Improving the quality of Appraisal Reports and Security of Seized / impounded books / documents / electronic storage devices - Income Tax - F. No. 286/76/2007- IT (Inv. II)

F. No. 286/76/2007- IT (Inv. II) Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes New Delhi, 24.08.2009 To, All Director Generals of Income Tax (Inv) (Intelligence) All Chief Commissioners of Income Tax (Central) Sir/Madam, Sub : Improving the quality of Appraisal Reports and Security of Seized / impounded books / documents / electronic storage devices Ref : Board s Instructions F.No. 286 / 76 / 2007- IT (Inv II), dated Sept 26 2007 and F.No.286 / 77 / 2007 - IT (Inv II) dated Sept 13 2007 Several instances have come to the notice of the Board where the guidelines issued by Board for improving the quality of Appraisal Reports have not been followed by the Investigation Directorates, 2.i. It is the experience of Central charges that although inspection of seized documents/ electronic storage devices has been allowed to the assessee by the Investigation Directorate, yet sometimes, in order to delay the filing of income tax Returns, assessee again demands inspection of same documents before the Assessing Officer. 2.ii. Despite clear guidelines in Search and Seizure Manual 2007 , instances have come to notice wherein Appraisal Report does not mention the assets / properties that are required to be considered for provisional attachment u/s 281 of the I.T. Act, 1961. 2.iii. It is also noticed that all the evidences gathered and findings by the Investigation Directorates during the post search enquires are not forwarded to the Assessing Officers, which results in duplication of enquiries, wastage of precious time of officers and grievance to assessee, 3. Therefore, while reiterating the issues mentioned in the Instructions under reference and the guidelines laid down in Search and Seizure Manual, the Instructions are hereby modified to the following extent: 3.i. In addition to mentioning the details mentioned in para 6.39 (SI. Nos. 1 to 22) of the Search and Seizure Manual, 2007, photo copies of the following documents should be annexed with the Appraisal Reports: a. Core Documents which point out to / indicate substantial concealment of income; b. Core documents which are the basis for assessee s admission of undisclosed income: c. Statements wherein the assessee has admitted undisclosed income, d. Document evidencing that inspection of documents has been allowed to the assessee (a clear mention of the same should be made in the Appraisal Report) 3.ii. Appraisal Report should clearly mention/list out : a. Assets/properties where provisional attachment u/s 281B is suggested. b. iCases where proceedings u/s 153C are required to be initiated, along with details of relevant seized documents or assets etc. belonging to such other persons; ii. It should also be specifically brought out as to which cases, out of these, have been proposed for centralization and in which cases, if any, the relevant seized material has been sent to the jurisdictional Assessing Officer for initiating proceedings u/s 153C. 4. Photocopies of following documents should be forwarded by a separate letter along with the Appraisal Report: a. Reports submitted by the leaders of the search teams; b. Entire post search enquiry folder; c. Enquiry reports/survey reports/statements recorded during and after search/ survey including statements of the witnesses; d. Print out of electronic storage devices in cases where print outs have been taken; e. All warrants of Authorization; f. All prohibitory orders, all bank statements obtained during search and post search enquiry, all letters to bank/other Agencies withdrawing Prohibitory Orders, 5. Intimation to other agencies: During course of search or post search enquiry, wherever infraction of other laws is found, in addition to mentioning this fact in the Appraisal Report, the processing Addl /Jt. DIT should immediately inform, the authorities responsible for administration of such laws, at the time of detection of infraction of other laws and not later than a period of 15 days of submission of the Appraisal Report. The information should also be invariably shared in the immediate next meeting of the Regional Economic Intelligence Council (REIC). 6. Preparation of Draft Questionnaire by the ADIT/DDIT (Inv) for the assistance of the Assessing Officer: While preparing the questionnaire to be issued to the assessee, if is noticed that valuable time is taken by the Assessing Officer, in examining the Appraisal Report and the seized books. With a purpose to save time of the Assessing Officer as also to assist him to issue the questionnaire expeditiously, it is hereby decided that, on the issues identified in the Appraisal Report in respect of the core cases, where proceedings u/s 153A or 153C is required to be initiated, the ADIT/DDIT (Inv) will prepare a draft questionnaire in consultation with the Joint /Addl DIT (Inv), which within 15 days of submission of Appraisal Report will be forwarded to the Assessing Officer. 7. The aforesaid guidelines should be brought to the notice of all officers working in your region for strict compliance. Yours faithfully, (D. Srinivas) Director (Inv. II III)