Sie sind auf Seite 1von 9

PART-I

SERACH & SEIZURE, SURVEY AND SUMMONS

1. Can survey of a place other than the business place be done beyond the normal business hours u/s 133A? Please explain. Penalty for failure to comply with the provision of s 269SS (taking loan)Yes, but only after sunrise and before sunset, provided the person carrying on the business states that any of his books of account or other documents or any part of his cash or stock or other valuable articles or thing, related to his business or profession are or is kept in that place.

2. Can books of account be impounded u/s 133A? Please elaborate Ans. Yes. Books can be impounded u/s 133A after recording reasons for doing so. The impounded books of account can be retained for a period not exceeding 10 days (exclusive of holidays). Thereafter, retention can be done only with the prior approval of CCIT/DGIT, as the case may be.

3. Who can issue authorization under section 133A? Ans. The authorisation u/s133A can be issued by any of these authorities viz., Commissioner, Addl. Commissioner, a Joint Commissioner, a Director, a Addl/Joint Director, a Deputy/Assistant Director, an Assessing Officer or a Tax Recovery Officer.

4. Can survey be done when assessment is not pending? Please explain. Ans. Yes. Power of survey u/s 133A can be exercised at any stage irrespective of whether any proceeding is pending or not. The power can be exercised even in respect of proceeding which may be commenced after conduct of the survey operations.

5. Discuss the power of Assessing Officer U/s 131 of the IT Act? How the

power enjoyed by the Assessing Officer in distinguished from that of on Assistant Director (Inv.)? Ans. The powers of an Assessing Officer u/s 131(1) are as under;

i) discovery and inspection

ii) enforcing the attendance of any person, including any officer of a banking

company and examine him on oath

ii) compelling the production of books of account and other documents

iii)issuing commissions.

The power of issuing of summons u/s 131(1) of the IT Act by an Assessing Officer can only be exercised only when a proceedings is pending before him in relation to an assessee. Contrary to this, an Assistant Director (Investigation)

before him in relation to an assessee. Contrary to this, an Assistant Director (Investigation) HOME TEST/PART-I
before him in relation to an assessee. Contrary to this, an Assistant Director (Investigation) HOME TEST/PART-I

enjoys power to issue summons u/s 131(1A) of the IT Act, even if there is no proceeding is pending before him in relation to an assessee.

6. What are the limitations imposed on an assessing office or Assistant Director or Deputy Director vis-à-vis invoking powers to impound of retain books of account or other documents u/s 131 of the I.T Act? Ans. No books of account or any other documents cannot be impounded without

recording the reasons for doing so and cannot retain in his custody any such

15 days (excluding

holidays)without obtaining the approval of the CCIT/DGIT/CIT/DIT, as the case

books or a documents for a period exceeding

may be.

7. Discuss the circumstances in which the IT Authority may have ‘reason to believe’ to issue warrant of Authorization.

Following are the circumstances in which the Warrant of Authorization u/s 132 of the IT Act can be issued

132(1)(a)- A person to whom a summon u/s 131(1) or a notice u/s 142(1) has been served to produce books of accounts or other documents has failed or omitted to produce or cause to be produced the said books of accounts or other documents, or,

132(1)(b)- A person to whom a summon u/s 131(1) or a notice u/s 142(1) has been or might be issued is not likely to produce or caused to be produced any books of account or other document which will be useful for or relevant to any proceedings under the Act; or 132(1) (c)- A person is in possession of money, bullion, jewellery or other valuable article or thing and such property represents wholly or partly income or property which has not been disclosed or would not be disclosed.

8. Discuss the powers of an Authorized Officer u/s 132 of the IT Act. The powers of the Authorized Officer u/s 132 are as under;

a) Power to enter & Search

b) Power to break open

c) Power to search any person

d) Power of access to books of account/other documents

e) Power to seize

d) Power to place marks of identification f) Power to make a note or an inventory

Power to seize d) Power to place marks of identification f) Power to make a note
Power to seize d) Power to place marks of identification f) Power to make a note

9. During a search proceedings, an assessee found to have collection of rare paintings of an eminent painter and investment in paintings is undisclosed. Please discuss the provision of power to seize u/s 132 of the I.T Act. Ans. Under given facts and circumstances, the Authorised Officer can invoke the power u/s second proviso to section 132(1) i.e., deemed seizure as it is practicable to remove it to a safer place owing due to its physical characteristics.

10.What are the items that can be seized u/s 132 (1) & 132 (3 ) of the I T Act? Ans. Seizure made u/s 132(1) of the IT Act is also known as ‘deemed seizure’. An Authorised Officer can seize any valuable articles or things by means serving an order on the person who is in immediate possession or control. Section 132(3) of the IT Act empower the Authorised Officer to impose ‘Prohibitory Order’ on any such books of account, other documents, money, bullion, jewellery, other valuable article or thing directing the person who is oin immediate possession or control not to remove, part with or otherwise deal with it except the previous permission of such officer. This is provision, in a way entails for seizure for a limited period of 60 days only.

11. During a search proceedings, two person ‘A’ & ‘B’ were found inside the premises Person ‘A’ was found in possession of certain documents and his statement was recorded. Meanwhile, the statement of person ‘B’ was also recorded even though nothing was found from his possession or control. In light of the above facts & circumstances, please discuss the provisions of S 132(4) of the IT Act. Ans. In this case, the statement of person ‘A’ can be used as an evidence in any proceeding under the IT Act as certain documents were found in his possession. However, the statement of the person ‘B’ cannot be used as evidence in any proceeding under the IT Act as no documents/books are found from his possession or control. However, any be used if it is relevant to any proceeding under the IT Act.

12.A TEP against a builder received by a DDIT (Inv) alleging huge ‘on – money’ received in cash against sale of flats, which is not accounted for in the books of account. It is also alleged that one of the close confidant ‘B’ keeps all the books documents related to unaccounted money ‘On-Money’ received. The scheme of construction of flats is launched at Plot No. 007, Dharampeth, Nagpur. In light of the above facts and circumstance, please explain

a) What are the premises that are required to be covered under Search & Survey?

explain a) What are the premises that are required to be covered under Search & Survey?
explain a) What are the premises that are required to be covered under Search & Survey?

b)

What are the provisions of I.T act which could be invoked during the pre- search enquiries?

c)

Which

condition

of

the

S.

132(1)

is

fulfilled

to

get

the

warrant

of

Authorization?

 

Ans.

a) Residential premises of the builder as well as the ‘close confidant’ are required to covered under the search. Construction site may be covered under the Survey.

b) Provisions of section 131(1A) of the Act could be invoked.

c) Pre-condition specified u/s 132(1) (c) which states that a person is in possession of money, bullion, jewellery or other valuable article or thing and such property represents wholly or partly income or property which has not been disclosed or would not be disclosed, is satisfied.

partly income or property which has not been disclosed or would not be disclosed, is satisfied.
partly income or property which has not been disclosed or would not be disclosed, is satisfied.

PENALTY & PROSECUTION

13.An Assessing officer issue and serve notice on 29.07.2010, 14.07.2010 & 03.09.2010 U/s 142(1) of the IT Act to furnish certain details to a taxpayer. There is no compliance to the said notice. Discuss the nature of Penalty imposable alongwith the relevant provision and the quantum of penalty leviable in the instant case. Ans. in the instant case total penalty of Rs 30,000/- (i.e, Rs.10,000/- for each default) can be imposed u/s 271 (1)(b) of the I.T Act

14.List out the penal provisions of the I.T Act which empowers only Joint/Additional Commissioner of Income-tax to levy penalty. Also, instances where prior approval of the JCIT is required to levy penalty by the ITO ACIT/DCIT? Ans.

Section

Nature of Violation

271BB

Failure to subscribe to the eligible issue of capital

271C

Penalty for failure to deduct tax at source

271CA

Penalty for failure to collect tax at source

271D

Penalty for failure to comply with the provision of s 269SS (acceptance of loan/deposit)

271E

Penalty for failure to comply with the provision of s 269T (Repayment of loan or deposit)

15.Discuss the provision of S. 271 (1)(C) of the I.T. act alongwith the quantum of Penalty leviable with examples.

Penalty u/s 271(1)© is leviable in such cases where the Assessing Officer is satisfied that any person has concealed the particulars of his income or furnished inaccurate particulars of such income. The quantum of penalty ranges from the 100% to 300% of the ‘amount sought to be evaded.

16.An assessee in whose case search u/s 132 of the IT Act was carried out on 18.01.2009 had admitted undisclosed income of Rs. 10 crore in his statement recorded u/s 132(4) of the IT act. The assessee disclosed the following: unaccounted purchase & sale of diamonds resulted in profit of Rs. 10 crores. Also paid tax together with interest. In light of the above fact discuss the applicability of penalty u/s 271AAA.

Ans. in the instant case, mo penalty u/s271AAA of the I. T Act is leviable as the assessee admitted the undisclosed income and specified the n=manner in which

is leviable as the assessee admitted the undisclosed income and specified the n=manner in which HOME
is leviable as the assessee admitted the undisclosed income and specified the n=manner in which HOME

such income was derived, substantiates the manner in which the undisclosed income was derived and paid tax on the undisclosed income.

17.

Given below are the nature of penalty along-with the relevant section and quantum. Please match the following

   

Section

 

Nature of Default

   

Quantum of

 
 

Penalty

1

I

271B

A

Failure

of

deduct

tax

at

a

Rs. 25,000/-

 

source

2

II

271BA

B

Failure to answer questions, sign statement, reply to summons issued, etc

b

Rs.10000/- for each such default or failure

3

III

271C

C

Failure to keep , maintain or retain books, documents, etc.

c

Rs. 100,000/-

 

4

IV

271F

D

Failure to furnish report u/s

d

Rs. 5000/-

 

92E

 

5

V

271A

E

Failure to get accounts audited

 

e

RS.100,000/-

 

6

VI

272A

F

Failure to furnish return of Income

 

f

Equal to amount failed to deducted or pay

Ans:

 

Sl. No

Section

 

Nature of Default

Quantum

of

 

Penalty

1

I

E

c

2

II

D

e

3

III

A

f

4

IV

F

d

5

V

C

a

6

VI

B

b

18.

Given below are the circumstances in which the prosecution can be launched along-with the relevant section and quantum of punishment. Please match the following

Sl.No

Section

Nature of Offence

 

Quantum

of

Punishment

 

1 S. 275 A

I A

Contravention of order made second proviso to u/s 132(1) or 132(3)

i

Rigorous imprisonment & fine

 

2 S.275 B

II B

Failure to comply with provisions of 132 (i) (iib)

ii

Rigorous imprisonment for 2 yrs & fine

 

3 S.276

III C

Failure to furnish return of

iii

Imprisonment

of

five

  3 S.276 III C Failure to furnish return of iii Imprisonment of five HOME TEST/PART-I
  3 S.276 III C Failure to furnish return of iii Imprisonment of five HOME TEST/PART-I
   

CCC

 

Income in Search cases

 

months to 3 yrs & fine

4

IV S.

277A

D

Falsification of books of account or documents

iv

Imprisonment of five months to 3 yrs & fine

5

V S.

278

E

Abetment of false return

v

Imprisonment of 6 months to 7 yrs & fine

 

Ans. same combination

 

19.

Discuss the concept & meaning of ‘means rea’ in connection with application of penal and prosecution provisions of the IT act, 1961.

mens rea’ means a mental state, in which a person deliberately violates a law. Thus mens rea means intention to do the prohibited act

A penalty provision in a taxing Act may not be equated to a criminal statute requiring impliedly the element of mens rea and unless there is something in the language of the Act indicating the need to establish mens rea, it is generally sufficient to prove that a default in complying with the provisions of the Act for which the penalty is provided has occurred. The class of acts which are not criminal in any real sense, but are acts which in the public interest are prohibited under a penalty, and instances of which are found under the Revenue statute or Taxing statutes, is one of the classes where the legislature normally enacts absolute prohibition. Such offences in respect of which mens rea is not required to be established, are usually of a comparatively minor character and sentences prescribed for them are not of a severe type. Thus penalty imposable under an Act for the breach of civil obligation, such as payment of taxes, does not attract the rule that mens rea must be established before a penalty could be imposed, and as such, a penalty can be imposed even without there being any proof of mens rea

imposed, and as such, a penalty can be imposed even without there being any proof of
imposed, and as such, a penalty can be imposed even without there being any proof of

TAX AND INTEREST

20.Mr. Yadav is a Proprietor of ‘TR Enterprise’ and paid following taxes for F.Y.

2010-11.

i)

12.09.2010

-

Rs. 100000/-

13.12.2010

-

Rs. 200000/-

15.03.2011

-

Rs. 300000/-

ii)

Received Commission of Rs. 90,000/- against Rs. 100000/- from ‘GK Enterprises’

iii)

Paid tax of Rs. 51,000/- on 15.06.2011, before filing his return of income.

From the above, please identify forms of tax paid by under the head ‘advance tax’, TDS and Self Assessment tax alongwith the relevant provision governing the payment of above taxes paid by the assessee.

Ans. tax of Rs,100000/-, 200000/- and 300000/- is paid in the form of advance tax.

Rs.

90,000/-)

10,000/- is related to TDS (i.e.,

difference

between

Rs. 100,000/- and

Rs. 51,000/- represents the Self Assessment Tax.

21. Mr. X is proprietor of ‘K M Enterprises’ , whose turn-over is more than 75

lakh and filed his return of income for A.Y. 2010-11 (F.Y. 2009-10) on 31.12.2010) against the due date of 30.09.2010 with taxable income of Rs. 500000/- without paying any advance tax and any claim of TDS on the income received. The tax liability on the taxable income in Rs. 55620/- which included Rs. 8725/- paid as interest. The composition is the interest paid is Rs. 1668, Rs. 2053 & Rs. 5004/- (Total Rs. 8725/-). Identify the appropriate interest liability determined and payable u/s 234A, 234B & 234C. Ans. 234 A Interest- Rs.1668/-

234B

234C- Interest – Rs. 2053/-

Interest- Rs. 5004/-

234C. Ans. 234 A Interest- Rs.1668/- 234B 234C- Interest – Rs. 2053/- Interest- Rs. 5004/- HOME
234C. Ans. 234 A Interest- Rs.1668/- 234B 234C- Interest – Rs. 2053/- Interest- Rs. 5004/- HOME

APPEALS

22.

Explain

(Appeals) can be made?

Ans.

occasions;

the

instances

in

which

the

appeal

before

the

Commissioner

An aggrieved assessee can file his appeal before the CIT(A) on following

a) Intimation received u/s 143(1)

b) Order passed u/s 143(3)- Assessment Order

c) Order passed u/s 144- Best Judgment Order

d) Order u/s 147- Order passed upon re-opening of a case

e) Order u/s 153A- Search

f) Order u/s 154 ot 155 – Rectification order

g) Order u/s 201- Penalty for not deducting or to pay TDS

h) Order imposing the penalty- 271(1)(b),271 (1)©, etc.

There are various other orders which can be appealable before CIT (A). For the sake of brevity same are not given here.

23.

What

authorities?

is

the

time

limit

for

filing

appeal

before

various

appellate

Authority

Time limit

CIT(A)

Within 30 days of service of notice of demand

ITAT

Within 60 days of communication of the order passed by CIT(A)

HC

Within 120 days of receipt of order of the ITAT

SC

Within 90 days from the date of order of HC

24. Explain the jurisdiction of the various Appellate authorities under the Income-tax Act. Also explain the nature of appeal that can be filed before them?

Appellate

Jurisdiction

Nature of Appeal

Authority

CIT(A)

Territorial or Administrative CIT Charge-wise

Question of Facts as well as Law

ITAT

Territorial

Question of Facts as well as Law

HC

Territorial i.e, State

Question of Law

SC

All India

Question of Law

Law HC Territorial i.e, State Question of Law SC All India Question of Law HOME TEST/PART-I
Law HC Territorial i.e, State Question of Law SC All India Question of Law HOME TEST/PART-I