What happens in an income tax raid in India
20 Oct 2018
There is no separate operation called an income tax ‘raid’. It’s a blanket term to cover searches and seizures.
Income tax search operations are the stuff of legend, glorified or mythologised as the case may be in films, TV series and media reports.
But what exactly is a ‘search operation’? How do income tax department employees go about these searches?
The income tax department can carry out surveys, searches and seizures — each a different activity.
A survey is conducted on loosely-patched information only during working hours at office premises or factories, but not at residences.
A search operation, on the other hand, is more extensive, undertaken without any prior information, and can continue for days.
Although media reports and even fictional versions loosely refer to ‘raids’ conducted by the income tax department, it is a blanket term to cover searches and seizures — there’s no separate operation called a raid.
How do taxmen get information?
‘Raids’ are based on information of tax evasion or accumulation of black money the tax department gets and collates on a continuous basis from various sources such as banks, the Financial Intelligence Unit (FIU) and Central Information Bureau, which does a 360-degree profiling of taxpayers based on their engagements, income threshold, and even on the quantum of tax they pay.
How is a search operation initiated?
Based on the information, suspected cases are identified for searches, after which search warrants are issued by the internal authority led by a senior official.
A search team is set up. However, the identity of the person or company and the place where the operation is to be conducted is kept a secret. The search team is not told about the whereabouts to ensure that information is not leaked.
A search warrant is handed over in the morning to the team in a sealed envelope, and it is sent on its way.
How is the operation actually conducted?
The search team could comprise two people or even a dozen, depending on the scale. Typically, if there are to be simultaneous searches on multiple premises — residential properties and offices in other cities, for example — the team is a large one.
The team arrives and hands over the search warrant. At residences no member of the family or staff is allowed to leave the premises until the operation is over. Ditto for employees at offices. In most cases, they are not allowed to make or take phone calls.
However, this can change depending on the authorities’ judgement, or in medical emergencies. A few members may be allowed to leave the premises, only if the team is convinced that they have no information and are not in connivance with the accused.
“Even if they have to use washrooms, they have to take the permission. The taxmen ensure that they have been thoroughly checked,” said one income tax officer.
However, when the operation goes on for multiple days, the accused and their immediate associates can even use the kitchen. “Often, when the taxmen are lucky, they get to have beverages or even some food. Else, they have to organise their own,” the official said, adding that this was mostly fast food, like pizza, which can be had on the go, rather than a sit-down meal.
How are items seized?
Taxmen can either take a clone of the hard disks of computers or even the original. They can seize cash and jewellery and even take copies of other financial documents.
Once it is done, a statement of all items seized is issued, which is verified and signed by the suspects as well as the search team. A separate statement of the suspects is also recorded before the search operation is called off.