India: What To Do-When The Taxmen Knocks At The Door!

Last Updated: 25 April 2017
Article by Gagan Kumar, Amit Kaushik and Shreya Chaudhari

The present Government is focusing on increasing the tax base particularly after de-monetisation and introduction of Benami Transactions (Prohibition) Amendment Act, 2016. The most effective tool in this aspect is surveys conducted by the Income Tax Department. Generally, the objective of conducting survey which in common parlance means 'to scrutinize/inspect' is to broaden the tax base by discovering the new assesses thereby ensuring flow of revenue back into the economy, the scope and ambit being much narrower than cases of search and seizure. We are listing below some of the common concerns which tax payers may generally have in case a 'Survey' is conducted by the Revenue Authorities.

When a Survey can be conducted?

The Income Tax Authorities can conduct a survey on any person in their jurisdiction even if no proceedings relating to the person are pending before them.

Who can conduct the survey?

1.      The Survey can be conducted by the Income tax authority. Generally speaking, the Income-tax Authority is defined to include the Assessing Officer and higher officers.

2.      For the limited purpose of inspecting the books of account or for placing identification marks thereon, etc. it will include the Inspector of Income-tax as income tax authority.

3.      Survey can be conducted by Assistant Director, Deputy Director, Assessing Officer or Tax recovery Officer or by Inspector only after obtaining the approval of the Joint Director or the Joint Commissioner as the case may be.

4.      TDS authorities are empowers to conduct a survey, however, the scope of their survey must confine to matters relevant to TDS only.

Can Survey be conducted only at Business Premises?

1.      Generally, surveys are conducted at the place where a person carries on its business or profession. It is not necessary that such place ought to be the principal place of business.

2.      Under normal circumstances, the survey proceedings shall not extend to residential/other premises unless the person categorically states that books of account, documents, valuable article/thing etc. which relates to his business/profession are kept in such premises.

3.      Survey can also be conducted at the premises of a person's CA/Advocate if he states that books of account, documents, valuable article/thing etc. which relates to his business/profession are kept in such premises.

4.      The 2017 Budget has given powers to conduct survey at a place where an activity for charitable purpose is carried on.

Can Tax Authorities come after working hours?

1.      The general legal norm is that survey can be carried out at business/working hours i.e. during the hours at which the place of business/profession is open for the conduct of business/profession.

2.      If the survey is conducted at a place other than the place of business/profession, the income tax authorities can enter only after sunrise and before sunset.

3.      Once the entry has been made before sunset, the survey can be continued till any time beyond sunset.

Know your Rights:

1.      Entry in to the premises can be made only if the premises are open and there is no provision enabling the surveying authority to break open any door or lock or windows to enter the premises. A survey may rightfully get converted into search proceedings where the tax-payers prohibit or refuse to allow the authorities to enter the premises to be surveyed.

2.      Business place cannot be sealed during the course of survey.

3.      The authorities do not have power to interrupt the ordinary business or peaceful life of citizen.

4.      The authorities conducting survey do not have right to conduct physical search of any person.

5.      If a person cooperates with tax authorities and provides them necessary facilities to conduct survey, then his statement cannot be recorded on oath.

Know your Duties:

1.      It is the duty of the proprietor/employee/any other person who is responsible for carrying out the business/profession to which the survey relates to ensure that necessary facility is provided to the concerned authority so that it can carry out the function of inspection of books of account/other documents required, verification/checking cash/stock/valuable article or thing, furnishing any other information that is deemed to be necessary or relevant.

2.      If a person doesn't cooperate with the tax authorities then his statement can be recorded on oath and used as credible evidence in assessment proceedings.

3.      If the officer feels that the assessee refuses or evades co-operating during the survey, it is likely that the survey officer may approach his superiors for authorizing a Search.


Does a person have a legal Right of Representation during Survey?

1.   Law does not entitle an assessee to insist the presence of Authorised Representative.

2.   It is to be noted that there is no express prohibition in the statute prohibiting presence of counsel during survey proceedings.

3.   Therefore, an Assessee may request and if permitted may call for, to assist in proper conduct of the survey.

Power of Tax Authorities during Survey:

1.      To place marks of identification on the books of accounts.

2.      To take extracts from such books of accounts and documents or records.

3.      To make an inventory of any cash, stocks and other valuables checked by him.

4.      To record the statement of any person.

5.      To collect information regarding nature and scale of expenditure incurred in connection with personal functions and events like birthday, marriages etc.

6.      To impound or retain in his custody books of accounts or other documents inspected by him after recording his reasons for doing so. It is further provided that such books of account or other documents shall not be retained for more than fifteen days (exclusive of holidays) without obtaining the approval of the Chief Commissioner of Income Tax or Director General or Commissioner or Director therefor.

Power to record statement:

1.      The Income Tax Authority is empowered to record the statement of any person which may be useful for or relevant to any proceeding under the Act. As is stated above, this statement cannot be recorded on oath unless the person refuses to cooperate.

2.      Generally, Survey Provisions do not empower the tax authorities to examine any person on oath and therefore the statement recorded under section 133A has no evidentiary value and any admission made during such statement cannot be made basis of addition.

3.      However, materials collected even during the course of illegal survey can be used for making additions.

Can they break open closets?

The concerned authority cannot break open the closets during survey; there being no such provision stipulated under the Act for the same. To the contrary, the provisions of search & seizure expressly states that in situations where the keys of the door,box,locker,almirah etc. are not available, then the authority may break open the closet in order to exercise its power to search any building,vessel etc. where the officer has reason to suspect that any books of accounts, documents etc. may be kept therein.

Can they impound cash and jewellery?

The Act puts an embargo on the income-tax authority to remove or cause to be removed from the place wherein he has entered, any cash, stock or other valuable article or thing.

The provisions with respect to search and seizure on this point are much wider in its ambit and providethat the income-tax authority may seize any such books of account/ other documents / money/ bullion/ jewellery/ valuable article or thing found as a result of the search conducted.

Can they take away computers or hard disks or pen drives?

The term "document", includes an electronic record meaning thereby, the power to impound documents includes power to impound the data stored in computers. By this analogy, even the data stored on pen drives as well as hard disks can be taken for the purpose of inquiry.

Can it be claimed that the documents found during Survey belongs to someone else?

Where any books of account, other documents, money, bullion, jewellery or other valuable article or thing are or is found in the possession or control of any person in the course of a survey it may, in any proceeding under this Act, be presumed that the same belongs to such person, unless proved otherwise.

Does the income surrendered during survey enjoy immunity from penalty?

There is no provision giving immunity from penalty from the income surrendered in the course of survey.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.