Income tax raids at Dhampur Sugar Mills: Sources

Income tax authorities launched searches at private sector company Dhampur Sugar Mills' premises early on Wednesday, sources told Zee Business.

The raids were led by the investigation department under the Delhi income tax authorities.

It could not be ascertained immediately whether the searches were still underway.

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Dhampur Sugar Mills shares closed 2.8 per cent higher at Rs 139.9 apiece on BSE.

Here are answers to a few frequently asked questions (FAQs) about income tax investigations in India:

What is an income tax search?

An income tax search -- popularly referred to as a raid -- is carried out by the Income Tax Department.

This operation involves investigators searching the premises of individuals or entities suspected of tax evasion.

Which law are income tax raids conducted under?

Income tax raids are held under Section 132 of the Income Tax Act, 1961.

What prompts income tax authorities to launch a raid?

An income tax raid is conducted when the taxman has information that supports suspicion of income tax evasion. The searches are to find evidence supporting such suspicion.

Who authorises an income tax search?

These raids are authorised by senior I-T officers.

Can digital devices and documents be seized during these searches?

Yes.

What is an income tax survey? Is it different from a raid?

An income tax survey is a procedure conducted by the taxman mainly to collect information about an assessee’s business operations, covering details ranging from assets to financial books.

These surveys are authorised under Section 133A of the Income Tax Act, 1961.

Typically, these surveys are performed at the business premises during normal business hours, to verify records, ascertain income, and collect details for assessment purposes.

This action is different from an income tax raid.

Also known as searches, income tax raids are typically a 'search and seizure' operation under Section 132 of the Income Tax Act that enables the taxman to enter any location -- including residential or office premises -- at any time, with investigators having powers to seize cash, valuable items, or any other kind of suspected evidence.

Can a taxpayer challenge a search?

Yes.

Are Income Tax searches made public?

The department does not officially disclose names or details unless it leads to prosecution or a public statement is warranted.