on his behalf, shall be
pen-nitted to attend duringthe search and a copy of seizure
memo prepared under sub rule (7) shall be delivered to the
occupant or to such other person.
Q. 10 Can the authorised officer enter and search
any building belonging to the assesee once the
warrant of authorisation is issued against him?
Ans. No, he can enter and search only such building in
relation to which the warrant of authorisation is specifically issued.
Q. 11 Can the assessee call his relatives to
assist him during the course of search?
Ans. Yes, he can do so but the authorised officer may carry
out their personal search before allowing them entry.
However, he may order such persons who may be creating
obstruction in the proper and smooth conduct ofthe search,
to leave the premises or he may not grant the permission
if he apprehends any obstruction in the smooth conduct of
the search proceedings.
Q. 12 Can an authorised officer prevent the assessee
from receiving or making telephone calls and telex messages?
Ans. No, unless he believes that such permission will defeat the
very object of the search and that the assessee may use his messages
to fabricate false evidence, remove the assets, or make other manipulation.
Q. 13 Is it advisable to give answer to every question by
saying, ‘I do not remember because of the confused state
of my mind created due to the sudden raid’?
Ans. It is neither advisable nor in the interest of the assessee
to deliberately answer every question by repeating
“I do not remember” or “I do not know”.
He may lose the opportunity of explaining several items ofassets ,
which he can otherwise do. Besides, he may run the risk of
prosecution in case on the basis of contemporaneous evidence
recovered subsequently duringthe search it appears that the facts
were within the knowledge of the assessee, which he declined to disclose.
It would be on the other hand, advisable to take the help of the books
of account and other documents and give all possible information,
which is readily available. However, in genuine cases where it is
not practicable to remember certain facts with certainty or minute
details of transactions particularly those of several past years,
the assessee may only explain their nature, if possible and add that
he would be able to furnish the details and explanations after
looking into record. A statement made on the spot in support of his
explanation has greater evidentiary value.
Q. 14 What remedy is available to a genuine
depositor of the money when the search takes
place against a person with whom the deposit is made,
e.g., with a car dealer with whom initial deposit of money
is made for booking the car or with a moneylender with
whom the ornament orjewellery may be pawned as security for loan?
Ans. Proceedings with the presumption that the deposit is
genuine and the assessee against whom the search proceedings
are taken, is able to establish its genuiness during the course
of the search itself, any seizure or restraint of the deposit would
be ab initio void, It is also well settled that even the restraint under
section 132(3) can be made only after the authorisedofficer is
satisfied that the asset, in question, wholly or partly, is
concealed income or wealth.
Therefore, any seizure of a genuine or disclosed amount will be
‘without jurisdiction and, in any case, illegal.
Therefore, the assessee and/or the depositor can
always approach the authorised officer either during the
course of search itself with the necessary evidence and
claim that no seizure is called for or they can approach the
authorised officer even after seizure; but within 15 days of
the time limit prescribed under section 132(9A) to release the
amount wrongly seizcd by rectifying the order of seizure
under section 154. Release should be made in the presence
of two witnesses.
If the time limit of 15 days has expired and the seized
assets have been handed over to the Assessing Officer,
the assessee and/or the depositor can file writ under
Article 226 on the ground that the seizure was without
jurisdiction or, in any case, illegal, and that no further
proceedings under section 132(5) can be taken in respect
of such assets. The depositor can also approach the
Assessing Officer during the course of proceedings under
section 132(5) as a “concerned person”, and put his claim
for release of the amount or at best, to proceed against
him under section 132(7).
If he does not succeed there, he can file an appeal
before the Commissioner, where he will be entitled to
raise all the grounds, including the question of validity of
the search and seizure and claim the release of the assets.
Answer to present question should not be mixed with
the answer to the earlier question wherein it is said that
no disclosure can be made by a third party during the
course of search. The distinguishing factor is that while in
the present question, the seizure being of disclosed asset
itself is illegal and without jurisdiction, in the earlier question
the seizure is valid and the question is as to who can make
the disclosure and in which proceedings?
Q. 15 Can the assessee be arrested during the course of search?
Ans. No, the authorised officer does not have the power
to arrest an assessee for an offence under the Income-tax Act
or other Direct Tax Laws while acting under section 132.
However, in case of offences like destruction of documents,
attack on the search party, an authorised officer can lodge a
complaint with the police and the appropriate police authority
may take congnizance of the offence and order an arrest.
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