Only investigation wing, TDS directorate to conduct I-T surveys: CBDT

The income tax surveys to collect information for scrutiny assessment will be undertaken only by the investigation wing and the tax deducted at source (TDS) directorate with effect from Thursday, the Central Board of Direct Taxes (CBDT) has said.

In an order, the CBDT said officers in Directorate General of Income Tax (DGIT) (Investigation) and Principal Commissioner of I-T/Chief Commissioner of I-T (TDS) "only and exclusively" shall be the competent authority for approving survey actions with effect from August 13, 2020.

"The survey action u/s 133A of the Act being an intrusive action, it is expected that the same should be carried out with utmost responsibility and accountability," the CBDT said, adding that with faceless assessment the department is moving towards minimal interface with taxpayers.

Nangia Andersen LLP Partner Aravind Srivatsan said the previous regime allowed taxmen from inspector onwards, jurisdictional assessing officer to initiate the survey with prior approval of joint commioner of income tax.

"In effect the powers of the assessment authorities which were exercised in the normal course will now have to be backed by credible evidence to seek such approval from now permitted higher authorities. This shows the government intention to ensure only genuinely deserving cases would go through this procedure," Srivatsan said.

In an I-T survey, tax officers visit business premises of the taxpayer to gather information by way of examination of books of accounts, data stored electronically and also access email communication.

Srivatsan said it can be inferred from the order that the faceless assessment scheme could subject the taxpayer to more rigorous audit based on his profiling and industry situation and requires a careful maintenance of supporting documentation with regard to significant tax positions.

AKM Global Tax Partner Amit Maheshwari said it will increase accountability in conducting surveys. "Surveys by nature are very intrusive and sensitive. Now, only a selected division of the tax department can conduct a survey," he said.