Investigative Search and Seizures: Legal Insights on Determining Accurate Total Income

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New Delhi, 9th July 2024 : PHDCCI, under the aegis of its Direct Tax Committee organized Conference on Income Tax, Search and Seizure – Practical issues during assessment proceedings subsequent to search matters on Thursday, 4th July 2024 at PHD House, New Delhi. The aim of the conference was to provide a holistic understanding of search and seizure in the income tax context, addressing both legal and practical aspects. It seeks to foster an environment of learning, discussion, and collaboration to improve the implementation and administration of search and seizure provisions, ensuring a balance between effective tax enforcement and taxpayer rights.

Present on this occasion Mr. Mukul Bagla, Chairman Direct Taxes Committee, PHDCCI & Senior Parner at O.P. BAGLA & Co. LLP; Dr. Rakesh Gupta Co-Chairman Direct Taxes Committee, PHDCCI & Senior Parner at RRA Tax India; Mr Anant Bhatia, Co-Chairman Direct Taxes Committee, PHDCCI & Partner and CEO – Bhatia & Bhatia; Mr. Rohit Jain Partner at Vaish Associates; Ms Babeeta Sharma, Senior Secretary, PHDCCI and Mr. Minakshi Srivastava, Deputy Secretary, PHDCCI.

The programme saw good participation virtually and physically of academia, experts, practitioners, policymakers, stakeholders, industry and professionals.

In the inaugural session Mr. Mukul Bagla, Chairman Direct Taxes Committee said that During the search assessment proceedings, several key aspects are considered. The first involves the evidence and documentation found during the search, including access to documents, hard disks, chips, and cell phones. This is fundamental to the assessment process. The second aspect concerns the income based on the documents found. In many cases, there are assumptions and estimations involved. Another important aspect is the recording of statements whether from staff and employees. Finally, the settlement and negotiation process comes, and the manner in which the assessment is filed, play crucial roles in search cases

Dr. Rakesh Gupta Co-Chairman Direct Taxes Committee said that a search is an investigative process aimed at determining the correct total income. Objective of search is to identify undisclosed assets. Another important goal is to send a message to society about the seriousness of tax evasion. We are governed by the rule of law throughout the search proceedings and the widespread tax evasion in society cannot be ignored.

Mr. Rohit Jain Partner at Vaish Associates said that when books of accounts are found, it is essential that the author of these accounts explains the real facts. Every statement holds its own substantial value. Statements from the employee or the business owner, who is also the author of the documents, will be taken. If there is consistency in the statements, it supports accurate analysis. However, if the statements are contradictory, it complicates the assessment process.

Mr Anant Bhatia, Co-Chairman Direct Taxes Committee emphasized that Engaging with these issues can lead to a deeper understanding of the complexities involved in search and seizure under the Income Tax Act. It can also help identify areas for improvement, fostering a more transparent and fair tax enforcement system and asked relevant issues during the conference on search and seizure in order to stimulate meaningful discussions and provide valuable insights.

Ms Babeeta Sharma, Senior Secretary, PHDCCI moderated the session & gave concluding remarks and formal vote of thanks for the program. Ms. Minakshi Srivastava, Deputy Secretary, PHDCCI. Coordinated the conference very well.

The programme was supported by RRA Tax India, O.P. BAGLA & Co. LLP, Vaish Associates, AZB & Partners and PHDCCI’s annual partners, DLF Ltd; Jindal Steel & Power; KLJ Group; Multani Pharmaceuticals Ltd; Marble City; MMG Group; Radico Khaitan Ltd; Uflex Ltd; Vestige; Eazy ERP Technologies; JK Tyre & Industries Ltd; Sagar Group of Industries; Superior Industries Limited; Samsung India Electronics; Oswal Greentech; Apeejay Stya Group; Blossom Kochhar Beauty Products Pvt Ltd; DCM Shriram; R E Rogers; Trident Group; Ajit Industries Pvt Ltd; Bhagwati Plastic and Pipes Industries; Central Coalfields Ltd; DD Pharmaceutical Ltd.; Hindware Sanitary; Jindal Steel; Modern Automobiles; P S BEDI & Co.