Income Tax Survey To Be Conducted Only After Nod From High-Ranked Officers: CBDT
Surveys can be conducted only by the officers of the investigation wing or the TDS charge.
Income tax surveys to collect information for scrutiny assessment will be undertaken by the tax deducted at source directorate only after approval from principal chief commissioner or chief commissioner level officer, the Central Board of Direct Taxes has said.
The CBDT has issued directions to the officers that where any survey action is required by officers of "Central Charge" (involving search/ seizure), international charge, National e-Assessment Centre/ National Faceless Assessment Centre, the same shall have to be first approved by a collegium comprising high-ranked officers.
Pursuant to 'The Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020', the apex direct tax body CBDT has issued an internal order on exercising the power of survey by tax officers under Section 133A of the Income Tax Act.
In an income tax survey, tax officers visit business premises of the taxpayer to gather information by way of examination of books of accounts, data stored electronically and also access e-mail communication.
"Any verification or survey u/s 1A of the Act by the TDS charge shall be conducted by its own officers. Where the TDS charge is headed by the Pr. CCIT (Principal Chief Commissioner of Income Tax) of the region or by the CCIT (TDS), the verification or survey action shall be approved by the Pr.CCIT of the region or the CCIT (TDS), as the case may be and shall be conducted by the officers of the TDS charge," the CBDT said.
It further said surveys can be conducted only by the officers of the investigation wing or the TDS charge and "any such action shall be taken only as a last resort when all the other means of verification/obtaining details online/recovery are exhausted."
The CBDT also directed that the principal commissioner of income tax or commissioner of income tax of the TDS charge or the investigation wing should monitor and ensure that the survey does not go beyond the scope as approved.
The tax department on Friday issued new guidelines to restrict intrusive or coercive action for recovery of tax demand by Assessing Officer/Tax Recovery Officer. The new guidelines have come into effect immediately.
Nangia Andersen LLP Director Neha Malhotra said, "This shows that the government intends to ensure that only deserving cases are subject to the survey procedure. After the approval, the survey proceedings shall be conducted by a team of officers."
The approval process and the team-based approach shall ensure high level of transparency, functional specialisation, efficiency and improvement in quality of assessment. The new directions shall also help check the powers of the officers and create an accountable tax administration system, she said.
"Further, Principal Commissioners have been directed by the CBDT to ensure that the survey does not go beyond the scope covered. The directions make it clear that the CBDT wants to keep a check on the powers of the overzealous tax officers who resort to harsh steps without making due effort required as per law," Malhotra added.