How to Tackle an Income Tax Raid?

An Income Tax Raid is carried out by the Income Tax Department on the basis of information obtained through investigation by the department and after necessary internal approvals. This information is gathered from various reports or from the information network of the Department.

If you are diligent in reporting his income and paying proper amount of taxes, you need not panic about a raid.

Object of a raid:

Income Tax department carries out a raid for revealing tax avoidance on behalf of an assessee.

What comprises a “raid”?

In the process of raid the Income Tax Department is authorized to search any premises be it residential or commercial, vehicles, bank volts etc. and can take possession of the assets or documents discovered in the process.

According to section 133A of the Income Tax Act the Department is authorized to enter a business premises and search all documents along with cash for making a “survey” but is not authorized to seize them.

To tackle the situation confidently you have to understand the law relating to Income Tax on this subject.

Lack of knowledge would make you uncomfortable and tensed. You have to know your legal rights which are going to protect you.

How to avoid the chances of Raid?

Complying with the summons and notices sent by the Income Tax Department under section 131(1), 142(1), etc. will help you to avoid the probability of a raid.

One should not retain unaccounted or undeclared money or property, often termed as “Black Money”. All sources of income, whether taxable or exempt, must be disclosed before the Income Tax Department to decrease the chances of a tax raid.

Rights of a person during the raid:

An assessee can ask for local witnesses during a raid. If he has children, they should not be prevented from going to school. But the Income Tax officials can check the school bags.

The raids should be carried out between sunrise and sunset and can continue for 48 hours. The assessee is lawfully entitled to check the search warrant and the identification of the officer doing the raid.

The female members of the family of an assessee can insist to be searched by female personnel of the Income Tax Department.

If the officer concerned wishes to seize some jewellery, he may seal them and retain it at your premises. You can request not carry them away. If any valuables belong to somebody else, give the name and address of the owner.

Whatever articles are seized, they should be properly listed and described with details.

Rights after the Raid:

An aggrieved person who has not been fairly raided can move a writ petition before the Hon’ble High Court against the raid or the assessment.