According to the Central Board of Direct Taxes (CBDT), the income tax surveys for the collection of data for inspection will only be carried out by the branch of the investigation and for tax deducted at the source (TDS). For these officials to be the Competent Authority for authorizing survey acts with effect from 13 August 2020 in Directorate General of Income Tax (DGIT) and Principal Commissioner of I-T / Chief Commissioner of I-T (TDS).
Under section 133A of the Income Tax Act, an income-tax officer or any authorized inspector of income tax can enter any place within the limits of the area assigned to him, or any place occupied by any person in respect of whom the income-tax officer exercises jurisdiction or at which a business or profession is carried on, for tax surveys and raids.
‘The survey operation u/s 133A of the act is an invasive activity and should be carried out with responsibility and accountability, CBDT said. The department is working towards a minimal interaction with taxpayers with faceless evaluations. The previous regime permitted a tax inspector, a qualified assessment officer, to start a survey by previous approval of the joint revenue tax commissioner, Aravind Srivatsan Nangia Andersen LLP Partner.
“In essence, now that higher authorities sanctioned such approval, the competence of evaluation authorities which were exercised in the normal course has to be backed by credible evidence. It shows the intention of the government to ensure that this practice is only truly worthy, “Srivatsan said.
In an I-T survey, tax officials visit the taxpayer’s business premises to gather information by reviewing records, electronically stored data, and access to e-mail correspondence.
Srivatsan said it can be concluded from the order that, based on his profiling and industry conditions, the taxpayer may be subject to a more stringent evaluation system, and that supporting data on significant fiscal positions needs to be carefully preserved.
AKM Global Tax Partner Amit Maheshwari confirmed that the surveys should be more accountable. “Intrusive and responsive surveys by their very definition. Now, a survey can be carried out by only the selected tax department, “he said.
