Articles Hierarchy
"
3rd(Final) Part: Search and Seizure - Assessment tips

In this part effort is made to give some idea as to how to proceed with to assess a Search and Seizure group of cases. Whereas in the 1st Part the procedure primarily relates to an area where the officers of the Directorate of Investigation are involved, the 2nd Part deals with the procedure where both the officers of the Directorate of Investigation and of other officers of the field formations are involved and in the 3rd and Final Part officers of the Central Charge/Assessment are involved. As these are generally critical cases it is expected that the concerned officers shall rely only on the Office Manual/instruction/guidance issued from time to time in this regards by the Competent Authority. This part is meant for the beginners in this area of work and therefore any inadvertent errors/deficiency noticed may please be shared for benefit of the group.
1. Assessment of Search and Seizure Cases – some useful tips:
(i) Check jurisdiction of the search cases from the Order u/s 127
(ii) Receive books of account and other documents and seized assets with reference to the relevant Panchanama
(iii)Appraisal Report and search file should be carefully studied
(iv)Remember the Search and Seizure assessments may pass through appeal/ inspection/ audit/ raeview/ vigilance.
(v) Decision of the Assessing Officer may not be questioned but the manner in which such decision is taken is always questionable. Therefore one is expected to strictly follow the procedure.
2. How to receive books etc
(i) Read the forwarding letter of the Investigating Wing through which books of account etc are handed over, very carefully
(ii) Check whether all the enclosures of the said forwarding letter are available for handing over or not
(iii) Receive books etc and statements recorded during search with reference to the relevant Panchanama
(iv) There may be more than one Panchanama in one search file
(v) Prepare the MS Excel sheet in the format as suggested in the link

Click here to download XLX form  for Rar file click here
3. How to study Appraisal Report at the initial stage
(i) Check the list of cases recommended by the Investigation Wing for assessment u/s 153A/153C
(ii) Match the assessees from the said list with those of the list in which search are conducted.
(iii) Assessees in whose case searches are conducted identify for action u/s 153A
(iv) Assessees in whose case searches are NOT conducted identify for action u/s 153C subject to seizure of books etc from the assessees in whose case searches are conducted.
4. Misc points to remember
(i) Among the seized items only Books of account and other documents as per Annexure-A and Other valuables as per Annexure-O of the Panchanama are received by the Assessing Officer (AO)
(ii) Cash seized are deposited in the Personal Deposit Account of the concerned CIT; the AO gets only the Annexure-C
(iii) Jewellery seized are deposited to the Treasury Officer or kept in the strong room of the Directorate of Investigation, AO gets only Annexure-J
(iv) Bank Locker keys are handed over to the assessee after search of the locker
(v) Find the age of the assessee- whether minor during the relevant assessment years. In case of Firm/AOP/Trust/Company etc see the date of formation- whether in existence during the relevant assessment years for initiation of proceedings. Examine the upper and lower limit of age that may be relevant for prosecution [Refer Section 292A]
5. Initiation of proceedings u/s 153A
(i) Identify the financial year/years in which search is conducted
(ii) Identify the six assessment years immediately preceding the financial year in which search is conducted
(iii) Record reasons in the order sheet and initiate proceedings u/s 153A for all the six assessment years separately
(iv)Record reasons in the order sheet and initiate proceedings u/s 143 for the assessment year relevant to the financial year in which search is conducted
(v) Issue and serve notice notices u/s 153A/142(1) calling for returns of income for each of the relevant assessment years separately.
6. Initiation of proceedings u/s 153C
(i) Identify the seized materials which is reported to have been seized from the premises of other assessees
(ii) Identify the period for which it relates then find whether it relates within the period of the six assessment years immediately preceding the financial year in which search is conducted
(iii) Record reasons in the order sheet and initiate proceeding u/s 153C for only the assessment year to which it relates
7. Preparation of requisition u/s 142(1)
(i) One requisition may be made for the whole 6+1 years but the assessee shall be asked to comply with the requisition separately year wise
(ii) Require the assessee to submit a note on the “Nature of Business”
(iii) Call for a copy of the Article/Memorandum of Association/Partnership Deed and such other legal documents with reference to the status of the assessee
(iv) All the points suggested in the Appraisal Report must find place in the requisition
(v) Assessee shall be asked to explain each books of account and other documents found, cash found, jewellery found and other assets found
(vi) Assessee shall be given an opportunity to disclose any other assets, bank accounts not found during search but existed during the relevant six assessment years and/or now exists
8. Analysis of the statement recorded by the Investigation Directorate
(i) Statements are recorded u/s 132(4)/131(1)/131(1A)
(ii) See whether oath has been duly administered while recording the statements or not, If not then take remedial action
(iii) See whether the statement has been recorded during the course of search or not
(iv) See whether the some points of the statement relate to any other persons, if so, whether a statement of ratification has been recorded u/s 132(4)/131 or not
(v) See whether there is any rebuttal of disclosure of income or not
(vi) Examine the deponent u/s 131 wherever necessary
9. Plan the line of scrutiny
(i) Whether to start for undisclosed sale
(ii) Whether to start for bogus expenses
(iii) Whether to start for undisclosed investment
(iv) Analyze the Appraisal Report and select a line of scrutiny
(v) Keep the plan at your chest till all the relevant explanation/materials are collected
(vi) Provide reasonable opportunity to rebut your conclusion before finalization
10. Drafting the assessment order
(i) Fill up ITNS-65 from the details already available with you
(ii) Prepare para-wise details of search from each of the Panchanama
(iii) Prepare one paragraph for disclosure made during search
(iv)Prepare one paragraph indicating various notices/requisitions issued and the assessee’s compliance
(v) Prepare one paragraph indicating the original returned and/or assessed income and the income disclosed in return u/s 153A/153C
(vi) Indicate that you have examined, analyzed, perused all the relevant seized materials and obtained necessary clarifications and discussed the case and heard the assessee
(vii) Prepare one paragraph indicating the nature of business of the assessee
(viii) If the assessee is a firm, prepare one paragraph indicating the name, PAN and share of profit/loss of the partners
(ix) Now note done your findings in this case
(x) Prepare one paragraph indicating that necessary approval u/s 153D of the Addl CIT/JCIT was obtained
11. End part of the Assessment Order
(i) End part of the assessment order is often neglected
(ii) Initiate the penalty proceedings first. Try to bring out the facts and circumstances for which penalty is initiated in the assessment order
(iii) Obligation of the Assessing Officer is to compute the tax and interest and to give credit of prepaid taxes
12. A sample- end part
Penalty proceedings u/s 271(1)(c)/271AAA/271AAB initiated separately
Assessed u/s 153A/143(3).
Demand Notice and copy of assessment order issued
Interests u/s 234A, 234B, 234C charged
Credit of prepaid taxes given
Sd/-
Above tips are suggestive in nature they can always be improved. A planned approach to work will ease tension in the last minute.

No Comments have been Posted.
Post Comment
Please Login to Post a Comment.
Latest Comments
» Great, Dada u have special quality to see and explain about statutes. I am sure None of us knowing it with such details. Thanks.
» Very well written , keeping it simple yet highly informative. Thank You Sir...
» Dada has brought out the intricate details in such a lucid manner that interest of the reader to go further into the subject increases. Thank you Dada
» Dada ...a truly valuable article..thanks
» Dada aapko shat shat naman hai. Aapka varad hast hum par rahe aur asha hai aapke gyan bhandar sagar se hamko aise aur bhi lekh milte rahenge jisse ...
» Thanks Sir, Got new vision of rules how to interpret law.
» Great Dada. So lucid and to the point. It gives so much more clarity, especially to those who are working as assessing officers. One of the most ch...
» A great article indeed. Thanks a lot Dada.
» Dada, Minute details are also discussed in this article. Lot of thanks Dada. Mohan
» A very comprehensive information and clarification on very important issue. Thank you very much Sir
» Dada really great article
» Great article Sir. Very helpful.
» Thanks Dada fir adding to our knowledge.A great article indeed
» Dada we have got another valuable article from your treasure of knowledge. We shall always be indebted to you.
» A person sold a land (Long Term Capital Asset) during F.Y. 2014-15 and purchased another land (Plot A) to build a residential house, complete sales...
» Whether investment in a plot will amount to investment in construction for the purpose of section 54F when no construction has been made
» I am speechless. Such a wonderful narration of the real plight of an assessing officer. Hats off to you sir.
» Dada, your explanation style is just superb and the topic choosen are also untouched by us. Sometimes we wonder why we did not see the things so de...
» Very informative and in depth knowledge given in this article at same time very concise. Dada's presentation is unparallel.
» Avinash sir Very nice information provided in this article. You are requested to provide the froms if available so that we can record the state...