Assessments under Income-Tax Act, 1961

Article discusses about Meaning of assessment, Scope/Procedure/Time limit

of Assessment under section 143(1)/ section 143(3)/ section 144/ section 147.
Every taxpayer has to furnish the details of his income to the Income-tax Department. These
details are to be furnished by filing up his return of income. Once the return of income is filed
up by the taxpayer, the next step is the processing of the return of income by the Income Tax
Department. The Income Tax Department examines the return of income for its correctness.
The process of examining the return of income by the Income-Tax department is called as
“Assessment”. Assessment also includes re-assessment and best judgment assessment under
section 144.
Under the Income-tax Law, there are four major assessments given below:
 Assessment under section 143(1), i.e., Summary assessment without calling the assessee.
 Assessment under section 143(3), i.e., Scrutiny assessment.
 Assessment under section 144, i.e., Best judgment assessment.
 Assessment under section 147, i.e., Income escaping assessment.
Assessment under section 143(1)
This is a preliminary assessment and is referred to as summary assessment without calling the
assessee (i.e., taxpayer).
Scope of assessment under section 143(1)
Assessment under section 143(1) is like preliminary checking of the return of income. At this
stage no detailed scrutiny of the return of income is carried out. At this stage, the total income
or loss is computed after making the following adjustments (if any), namely:-
(i) any arithmetical error in the return; or
(ii) an incorrect claim (*), if such incorrect claim is apparent from any information in the
return;
(iii) disallowance of loss claimed, if return of the previous year for which set-off of loss is
claimed was furnished beyond the due date specified under section 139(1); or
(iv) disallowance of expenditure indicated in the audit report but not taken into account in
computing the total income in the return; or
(v) disallowance of deduction claimed u/s 10AA, 80IA to 80-IE, if the return is furnished
beyond the due date specified under section 139(1); or
(vi) addition of income appearing in Form 26AS or Form 16A or Form 16 which has not been
included in computing the total income in the return. However, no such adjustment shall be
made in relation to a return furnished for the assessment year 2018-19 and thereafter.
However, no such adjustment shall be made unless an intimation is given to the assessee of
such adjustment either in writing or in electronic mode. Further, the response received from
the assessee, if any, shall be considered before making any adjustment, and in case where no
response is received within 30 days of the issue of such intimation, such adjustments shall be
made.
 For the above purpose “an incorrect claim apparent from any information in the return”
means a claim on the basis of an entry in the return :-
(i) of an item which is inconsistent with another entry of the same or some other item in such
return;
(ii) in respect of which the information is required to be furnished under the Act to
substantiate such entry and has not been so furnished; or
(iii) in respect of a deduction, where such deduction exceeds specified statutory limit which
may have been expressed as monetary amount or percentage or ratio or fraction;
Procedure of assessment under section 143(1)
 After correcting arithmetical error or incorrect claim (if any) as discussed above, the tax and
interest and fee*, if any, shall be computed on the basis of the adjusted income.
 Any sum payable by or refund due to the taxpayer shall be intimated to him.
 An intimation shall be prepared or generated and sent to the taxpayer specifying the sum
determined to be payable by, or the amount of refund due to the taxpayer.
 An intimation shall also be sent to the taxpayer in a case where the loss declared in the return
of income by the taxpayer is adjusted but no tax or interest is payable by or no refund is due
to him.
 The acknowledgement of the return of income shall be deemed to be the intimation in a case
where no sum is payable by or refundable to the assessee or where no adjustment is made to
the returned income.
*As per section 234F (as inserted by Finance Act, 2017 with effect from Assessment Year
2018-19), a fee shall be levied where the return of income is not filed within the due dates
prescribed under section 139(1). The amount of fee is as follows:-
(a) Rs. 5,000, if the return is furnished on or before the 31st day of December of the
assessment year;
(b) Rs. 10,000 in any other case:
Provided that if the total income of the person does not exceed Rs. 5,00,000, the amount of
fee shall not exceed Rs. 1000.
Time-limit
Assessment under section 143(1) can be made within a period of one year from the end of the
financial year in which the return of income is filed.
Assessment under section 143(3)
This is a detailed assessment and is referred to as scrutiny assessment. At this stage a detailed
scrutiny of the return of income will be carried out is to confirm the correctness and
genuineness of various claims, deductions, etc., made by the taxpayer in the return of income.
Scope of assessment under section 143(3)
The objective of scrutiny assessment is to confirm that the taxpayer has not understated the
income or has not computed excessive loss or has not underpaid the tax in any manner.
To confirm the above, the Assessing Officer carries out a detailed scrutiny of the return of
income and will satisfy himself regarding various claims, deductions, etc., made by the
taxpayer in the return of income.
 Procedure of assessment under section 143(3)
 If the Assessing Officer considers it necessary or expedient to ensure that the taxpayer has
not understated the income or has not computed excessive loss or has not underpaid the tax in
any manner, then he will serve on the taxpayer a notice requiring him to attend his office or
to produce or cause to be produced any evidence on which the taxpayer may rely, in support
of the return.
 To carry out assessment under section 143(3), the Assessing Officer shall serve such notice in
accordance with provisions of section 143(2).
 Notice under section 143(2) should be served within a period of six months from the end of
the financial year in which the return is filed.
 The taxpayer or his representative (as the case may be) will appear before the Assessing
Officer and will place his arguments, supporting evidences, etc., on various matters/issues as
required by the Assessing Officer.
 After hearing/verifying such evidence and taking into account such particulars as the taxpayer
may produce and such other evidence as the Assessing Officer may require on specified
points and after taking into account all relevant materials which he has gathered, the
Assessing Officer shall, by an order in writing, make an assessment of the total income or
loss of the taxpayer and determine the sum payable by him or refund of any amount due to
him on the basis of such assessment.
E-Assessments
The Finance Act, 2018 has inserted a new sub-section (3A) in Section 143 that the Central
Govt. may make a scheme for the purpose of making assessment so as to impart greater
efficiency, transparency and accountability by:
A. Eliminating the interface between the Assessing Officer and the assessee in the course of
proceeding to the extent technologically feasible;
B. Optimising utilization of the resources through economies of scale and functional
specialization;
C. Introducing a team-based assessment with dynamic jurisdiction.
As part of e-governance initiative to facilitate conduct of assessment proceedings
electronically, Income-tax Dept. has launched ‘E-Proceeding’ facility. Under this initiative,
CBDT has made it mandatory for the tax officers to take recourse of electronic
communications for all limited and complete scrutiny. The CBDT had issued the instructions
and notice formats for conducting scrutiny assessments electronically. As per the instruction,
except search related assessments, all scrutiny assessments shall be conducted only through
the ‘E-Proceeding’ functionality available at e-filing website of Income-tax Dept.
Time-limit
As per Section 153, the time limit for making assessment under section 143(3) is:-
1) Within 21 months from the end of the assessment year in which the income was first
assessable. [For assessment year 2017-18 or before]
2) 18 months from the end of the assessment year in which the income was first assessable.
[for assessment year 2018-19]
3) 12 months from the end of the assessment year in which the income was first assessable
[Assessment year 2019-20 and onwards]
 Note:- If reference is made to TPO, the period available for assessment shall be extended by
12 months.
Assessment under section 144
This is an assessment carried out as per the best judgment of the Assessing Officer on the
basis of all relevant material he has gathered. This assessment is carried out in cases where
the taxpayer fails to comply with the requirements specified in section 144.
Scope of assessment under section 144
As per section 144, the Assessing Officer is under an obligation to make an assessment to the
best of his judgment in the following cases:-
 If the taxpayer fails to file the return required within the due date prescribed under section
139(1) or a belated return under section 139(4) or a revised return under section 139(5).
 If the taxpayer fails to comply with all the terms of a notice issued under section 142(1).
Note: The Assessing Officer can issue notice under section 142(1) asking the taxpayer to file
the return of income if he has not filed the return of income or to produce or cause to be
produced such accounts or documents as he may require and to furnish in writing and verified
in the prescribed manner information in such form and on such points or matters (including a
statement of all assets and liabilities of the taxpayer, whether included in the accounts or not)
as he may require.
 If the taxpayer fails to comply with the directions issued under section 142(2A).
Note : Section 142(2A) deals with special audit. As per section 142(2A), if the conditions
justifying special audit as given in section 142(2A) are satisfied, then the Assessing Officer
will direct the taxpayer to get his accounts audited from a chartered accountant nominated by
the principal chief commissioner or Chief Commissioner or Principal Commissioner or
Commissioner and to furnish a report of such audit in the prescribed form.
 If after filing the return of income the taxpayer fails to comply with all the terms of a notice
issued under section 143(2), i.e., notice of scrutiny assessment.
 If the assessing officer is not satisfied about the correctness or the completeness of the
accounts of the taxpayer or if no method of accounting has been regularly employed by the
taxpayer.
From the above criteria, it can be observed that best judgment assessment is resorted to in
cases where the return of income is not filed by the taxpayer or if there is no cooperation by
the taxpayer in terms of furnishing information / explanation related to his tax assessment or
if books of accounts of taxpayer are not reliable or are incomplete.
Procedure of assessment under section 144
 If the conditions given above calling for best judgment are satisfied, then the Assessing
Officer will serve a notice on the taxpayer to show cause why the assessment should not be
completed to the best of his judgment.
 No notice as given above is required in a case where a notice under section 142(1) has been
issued prior to the making of an assessment under section 144.
 If the Assessing Officer is not satisfied by the arguments of the taxpayer and he has reason to
believe that the case demands a best judgment, then he will proceed to carry out the
assessment to the best of his knowledge.
 If the criteria of the best judgment assessment are satisfied, then after taking into account all
relevant materials which the Assessing Officer has gathered, and after giving the taxpayer an
opportunity of being heard, the Assessing Officer shall make the assessment of the total
 income or loss to the best of his knowledge/judgment and determine the sum payable by the
taxpayer on the basis of such assessment.
Time-Limit
As per Section 153, the time limit for making assessment under section 144 is:-
1) Within 21 months from the end of the assessment year in which the income was first
assessable. [For assessment year 2017-18 or before]
2) 18 months from the end of the assessment year in which the income was first assessable.
[for assessment year 2018-19]
3) 12 months from the end of the assessment year in which the income was first assessable
[Assessment year 2019-20 and onwards]
Note:- If reference is made to TPO, the period available for assessment shall be extended by
12 months.
Assessment under section 147
This assessment is carried out if the Assessing Officer has reason to believe that any income
chargeable to tax has escaped assessment for any assessment year
Scope of assessment under section 147
 The objective of carrying out assessment under section 147 is to bring under the tax net any
income which has escaped assessment in original assessment.
 Original assessment here means an assessment under sections 143(1), 143(3), 144 and 147
(as the case may be).
 In other words, if any income has escaped (*) from being taxed in the original assessment
made under section 143(1) or section 143(3) or section 144 or section 147, then the same can
be brought under tax net by resorting to assessment under section 147.
* In the following cases, it will be considered as income having escaped assessment:
 Where no return of income has been furnished by the taxpayer, although his total income or
the total income of any other person in respect of which he is assessable during the previous
year exceeded the maximum amount which is not chargeable to income-tax.
 Where a return of income has been furnished by the taxpayer but no assessment has been
made and it is noticed by the Assessing Officer that the taxpayer has understated the income
or has claimed excessive loss, deduction, allowance or relief in the return.
 Where the taxpayer has failed to furnish a report in respect of any international transaction
which he was required to do under section 92E.
 Where an assessment has been made, but:
i. income chargeable to tax has been under assessed; or
ii. income has been assessed at low rate; or
iii. income has been made the subject of excessive relief; or
iv. excessive loss or depreciation allowance or any other allowance has been computed;
 Where a person is found to have any asset (including financial interest in any entity) located
outside India.
 Where a return of income has not been furnished by the assessee and on the basis of
information or document received from the prescribed income-tax authority under section
 133C(2), it is noticed by the Assessing Officer that the income of the assessee exceeds the
maximum amount not chargeable to tax.
 Where a return of income has been furnished by the assessee and on the basis of information
or document received from the prescribed income-tax authority under section 133C(2), it is
noticed by the Assessing Officer that the assessee has understated the income or has claimed
excessive loss, deduction, allowance or relief in the return.
Procedure of assessment under section 147
 For making an assessment under section 147, the Assessing Officer has to issue notice under
section 148 to the taxpayer and has to give him an opportunity of being heard. The time-limit
for issuance of notice under section 148 is discussed in later part.
 If the Assessing Officer has reason to believe that any income chargeable to tax has escaped
assessment for any assessment year, then he may assess or reassess such income and also any
other income chargeable to tax which has escaped assessment and which comes to his notice
subsequently in the course of the proceedings under this section. He is also empowered to re-
compute the loss or the depreciation allowance or any other allowance, as the case may be,
for the assessment year concerned.
 Items which are the subject matters of any appeal, reference or revision cannot be covered by
the Assessing Officer under section 147.
Time-limit for completion of assessment under section 147
As per Section 153, the time limit for making assessment under section 147 is:-
1) Within 9 months from the end of the financial year in which the notice under section 148
was served (if notice is served before 01-04-2019).
2) 12 months from the end of the financial year in which notice under section 148 is served
(if notice is served on or after 01-04-2019).
Note:- If reference is made to TPO, the period available for assessment shall be extended by
12 months.
Time-limit for issuance of notice under section 148
> Notice under section 148 can be issued within a period of 4 (*) years from the end of the
relevant assessment year. If the escaped income is Rs. 1,00,000 or more and certain other
conditions are satisfied, then notice can be issued upto 6 years from the end of the relevant
assessment year.
> In case the escaped income relates to any asset (including financial interest in any entity)
located outside India, notice can be issued upto 16 years from the end of the relevant
assessment year.
Notice under section 148 can be issued by AO only after getting prior approval from the
prescribed authority.
Income Tax Authorities
Income tax authority [Explanation (a) to section 133A]:

"Income-tax authority" means a Commissioner, a Joint Commissioner, a

Director, a Joint Director, an Assistant Director or a Deputy Director or an
Assessing Officer, or a Tax Recovery Officer, and for the purposes of clause (i)
of subsection (1), clause (i) of sub-section (3) and sub-section (5), includes an
Inspector of Income-tax.

1.1. Various Authorities

Section of the Income Tax Act, 1961 provides for the administrative and
judicial authorities for administration of this Act. The Direct Tax Laws Act,
1987 has brought far-reaching changes in the organizational structure. The
implementation of the Act lies in the hands of these authorities. The change
in designation of certain authorities and creation of certain new posts in the
structure are the main features of amendments made by The Direct Tax Laws
Act, 1987. The new features of authorities has been properly depicted in a
chart on the facing page. These authorities have been grouped into two main
wings :

(i) Administrative [ Income Tax Authorities ][ Sec.

116 ]
a. the Central Board of Direct Taxes constituted under the Central Boards
of Revenue Act, 1963 (54 of 1963),
b. Directors-General of Income-tax or Chief Commissioners of Income-tax,
c. Directors of Income-tax or Commissioners of Income-tax or
Commissioners of Income-tax (Appeals),
1. (cc) Additional Directors of Income-tax or Additional
Commissioners of Income-tax or Additional Commissioners of
Income-tax (Appeals),
2. (cca) Joint Directors of Income-tax or Joint Commissioners of
Income-tax.
d. Deputy Directors of Income-tax or Deputy Commissioners of Income-
tax or Deputy Commissioners of Income-tax (Appeals),
e. Assistant Directors of Income-tax or Assistant Commissioners of
Income-tax,
f. Income-tax Officers,
 g. Tax Recovery Officers,
h. Inspectors of Income-tax.

(ii) Assessing Officer [ Sec. 2(7A)]

"Assessing Officer" means the Assistant Commissioner or Deputy
Commissioner or Assistant Director or Deputy Director or the Income-tax
Officer who is vested with the relevant jurisdiction by virtue of directions or
orders issued under sub-section (1) or sub-section (2) of section 120 or any
other provision of this Act, and the Joint Commissioner or Joint Director who
is directed under clause (b) of sub-section (4) of that section to exercise or
perform all or any of the powers and functions conferred on, or assigned to,
an Assessing Officer under this Act;

Importance of Assessing Officer :

In the organizational setup of the income tax department Assessing Officer
plays a very vital role. He is the primary authority who initiates he
proceedings and is directly connected with the public. Form the time of filing
of return till the assessement is completed he plays a pivotal role . He can
start proceedings for non filing of return, imposition of penalties etc. Orders
passed by him can be challenged only on approval. The department can
revise his orders only if it is proved that there are prejudicial to the revenue
and that too only by the Commissioner of Income Tax.

(iii) Appointment of Income-Tax Authorities [ Sec.

117 ]
1. Power of Central Government : The Central Government may appoint
such persons as it thinks fit to be income-tax authorities. It kept with
itself the powers to appoint authorities upto and above rank of an
Assistant Commissioner of Income-Tax [ Sec. 117 (1) ]
2. Power of the Board and Other Higher Authorities : Subject to the
rules and orders of the Central Government regulating the conditions
of service of persons in public services and posts, the Central
Government may authorize the Board, or a Director-General, a Chief
Commissioner or a Director or a Commissioner to appoint income-tax
authorities below the rank of an Assistant Commissioner or Deputy
Commissioner. [ Sec. 117 (2) ]
3. Power to appoint Executive and Ministerial Staff : Subject to the
 rules and orders of the Central Government regulating the conditions
of service of persons in public services and posts, an income-tax
authority authorized in this behalf by the Board may appoint such
executive or ministerial staff as may be necessary to assist it in the
execution of its functions.

(iv) Control of Income-Tax Authorities [ Sec. 118 ]

The Board may, by notification in the Official Gazette, direct that any income-
tax authority or authorities specified in the notification shall be subordinate to
such other income-tax authority or authorities as may be specified in such
notification.

APPOINTMENT OF INCOME TAX AUTHORITIES:

The Central Government can appoint those persons whom it thinks are fit to become Income
Tax Authorities. The Central Government can authorize the Board or a Director-General, a
Chief Commissioner or a Commissioner or a Director to appoint income tax authorities
below the ranks of a Deputy Commissioner or Assistant Commissioner, According to the
rules and regulations of the Central Government controlling the conditions of such posts.

Search and Seizure & Survey under Income Tax Act 1961
Search, according to normal dictionary meaning, means to look out, to seek or to find
something the presence of which is suspected etc. Seize means to take possession of goods,
contrary to the wishes of the owner or to take forcible possession. From income tax point of
view, in common parlance search is referred to as ‘RAID’. However, there is no such term as
raid anywhere in income tax law.
Search & seizure-from income tax perspective:
Search operations are exploratory exercises on the basis of information with the income tax
department to find hidden income and wealth in cases of tax payers, who have not disclosed
their true financial state of affairs in discharge of their tax obligations.
Seizure implies taking possession of assets, which have not been disclosed to the Income-tax
Department and of accounts/documents, papers which contain details of unaccounted
wealth/income not disclosed to the income tax authorities.
Thus, search and seizure is a very powerful weapon in the armory of income tax department
to unearth any concealed income or valuables and to check the tendencies of tax evasion
thereby mitigating the generation of black money.
1. Who can authorize (i.e., issue search warrants) proceedings u/s 132
 Sec.132 empowers the Principal Director General or Director General or Principal Director or
Director or the Principal Chief Commissioner or Chief Commissioner or Principal
Commissioner or Commissioner to authorize proceedings under this section.
Tax point: Proceeding means any proceeding in respect of any year, which may be pending
on the date on which a search is authorized under this section or which may have been
completed on or before such date and includes also all proceedings which may be
commenced after such date in respect of any year.
 Who can conduct search Income tax authority, having power to initiate search u/s 132, can
authorize its subordinate(s) (not below the rank of Income tax officer) to conduct search.
Following subordinates can be authorized
Authorized Officer who can conduct Authorized from
search

Additional Director or Additional Principal Director General or Director

Commissioner or Joint Director, Joint General or Principal Director or Director or
Commissioner, Assistant Director, Deputy Principal Chief Commissioner or Chief
Director, Assistant Commissioner, Deputy Commissioner or Principal Commissioner or
Commissioner or Income tax officer Commissioner

Assistant Director, Deputy Director, Additional Director or Additional

Assistant Commissioner, Deputy Commissioner or Joint Director or Joint
Commissioner or Income tax officer Commissioner (on the basis of authorization
from above authority and being empowered
by the Board)
 Power of authorized officer
While conducting search, authorized officer has following powers –
1. Enter and search any building, etc.: Enter and search any building, place, vessel, vehicle
or aircraft where he has reason to suspect that such books of account, other documents,
money, bullion, jewellery or other valuable article or thing are kept.
2. Break open the lock of any door, etc.: Break open the lock of any door, box, locker, safe,
almirah or other receptacle, where the keys thereof are not available.
3. Search person: Search any person who –
 has got out of; or
 is about to get into; or
 is in, the building, place, vessel, vehicle or aircraft if the authorised officer has reason to
suspect that such person has secreted about his person any books of account, other
documents, money, bullion, jewellery or other valuable article or thing.
4. Require any person to facilitate the authorised officer: Require any person who is
found to be in possession or control of any books of account or other documents maintained
in the form of electronic record, to afford the authorised officer the necessary facility to
inspect such books of account or other documents.
5. Seizure: Seize any such books of account, other documents, money, bullion, jewellery or
other valuable article or thing found as a result of such search.
6. Place marks of identification: Place marks of identification on any books of account or
other documents or make extracts or copies therefrom.
7. Make inventory: Make a note or an inventory of any such money, bullion, jewellery or
other valuable article or thing.
8. Examine on oath: Examine on oath any person who is found to be in possession or control
of any books of account, documents, money, bullion, jewellery or other valuable article or
thing. Any statement made by such person during such examination may thereafter be used as
evidence in any proceeding.
The examination of any person may be not merely in respect of any books of account, other
documents or assets found as a result of the search, but also in respect of all matters relevant
for the purposes of any investigation connected with any proceeding under Act.
Taxpoint
♦ No seizure of stock in trade
Bullion, jewellery or other valuable article or thing, being stock-in-trade of the business, shall
not be seized but the authorized officer shall make a note or inventory of such stock-in-trade.
♦ Extension of jurisdictional area
Where any building, place, vessel, vehicle or aircraft is within the area of jurisdiction of any
Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or
Commissioner, but such authority has no jurisdiction over such person; and
Such authority has reason to believe that any delay in getting the authorisation from the
Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or
Commissioner having jurisdiction over such person may be prejudicial to the interests of the
revenue,
– then it shall be competent for him to exercise the above powers.
♦ Handing over of seized assets to the Assessing Officer having jurisdiction:
Any asset or document so seized shall be handed over to the Assessing Officer having
jurisdiction over such person within a period of 60 days from the date on which the last of the
authorizations for search was executed. Thereafter, such Assessing Officer exercises all other
powers.
♦ Extension of Authorisation [Sec. 132(1A)]
Where a search for any books of account, other document, money, bullion, jewellery or other
valuable article or thing is authorized; and
Other Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or
Commissioner in consequence of information in his possession, has reason to suspect that
such document or asset is kept in any other building, place, vessel, vehicle or air craft not
mentioned in the authorization,
then such other Principal Chief Commissioner or Chief Commissioner or Principal
Commissioner or Commissioner can authorize the officer to search such other building,
place, vessel, vehicle or air craft.
Taxpoint: The reason to suspect, as recorded by the income-tax authority, shall not be
disclosed to any person or any authority or the Appellate Tribunal.
♦ Deemed or constructive Seizure [Second Proviso to Sec. 132(1)]
 Conditions
Where it is not possible or practicable to take physical possession of any valuable article or
thing and remove it to a safe place due to reason of its –
Where it is not possible or practicable to take physical possession of any valuable article or
thing and remove it to a safe place due to reason of its –
being of a dangerous nature.
Procedure
The authorised officer may serve an order on –
the owner; or
the person who is in immediate possession or control of any valuable article or things,
– that he shall not remove, part with or otherwise deal with such article or thing without the
prior permission of such authorised officer.
Effect
Such action of the authorised officer shall be deemed to be seizure of such article or thing.
Notes
a) No such order can be passed for any article or thing, being stock-in-trade.
b) Though such order can also be passed for reasons other than those mentioned above, but in
that case, the order shall not be deemed to be seizure of such article or things and it shall not
be in force for a period exceeding 60 days from the date of the order [Sec. 132(3) & (8A)]
 Provisional Attachment
Where
1. during the course of the search or seizure; or
2. within a period of 60 days from the date on which the last of the authorisations for search
was executed, the authorised officer may attach provisionally any property belonging to the
assessee and for the said purpose, the provisions of the Second Schedule shall, mutatis
mutandis, apply.
Such attachment shall be subject to following conditions:
a) The authorised officer is satisfied that for the purpose of protecting the interest of revenue,
it is necessary to do so.
b) The reasons for such provisional attachment should be recorded in writing
c) Previous approval (in writing) of the Principal Director General or Director General or the
Principal Director or Director has taken.
Every provisional attachment shall cease to have effect after the expiry of 6 months from the
date of such order.
The authorised officer may make a reference to a Valuation Officer referred to in sec. 142A,
who shall estimate the fair market value of the property in the manner provided under that
section and submit a report of the estimate to the said officer within a period of 60 days from
the date of receipt of such reference.
♦ Authorisation and assessment in case of search or requisition [Sec. 292CC]
It shall not be necessary to issue an authorisation u/s 132 or make a requisition u/s 132A
separately in the name of each person.
Where an authorisation u/s 132 has been issued or requisition u/s 132A has been made
mentioning therein the name of more than one person, the mention of such names of more
than one person on such authorisation or requisition shall not be deemed to construe that it
was issued in the name of an association of persons or body of individuals consisting of such
persons.
Though authorisation u/s 132 or requisition u/s 132A has been made mentioning therein the
name of more than one person, the assessment or reassessment shall be made separately in
the name of each of the persons mentioned in such authorisation or requisition.
♦ Time limit for retention [Sec. 132(8)]
The books of account or other documents seized or deemed seized shall not be retained by the
authorised officer for a period exceeding 30 days from the date of the order of assessment u/s
153A.
Exception
It can be retained for more than 30 days on fulfillment of the following conditions –
1. The reasons for retaining the same are recorded in writing; and
2. The (prior) approval of the Principal Chief Commissioner or Chief Commissioner,
Principal Commissioner or Commissioner, Principal Director General or Director General or
Principal Director or Director for such retention is obtained.
Taxpoint
1. Maximum retention
The aforesaid authorities shall not authorise the retention of the books of account and other
documents for a period exceeding 30 days after all the proceedings in respect of the years for
which the books of account or other documents are relevant, are completed.
2. Power of the Board to pass an order [Sec. 132(10)]
Where a person is legally entitled to the books of account or other documents seized;
Such person objects for any reason to the approval given by the authorities; and
Such person makes an application to the Board stating therein the reasons for such objection
and requesting for the return of the books of account or other documents. then the Board may,
after giving the applicant an opportunity of being heard, pass such orders as it thinks fit.
Presumption in case of search [Sec. 132(4A)]
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
search, it may be presumed that –
Such books of account, other documents, money, bullion, jewellery or other valuable article
or thing belongs to such person;
The contents of such books of account and other documents are true;
The signature and every other part of such books of account and other documents which
purport to be in the handwriting of any particular person, are in that person’s handwriting;
and
In the case of a document stamped, executed or attested, it was duly stamped and executed or
attested by the person by whom it purports to have been so executed or attested
Other Provisions
1. Help from Government officers [Sec. 132(2)]: It shall be the duty of every police officer or
of any officer of the Central Government or of both officer to assist authorised officer to
invoke his power.
2. Right to make copies or take extract [Sec. 132(9)]: The person from whose custody books
of account or other documents are seized may make copies thereof or take extracts therefrom.
Such right can be exercised in the presence of the authorized officer or any other person
empowered by him in this behalf, at such place and time as the authorized officer may
appoint in this behalf.
3. Power of Board to make rules [Sec 132(14)]: The Board may make rules in relation to any
search or seizure providing the procedure to be followed by the authorised officer –
i. for obtaining ingress (i.e. right to enter) into any building, place, vessel, vehicle or aircraft
to be searched where free ingress thereto is not available;
ii. for ensuring safe custody of any books of account or other documents or assets seized.
4. The provisions of the Code of Criminal Procedure, 1973 relating to searches and seizure
shall apply, so far as may be, to search and seizure [Sec. 132(13)].
Application of Seized or Requisitioned Assets
The seized assets may be adjusted with:
1. The amount of any existing liability under –
i) The Income-tax Act, 1961;
ii) The Wealth-tax Act, 1957 (now abolished); ► The existing liability does not include
advance tax payable.
2. The amount of liability determined on completion of the assessment u/s 153A;
3. The amount of liability determined on completion of the assessment of the year relevant to
the previous year in which search is initiated or requisition is made; (including any penalty
levied or interest payable in connection with such assessment); and
d) The amount in respect of which such person is in default or is deemed to be in default or
the amount of liability arising on an application made before the Settlement Commission.
Release of Asset ( Section 132 B)
Condition for release of asset
Where the following conditions are satisfied, the amount of any existing liability may be
recovered out of such asset and the remaining portion of the asset may be released to the
person from whose custody the assets were seized –
1. The person concerned makes an application to the Assessing Officer within 30 days from
the end of the month in which the asset was seized for release of asset;
2. The nature and source of acquisition of such asset is explained to the satisfaction of the
Assessing Officer; and
3. The Assessing Officer obtains the prior approval of the Principal Chief Commissioner or
Chief Commissioner or Principal Commissioner or Commissioner.
♦ Time limit for release of asset
Asset or any portion thereof shall be released within a period of 120 days from the date on
which the last of the authorisations for search u/s 132 or for requisition u/s 132A, as the case
may be, was executed.
No seized asset shall be retained by the Department during pendency of appeal filed by
Revenue [Naresh Kumar Kohali -vs.- CIT (P&H)]
♦ Order of assets to be applied for discharging liability
The above liability shall be discharged by applying the seized asset in the following order –
a) Money;
b) Asset other than money (as laid down in the Third Schedule).
It is to be noted that the assessee shall be discharged of the liability to the extent of the money
and asset so applied. However, Assessing Officer shall not be precluded from the recovery of
above liabilities by any other mode.
♦ Discharge of excess money
After discharging all liabilities if any assets or proceeds thereof left, then it shall be returned
to the persons from whose custody such assets were seized.
♦ Interest payable to the assessee
Where the aggregate amount of money (either seized or realized through sale of assets) seized
exceeds the aggregate of the amount required to meet the liabilities, Government shall pay
simple interest at the rate of ½% p.m. The interest shall be payable from the date immediately
following the expiry of the period of 120 days (from the date on which the last of the
authorisations for search u/s 132 or requisition u/s 132A was executed) to the date of
completion of the assessment u/s 153A.
♦ Powers to call for Information ( section 133)
The income-tax authority [being Assessing Officer, Deputy Commissioner (Appeals), Joint
Commissioner or Commissioner (Appeals)] may –
1. Require any firm to furnish him with a return of the names and addresses of the partners of
the firm and their respective shares;
2. Require any Hindu undivided family to furnish him with a return of the names and
addresses of the manager and the members of the family;
3. Require any person whom he has reason to believe to be a trustee, guardian or agent, to
furnish him with a return of the names of the persons for or of whom he is a trustee, guardian
or agent, and of their addresses;
4. Require any assessee to furnish a statement of the names and addresses of all persons to
whom he has paid in any previous year rent, interest, commission, royalty or brokerage, or
any annuity (not being any annuity taxable under the head “Salaries”) amounting to more
than Rs.1000, together with particulars of all such payments made;
5. Require any dealer, broker or agent or any person concerned in the management of a stock
or commodity exchange to furnish a statement of the names and addresses of all persons –
a) to whom he or the exchange has paid any sum in connection with the transfer of assets; or
b) on whose behalf or from whom he or the exchange has received any such sum, – together
with particulars of all such payments and receipts;
6. Require any person, including a banking company or any officer thereof, to furnish
information in relation to such points or matters, or to furnish statements of accounts and
affairs, – which will be useful for, or relevant to, any enquiry or proceeding under this Act.
Taxpoint
Where no proceeding is pending, the power u/s 133 shall not be exercised by any income-tax
authority below the rank of Principal Director or Director or Principal Commissioner or
Commissioner, other than the Joint Director or Deputy Director or Assistant Director, without
the prior approval of the Principal Director or Director or the Principal Commissioner or
Commissioner.
It is to be noted that power referred in point (6) above may also be exercised by the Principal
Director General or Director-General, the Principal Chief Commissioner or Chief
Commissioner, the Principal Director or Director or the Principal Commissioner or
Commissioner or the Joint Director or Deputy Director or Assistant Director.
2. Who can survey
The income-tax authority being Principal Commissioner or Commissioner, a Joint
Commissioner, a Principal Director or Director, a Joint Director, an Assistant Director or a
Deputy Director or an Assessing Officer or a Tax Recovery Officer or Inspector (in some
circumstances) has right to survey.
However, no action shall be taken by an Assistant Director or a Deputy Director or an
Assessing Officer or a Tax Recovery Officer or an Inspector of Income-tax without obtaining
the approval of the Joint Director or the Joint Commissioner
♦ Jurisdiction of Income-Tax Authority for conducting survey
An income-tax authority may conduct survey at –
1. Any place within the limits of the area assigned to him; or
2. Any place occupied by any person in respect of whom he exercises jurisdiction; or
3. Any place in respect of which he is authorised for the purposes of this section by such
income-tax authority, who is assigned the area within which such place is situated or who
exercises jurisdiction in respect of any person occupying such place, – where a business or
profession or an activity for charitable purpose is carried on.
♦ Power of Income Tax Authority
While conducting survey, income tax authority may exercise following power –
1. Enter in such place of business;
2. Require any proprietor, trustee, employee or any other person who may at that time and
place be attending or helping in, the carrying on of such business or profession or such
activity for charitable purpose –
a) To afford him the necessary facility to inspect such books of account or other documents
as he may require and which may be available at such place; Inspector is also considered as
income-tax authority for this purpose.
b) To afford him the necessary facility to check or verify the cash, stock or other valuable
article or thing which may be found therein; and
c) To furnish such information as he may require as to any matter which may be useful for, or
relevant to, any proceeding under this Act.
3. Place marks of identification on the books of account or other documents inspected by him
and make extracts or copies therefrom; Inspector is also considered as income-tax authority
for this purpose.
4. Impound and retain in his custody any books of account or other documents inspected by
him;
5. Make an inventory of any cash, stock or other valuable article or thing checked or verified
by him;
Record the statement of any person, which may be useful for, or relevant to, any proceeding
under this Act.
Proceeding means any proceeding under this Act in respect of any year which may be
pending on the date on which the powers under this section are exercised or which may have
been completed on or before such date and includes also all proceedings under this Act which
may be commenced after such date in respect of any year.
Taxpoint
1. Deemed place of business or profession or activity for charitable purpose is carried
on: Where the person carrying on the business or profession or activity for charitable purpose
states that any of his books of account or other documents or any part of his cash or stock or
other valuable article or thing relating to his business or profession or activity for charitable
purpose are kept, then survey shall also be conducted at that place.
2. In case where survey is for the purpose of verifying that tax has been deducted or collected
at source as per relevant provisions of the Act, in that case the income-tax authority cannot
take exercise power mentioned in point 4 and 5 (above).
2. Restriction on Income-tax Authority
An income-tax authority shall not –
1. Impound any books of account or other documents without recording his reasons for doing
so; or
2. Retain in his custody any books of account or other documents for a period exceeding 15
days (exclusive of holidays) without obtaining the approval of the Principal Chief
Commissioner or the Chief Commissioner or the Principal Director General or the Director
General or the Principal Commissioner or the Commissioner or the Principal Director or the
Director thereof, as the case may be;
3. Remove or cause to be removed any cash, stock or other valuable article or thing. d) The
place of business or profession cannot be sealed under survey – [Shyam Jewellers -vs.- CIT
(All)]
3. Time for survey
An income-tax authority may enter into –

Place where business or profession is carried During the business hours

on

In case of deemed place of business or Only after sunrise and before sunset
profession
♦ Survey of certain expenditure [Sec. 133A(5)]
1. The income tax authority (including Inspector), having regard to the nature and scale of
expenditure incurred by an assessee, in connection with any function, ceremony or event, is
of the opinion that it is necessary or expedient to do so, he may, at any time after such
function, ceremony or event, require –
Assessee, who incurred such expenditure; or
Any person, who is likely to possess information in respect of such expenditure,
– to furnish such information as he may require as to any matter which may be useful for, or
relevant to, any proceeding under this Act.
1. He may record the statements of the assessee or any other person in this regard and such
recorded statement may thereafter be used as evidence in any proceeding under this Act.
♦ Effect of non co-operation or non-compliance
If a person does not co-operate or comply during survey, the income-tax authority shall have
all the powers u/s 131(1) for enforcing compliance with the requirement made.
Inspector) may, for the purpose of collecting any information, which may be useful for, or
relevant to the purposes of this Act:
a) Enter into —Any building or place within the limits of the area assigned to such authority;
or Any building or place occupied by any person in respect of whom he exercises
jurisdiction, – where a business or profession is carried on.
b) Require any proprietor, employee or any other person who may at that time and place be
attending or helping in such business or profession to furnish such information as may be
prescribed
♦ Time for Entrance
An Income-tax authority may enter into such place only during the hours at which such place
is open for the conduct of business or profession.
♦ Restriction on Income-tax Authority
An income-tax authority shall not remove any books of account or other documents, cash,
stock or other valuable article or thing.
♦ Power to call information by Prescribed Income Tax Authority ( Sec 133 C)
1. The prescribed income-tax authority (being Principal Director General or Director General
or Principal Director or Director) may, for the purposes of verification of information in its
possession relating to any person, issue a notice to such person requiring him, on or before a
date to be specified therein, to furnish information or documents verified in the manner
specified therein, which may be useful for, or relevant to, any inquiry or proceeding under
this Act.
2. Where any information or document has been received in response to a notice, the income-
tax authority may process such information or document and make available the outcome of
such processing to the Assessing Officer.
3. The Board may make a scheme for centralised issuance of notice and for processing of
information or documents and making available the outcome of the processing to the
Assessing Officer.
♦ Power to Inspect Register of Companies ( Sec 134)
The Income tax authority [being Assessing Officer, Deputy Commissioner (Appeals), Joint
Commissioner, Commissioner (Appeals) or any other authorized person] may inspect and
take copies of any register of the members, debenture- holders or mortgagees of any company
or of any entry in such register.
♦ Power of Certain authorities ( Sec 135)
The Income tax authorities (being Principal Director General or Director General or Principal
Director or Director, the Principal Chief Commissioner or Chief Commissioner or Principal
Commissioner or Commissioner and the Joint Commissioner) shall be competent to make
any enquiry under this Act, and for this purpose shall have all the powers that an Assessing
Officer has under this Act in relation to the making of enquiries.
3. Assessment in case of Search or Requisition ( Sec 153 A)
Where a search is initiated u/s 132 or books of account, other documents or any assets are
requisitioned u/s 132A, the following provision shall be followed:
Save as otherwise provided in sec. 153A, 153B, 153C and 153D all other provisions shall
apply to the assessment made under this section also.
♦ Procedure
Notice
The Assessing Officer shall issue notice to such person requiring him to furnish the return of
income:
1. in respect of each assessment year falling within 6 assessment years immediately preceding
the assessment year relevant to the previous year in which such search is conducted or
requisition is made; and
2. for the relevant assessment year or yea
Relevant assessment year shall mean an assessment year preceding the assessment year
relevant to the previous year in which search is conducted or requisition is made which falls
beyond 6 assessment years but not later than 10 assessment years from the end of the
assessment year relevant to the previous year in which search is conducted or requisition is
made.
No notice for assessment or reassessment shall be issued by the Assessing Officer for the
relevant assessment year or years unless:
a) The Assessing Officer has in his possession books of account or other documents or
evidence which reveal that the income, represented in the form of asset, which has escaped
assessment amounts to or is likely to amount to Rs. 50 lakh or more in the relevant
assessment year or in aggregate in the relevant assessment years; ● Asset shall include
immovable property being land or building or both, shares and securities, loans and advances,
deposits in bank account.
b) The income referred above or part thereof has escaped assessment for such year or years;
and
c) The search u/s 132 is initiated or requisition u/s 132A is made on or after 01-04-2017
♦ Time limit for furnishing such return
Such return should be furnished in prescribed Form within such time, as may be specified in
the notice.
♦ Assessment of income in respect of each assessment year
Assessing Officer shall assess or re-assess the total income of each of 6 assessment years and
for the relevant assessment year or years.
♦ Treatment of pending assessment
1. Where any assessment or reassessment relating to any assessment year(s) falling in the said
period is pending on the date of initiation of the search u/s 132 or requisition u/s 132A, the
same shall abate.
2. If any proceeding initiated or any order of assessment or reassessment made has been
annulled in appeal or any other legal proceeding, then, the assessment or reassessment
relating to any assessment year which has abated, shall stand revived with effect from the
date of receipt of the order of such annulment by the Principal Commissioner or
Commissioner.
3. Such revival shall cease to have effect, if such order of annulment is set aside.
Rate of Tax
Tax rate shall be levied at the rate(s) as applicable to the respective year falling in the said
period.
♦ Assessment of Income of any other Person ( Sec 153 C)
Where the Assessing Officer is satisfied that –
1. any money, bullion, jewellery or other valuable article or thing seized or requisitioned,
belongs to; or
2. any books of account or documents, seized or requisitioned, pertains or pertain to, or any
information contained therein, relates to, a person other than the person against whom such
search or requisition is made then.
3. The books of account or documents or assets seized or requisitioned shall be handed over
to the Assessing Officer having jurisdiction over such other person; and
4. Such Assessing Officer shall proceed against each such other person and issue notice and
assess or reassess income of such other person in accordance with the provisions of sec.
153A.
Tax point
1. If Assessing Officer is satisfied that the books of account or documents or assets seized or
requisitioned have a bearing on the determination of the total income of such other person for
6 assessment years immediately preceding the assessment year relevant to the previous year
in which search is conducted or requisition is made and for the relevant assessment year or
years as referred to in sec. 153A
2. For the purpose of abatement of proceedings, the reference to the date of initiation of the
search u/s 132 or making of requisition u/s 132A shall be construed as reference to the date of
receiving the books of account or documents or assets seized or requisitioned by the
Assessing Officer having jurisdiction over such other person. [Proviso to sec. 153C(1)]
3. Where books of account or documents or assets seized or requisitioned has been received
by the Assessing Officer having jurisdiction over such other person after the due date for
furnishing the return of income for the assessment year relevant to the previous year in which
search is conducted u/s 132 or requisition is made u/s 132A and in respect of such assessment
year:
4. no return of income has been furnished by such other person and no notice u/s 142(1) has
been issued to him, or
5. a return of income has been furnished by such other person but no notice u/s 143(2) has
been served and limitation of serving the notice u/s 143(2) has expired, or
assessment or reassessment, if any, has been made
before the date of receiving the books of account or documents or assets seized or
requisitioned by the Assessing Officer having jurisdiction over such other person, such
Assessing Officer shall issue the notice and assess or reassess total income of such other
person of such assessment year in the manner provided in section 153A. [Sec. 153C(2)]
♦ Time line for Complete the Assessment u/s 153 B

Assessment Year Time Limit

Each assessment year falling within 6 Within a period of 21 months from the end
assessment years immediately preceding the of the financial year, in which the last of the
assessment year relevant to the previous year authorisations for search u/s 132 or for
in which such search is conducted or requisition u/s 132A was executed#.
requisition is made In the case where the last of the
For relevant assessment year or years authorisations for search u/s 132 or for
Assessment year relevant to the previous requisition u/s 132A was executed during the
year in which search is conducted u/s 132 or financial year 2018-19: Within a period of
requisition is made u/s 132A 18 months from the end of the financial year,
In the case of search u/s 132 in which the last of the authorisations for
In the case of requisition u/s 132A search u/s 132 or for requisition u/s 132A
 was executed
In the case where the last of the
authorisations for search u/s 132 or for
requisition u/s 132A was executed on or
after 01-04-2019: Within a period of 12
months from the end of the financial year, in
which the last of the authorisations for
search u/s 132 or for requisition u/s 132A
was executed
On the conclusion of search as recorded in
the last panchnama drawn in relation to any
person in whose case the warrant of
authorisation has been issued;
On the actual receipt of the books of account
or other documents or assets by the
Authorised Officer.
Tax point
In case of other person referred to in section 153C, the period of limitation for making the
assessment or reassessment shall be
1. The period as referred above; or
2. 9 months (18 months: in the case where the last of the authorisations for search u/s 132 or
for requisition u/s 132A was executed during F.Y. 2018-19) (12 months: in the case where
the last of the authorisations for search u/s 132 or for requisition u/s 132A was executed on or
after 01-04-2019) from the end of the financial year in which books of account or documents
or assets seized or requisitioned are handed over u/s 153C to the Assessing Officer having
jurisdiction over such other person,
whichever is later. [Proviso to sec. 153B]
Wherever reference has been given to Transfer Pricing Officer u/s 92CA, time limit in all
cases shall be increased by 12 months.
♦ Computation of limitation period
In computing the above period of limitation, following period shall be excluded —
1. Time taken in reopening the whole or any part of the proceeding or in giving an
opportunity to the assessee to be re-heard under the proviso to sec. 129; or
2. Period during which the assessment proceeding is stayed by an order or injunction of a
court; or
3. Period commencing from the date on which the Assessing Officer directs the assessee to
get his accounts audited u/s 142(2A) and ending with
4. Period commencing from the date on which the Assessing Officer makes a reference to the
Valuation Officer u/s 142A and ending with the date on which the report of the Valuation
Officer is received by the Assessing Officer; or
5. In case, where an application made before the Income-tax Settlement Commission u/s
245C is rejected, the period commencing from the date on which such application is made
 and ending with the date on which the rejection order is received by the Principal
Commissioner or Commissioner; or
6. Period commencing from the date on which an application is made before the Authority for
Advance Rulings u/s 245Q and ending with the date on which the order rejecting the
application is received by the Principal Commissioner or Commissioner u/s 254R; or
7. Period commencing from the date on which an application is made before the Authority for
Advance Ruling u/s 245Q and ending with the date on which the advance ruling pronounced
by it is received by the Principal Commissioner or Commissioner u/s 245R.
8. Period commencing from the date of annulment of a proceeding or order of assessment or
reassessment u/s 153A, till the date of the receipt of the order setting aside the order of such
annulment, by the Principal Commissioner or Commissioner; or
9. Period (maximum period of 1 year) commencing from the date on which a reference (or
first reference, if many references are made) for exchange of information is made by an
authority competent under an agreement referred to in sec. 90 / 90A and ending with the date
on which the information so requested is last received by the Principal Commissioner or
Commissioner
10. Period commencing from the date on which a reference for declaration of an arrangement
to be impermissible avoidance arrangement is received by the Principal Commissioner or
Commissioner u/s 144BA(1) and ending on the date on which a direction u/s 144BA (3) or
(6) or an order u/s 144BA(5) is received by the Assessing Officer
Note: If after immediate exclusion of the aforesaid period, the period available to the
Assessing Officer for making an order of assessment or reassessment is less than 60 days,
then such remaining period shall be extended to 60 days
Tax point
1. Where the period available to the Transfer Pricing Officer is extended to 60 days [as per
proviso to sec. 92CA(3A)] and the period of limitation available to the Assessing Officer for
making an order of assessment (reassessment or recomputation) is less than 60 days, such
remaining period shall also be extended to 60 days.
2. Where a proceeding before the Settlement Commission abates u/s 245HA, the period of
limitation available to the Assessing Officer for making an order of assessment (reassessment
or recomputation) shall, after the exclusion of the period u/s 245HA(4), deemed to have been
extended to 1 year.
 Prior approval necessary for assessment in cases of search or requisition [Sec. 153D]
No order of assessment or reassessment (in case of search or requisition) shall be passed by
an Assessing Officer below the rank of Joint Commissioner except with the prior approval of
the Joint Commissioner.
However, assessment or reassessment order may be passed by the Assessing Officer with the
prior approval of the Principal Commissioner or Commissioner u/s 144BA.
Types of customs Duties in India

While Customs Duties include both import and export duties, but as export duties contributed only
nominal revenue, due to emphasis on raising competitiveness of exports, import duties alone
constituted major part of the revenue from Customs Duties and include the following:

Basic Customs Duty

All goods imported into India are chargeable to a duty under Customs Act, 1962 .The rates of this
duty, popularly known as basic customs duty, are indicated in the First Schedule of the Customs
Tariff Act, 1975 as amended from time to time under Finance Acts. The duty may be fixed on ad -
valorem basis or specific rate basis. The duty may be a percentage of the value of the goods or at a
specific rate. The Central Government has the power to reduce or exempt any good from these duties.

Additional (Countervailing) Duty of Customs

This countervailing duty is livable as additional duty on goods imported into the country and the rate
structure of this duty is equal to the excise duty on like articles produced in India. The base of this
additional duty is c.i.f. value of imports plus the duty levied earlier. If the rate of this duty is on ad-
valorem basis, the value for this purpose will be the total of the value of the imported article and the
customs duty on it (both basic and auxiliary).

Export Duties
Under Customs Act, 1962, goods exported from India are chargeable to export duty The items on
which export duty is chargeable and the rate at which the duty is levied are given in the customs tariff
act,1975 as amended from time to time under Finance Acts. However, the Government has emergency
powers to change the duty rates and levy fresh export duty depending on the circumstances.

Auxiliary Duty of Customs

This duty is levied under the Finance Act and is leviable all goods imported into the country at the
rate of 50 per cent of their value. However this statutory rate has been reduced in the case of certain
types of goods into different slab rates based on the basic duty chargeable on them.

Cesses

Cesses are leviable on some specified articles of exports like coffee, coir, lac, mica, tobacco
(unmanufactured), marine products cashew kernels, black pepper, cardamom, iron ore, oil cakes and
meals, animal feed and turmeric. These cesses are collected as parts of Customs Duties and are then
passed on to the agencies in charge of the administration of the concerned commodities.

Education cess on customs duty

An education cess has been imposed on imported goods w.e.f. 9-7-2004. The cess will be 2% and
wef 01.03.2007 2%+1% of the aggregate duty of customs excluding safeguard duty, countervailing
duty,Anti Dumping Duty.

Protective Duties

Tariff Commission has been established under Tariff Commission Act, 1951. If the Tariff
Commission recommends and Central Government is satisfied that immediate action is necessary to
protect interests of Indian industry, protective customs duty at the rate recommended may be imposed
under section 6 of Customs Tariff Act. The protective duty will be valid till the date prescribed in the
notification.

Countervailing Duty on Subsidized goods

If a country pays any subsidy (directly or indirectly) to its exporters for exporting goods to India,
Central Government can impose Countervailing duty up to the amount of such subsidy under section
9 of Customs Tariff Act.

Anti Dumping Duty on dumped articles

Often, large manufacturer from abroad may export goods at very low prices compared to prices in his
domestic market. Such dumping may be with intention to cripple domestic industry or to dispose of
their excess stock. This is called 'dumping'. In order to avoid such dumping, Central Government can
impose, under section 9A of Customs Tariff Act, anti-dumping duty up to margin of dumping on such
articles, if the goods are being sold at less than its normal value. Levy of such anti-dumping duty is
permissible as per WTO agreement. Anti dumping action can be taken only when there is an Indian
industry producing 'like articles'.

Safeguard Duty

Central Government is empowered to impose 'safeguard duty' on specified imported goods if Central
Government is satisfied that the goods are being imported in large quantities and under such
conditions that they are causing or threatening to cause serious injury to domestic industry. Such duty
is permissible under WTO agreement. Safeguard duty is a step in providing a need-based protection
to domestic industry for a limited period, with ultimate objective of restoring free and fair competition

National Calamity Contingent Duty

A National Calamity Contingent Duty (NCCD) of customs has been imposed vide section 129 of
Finance Act, 2001. This duty is imposed on pan masala,chewing tobacco and cigarettes. It varies
from 10% to 45%. - - NCCD of customs of 1% was imposed on PFY, motor cars, multi utility
vehicles and two wheelers and NCCD of Rs 50 per ton was imposed on domestic crude oil, vide
section 134 of Finance Act, 2003. 20.3.5 Rate of duty applicable There are different rates of duty for
different goods there are different rates of duty for goods imported from certain countries in terms of
bilateral or other agreement with such countries which are called preferential rate of duties the duty
may be percentage of the value of the goods or at specified rate.