Higher Cash found during Survey: Whether Income Tax Survey Can Be Converted Into Search?
One of the most common questions that arises during survey is “whether survey can be converted into search?” Whenever a survey is done and the authorities found cash exceeding Rs. 10 Lakh or Rs. 15 Lakh in possession of the assessee, department invariably threatens to convert the survey into a search action.
It may be noted that there is no power of seizure of cash during income tax survey whereas the power of seizure is embedded during income tax search.
There is a CBDT instructions No. F.No.414/16/2014-IT(INV.I) dated 30.09.2014 which also talks about the conversion of survey into search if cash above Rs. 10 Lakh or Rs. 15 Lakh is found in possession of the assessee. However, it may be noted that the power or duty of conversion of survey into search is not a blanket power. So, the threat of converting survey into Search if high cash is found is not as easy as it appears.
It may be carefully observed that CBDT Instruction of CBDT (Central Board Of Direct Taxes No. F.No.414/16/2014-IT(INV.I) dated 30.09.2014 says about the “unaccounted” cash and permit conversion of survey into search in case of cash not explainable or not recorded in the books of accounts.
As per this Instruction, if cash and valuable items of Rs.15 Lacs and more is found in 8 big cities including Pune and Hyderabad and Rs. 10 Lacs and more is found in other places then action for conversion into search should be initiated compulsorily. However, the said instruction is applicable only on “detection of substantial unaccounted cash & other valuable articles or other valuables during survey”. The fact has been duly discussed & incorporated in the said circular.
The copy of CBDT Instruction No. F.No.414/16/2014-IT(INV.
