I-T AFTER `BIG FISH', RAIDS UP 60%The value of assets seized during
raids by the Income Tax Department has more than doubled in last five
years, as the department started going after the `big fish'. In its
quest, the department has been aided by sophisticated information
technology tools and intelligence received under tax agreements with
other countries. The number of raids rose from 3,281 in 2007-08 to 5,260
in 2011-12, arise of 60 per cent, while the value of assets seized rose
from Rs.427 crore in 2007-08 to Rs.905 crore in 2011-12, a 111 per cent
increase. However, the number of surveys fell from 6,071 in 2007-08 to
3,706 in 2011-12. Despite the decline, the undisclosed income detected
during these surveys increased from Rs.3,059 crore to Rs.6,572 crore.
Officials said raids have turned more effective, as the department now
acts on more specific information received from foreign jurisdictions.
"We are getting a lot of information under double taxation avoidance
agreements. This is helping us target the right people," said a finance
ministry official, adding information technology had also helped the
department keep a track of suspected tax evaders. Through raids, carried
out under section 132 of the Income Tax Act, investigators can conduct
searches at offices and residences of suspected tax evaders any time,
without a prior notice, and seize the documents they feel are relevant
to the case. A director of investigation or commissioner of income tax
can issue a warrant for such a search operation. However, through
surveys, carried out under section 133A, investigators can enter office
premises of suspected tax evaders only during business hours. Also, they
cannot seize documents or take away any valuable. A survey is carried
out on the instructions of a joint commissioner or a joint director of
the department. To add to incentives for disclosure, the Finance Act
2012 stated if undisclosed income was declared during a search, a
penalty of 10 per cent would be applicable; if it was disclosed while
filing returns, the penalty would be 20 per cent. If undisclosed income
was detected the assessment period after a search, the penalty would be
3090 per cent. Information collected by the department from various
sources such as annual information returns, tax deduction at source, the
Central Information Branch and the online tax accounting system is
collated in an integrated taxpayer data management system to create
accurate profiles of high net worth individuals. Cyber forensic labs in
Delhi and Mumbai have also thrown up results in many searchand-seizure
cases. The Income Tax Department's investigation wing has developed a
software audit tool to analyse computerised books of accounts to assist
tax officers in their assessments. – www.business-standard.com