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Assets acquired as a result of gift or a will should be supported by proper certificates.

A visiting American certified public accountant (CPA) from Florida, while on a local Indian flight, met a Commissioner of Income Tax.

Their conversation veered to this topic of mutual interest: The commissioner's poser to the American CPA was regarding the search and seizure provisions under Income Tax regulations in the US.

The CPA was surprised to hear about the concept of search and seizure which is known to US taxpayers but is part of a criminal investigation and conducted a little differently.

In India, the Income tax raid sends jitters down the spine and makes the high income group dread tax authorities. Technically called a Search & Seizure, it is a plan of action devised by Tax officials with care and secrecy based on authentic information rather than rumour and gossip.

If the tax officials firmly believe that a person is in possession of money, jewellery or undisclosed assets that would necessitate a search operation, they may issue a search warrant after confirming the veracity of information.

It may be noted that merely living in posh houses or conducting lavish marriages or an expensive lifestyle may not be the basis for a search, information is the essential factor.

While the operations invade the privacy and freedom of the tax payer, they are exercised under statutory requirements and principles of natural justice.

During the course of the search, the taxpayer's rights include examining the search warrant, having two or more respectable citizens as witnesses, verifying the identity of the search officials, allowing children to attend school, calling a doctor for any emergency, having a copy of panchanama which is the first list of evidence and findings, and copies of the seized books of account, data and documents.

However, these rights do not include the right to call the auditor during the course of search or attend any phone calls.

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India, US systems of ‘search & seizure'