Witnesses (Panchas) to the Income Tax Search

Appointment of witnesses

Before making a search of a building or a place, the Authorrised Officer is required to call upon two or more respectable inhabitants of the locality in which the building of place to be searched is situate to attend and witness the search. The term locality has to be understood in its natural meaning. It means immediate vicinity.

It is mandatory to appoint two independent witnesses before commencing conduct of search

It is a mandatory requirement and the entire search proceedings are conducted in the presence of two independent witnesses.

The Authorised Officer should issue an order under Rule 112(6) in writing to the person selected to attend and witness the search.

Text of Rule 112(6)

(6) Before making a search, the authorised officer shall,—

(a)		where a building or place is to be searched, call upon two or more respectable inhabitants of the locality in which the building or place to be searched is situate, and
(b)		where a vessel, vehicle or aircraft is to be searched, call upon any two or more respectable persons, to attend and witness the search and may issue an order in writing to them or any of them so to do.]

Text of Rule 112(7)

(7) The search shall be made in the presence, of the witnesses aforesaid and a list of all things seized in the course of such search and of the places in which they were respectively found shall be prepared by the authorised officer and signed by such witnesses; but no person witnessing a search shall be required to attend as a witness of the search in any proceedings under the Indian Income-tax Act, 1922 (11 of 1922), or the Act unless specially summoned.

It is not the right of the assessee to select witnesses of his choice

It is not the right of the assessee to select witnesses of his choice. However, in practice, selection of witnesses is made by the authorized officer with the consent of the assessee so that whole proceedings may be carried out smoothly.

Authorised officer can not forcibly require any person to act as witness

It is not possible to forcibly require any person to act as witness. However, a person refusing to act as witness without any justifiable cause, inspite of direction of the authorized officer may be prosecuted for his denial.

Selection of witnesses by the Authorised Officer

The selection of the witness is done by the Authorised Officer. While selecting witnesses, the Authorised Officer should ensure the following norms  :

(i)    The person selected as a witness should not have a bad reputation

(ii)   The person selected as a witness should be sufficiently educated to understand the process of search.

(iii)  No person with a criminal record should be appointed as a witness.

(iv)  A friend or a relative or an employee of the person whose premises are being searched should not be appointed as a witness.

(v)   The person selected as a witness should be major and a citizen of India  (Above 18 years)

(vi)  The witness should not be a business rival or a disgruntled employee or a person hostile to the person(s) in whose case the search is being carried out or the person who is in the occupation or control of the premises being searched.

(vii)  The person selected as a witness should be free from any such physical or mental infirmities as would affect his functioning as a witness 

(viii) The legal advisor or consultant of the person(s), whose premises are being searched, should not be appointed as a witness.

(ix)   Religious sentiments of the person(s) whose premises are being searched or who are in occupation or control of the premises being searched should be kept in view while selecting witnesses.

(x)    An employee of the Income Tax Department should not be selected as a witness.

KEY NOTE

Even though witnesses are to be selected by the Authorised Officer, if the person in whoes case the search is to be conducted or the person in occupation and control such premises raises any objection against selection of a particular person as a witness, the Authorised Officer should take such objection into account before taking a final decision.

Duties of a Witness

The main duties of a witness to the search are, in brief, as under:

(i)     He should read and understand the warrant of authorisation.

(ii)    He should witness the search carefully right from its commencement to its closure. His role as an independent and impartial witness demands that he carefully observes whether –

(a)    The search and seizure operations are being carried out in an orderly manner and in accordance with the law, without any interference and tampering or destruction of any evidence or valuables;

(b)   Statements on oath of persons are being recorded properly; without any undue influence or coercion;

(c)    Personal search of a female occupant is being taken only by female members of the search team with a strict regard to decency;

(d)   Facts relating to the search and seizure are being recorded correctly and accurately in the panchnama, inventories and all other relevant documents; and

(e)   In case of continuance of a search on a subsequent date, the seals are intact at the time of entry and are being broken in his presence for re-entry to continue the search.

(iii)   He should not leave the premises without the permission of the Authorised Officer. Refusal by a witness to stay till the end of the search constitutes an offence under section 187 of the Indian Penal Code. Atleast one of the witnesses should remain in the search premises throughout the duration of the search.

(iv)   He should everything before putting his signature in all document. He should affix his signature on all packets containing seized bullion, jewellery, etc. and documents and statements like, body of the warrant of Authoristion, copy of the Taxpayers’ Charter containing the rights and the duties of the persons being searched, inventories of books of account, documents and valuables, panchnama and its various annexures.

(v)    He should attend as a witness under the Act, only if and when summoned. [Rule 112(7), which provides that no person witnessing a search shall be required to attend as as witness to the search in any proceedings under the Act unless specifically summoned]

(vi)  Ensure that any untoward incident during the search, should feature in the Panchnama.

KEY NOTE

If a witness raises any objection or makes any point relating to the process or procedure of search or any matter related thereto, the leader of the search team should consider and decided the same.

Assessee is right in objecting to the witness chosen by the Assessing Officer as not belonging to the locality, and not being respectable

Respectable means impartial and independent. It could be a common man also. If it were proved that the witnesses were not respectable, it would only be an irregularity, which would reduce the weight of evidence. - [Sunder Singh v. State of UP 56 SC 411]

When the witness turns hostile

If a witness turns hostile, the Authorised officer should record his statement. He should be specifically asked to explain his conduct. The services of a hostile witness should be dispensed with. If because of one or more witnesses turning hostile, the number of witnesses becomes less than two, other respectable persons of the locality may be appointed as witnesses.

If any witness refuses to sign the panchnama or any other document

If any witness refuses to sign the panchnama or any other document, which he is required to sign, during or at the end of the search, his statement on oath should be recorded. He should be specifically asked about the reason for such refusal. The leader of the search team or any other Authorised Officer should should prepare a note describing the circumstances in which the witness refused to sign the panchnama. All the members of the search team and remaining witnesses should sign the note, which shoul be made a part of the panchnama.

Where the conduct of a person appointed as a witness found to be violation of the provisions of section 187 of IPC

In suitable cases, where the conduct of a person appointed as a witness is found to be in violation of the provisions of section 187 of the Indian Penal Code, the matter should be reported to the Control Room for exploring the possibility of launching prosecution against him.

Section 187 in The Indian Penal Code

187. OMISSION TO ASSIST PUBLIC SERVANT WHEN BOUND BY LAW TO GIVE ASSISTANCE.—

Whoever, being bound by law to render or furnish assistance to any public servant in the execution of his public duty, intentionally omits to give such assistance, shall be punished with simple imprisonment for a term which may extend to one month, or with fine which may extend to two hundred rupees, or with both; and if such assistance be demanded of him by a public servant legally competent to make such demand for the purposes of execut­ing any process lawfully issued by a Court of Justice, or of pre­venting the commission of an offence, or of suppressing a riot, or affray, or of apprehending a person charged with or guilty of an offence, or of having escaped from lawful custody, shall be pun­ished with simple imprisonment for a term which may extend to six months, or with fine which may extend to five hundred rupees, or with both.