UPSC Prelims Practice Questions — IT survey of posh flats: second phase in Bombay

Q1. With reference to the powers of income-tax authorities, consider the following statements comparing a 'survey' under Section 133A and a 'search' under Section 132 of the Income-tax Act, 1961: 1. While acting under a survey, the authority shall not remove books of account or other documents from the premises, whereas under a search, assets and documents may be seized. 2. A survey of a place of business may be conducted only during hours when it is open for business, whereas a search requires prior authorisation by a senior specified authority. 3. In the Bombay posh-flats operation, the instrument used against the occupants was a search under Section 132 rather than a survey. Which of the statements given above is/are correct?

  1. While acting under a survey, the authority shall not remove books of account or other documents from the premises, whereas under a search, assets and documents may be seized.
  2. A survey of a place of business may be conducted only during hours when it is open for business, whereas a search requires prior authorisation by a senior specified authority.
  3. In the Bombay posh-flats operation, the instrument used against the occupants was a search under Section 132 rather than a survey.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1 and 3 only
  • D. 1, 2 and 3

Q2. Under Section 132 of the Income-tax Act, 1961, after assets are seized and a reasonable opportunity of being heard is given, within how many days of the seizure must an order be made with the previous approval of the Commissioner?

  • A. 30 days
  • B. 60 days
  • C. 90 days
  • D. 120 days

Q3. Consider the following statements comparing India's Voluntary Disclosure of Income Scheme (VDIS), 1997 and the Income Declaration Scheme (IDS), 2016: 1. VDIS 1997 came into effect from 1 July 1997. 2. Under VDIS 1997, tax was charged at 30% for persons other than companies and firms. 3. IDS 2016 unearthed about Rs 65,250 crore of undeclared income, while VDIS 1997 yielded tax collections of about Rs 10,050 crore. Which of the statements given above is/are correct?

  1. VDIS 1997 came into effect from 1 July 1997.
  2. Under VDIS 1997, tax was charged at 30% for persons other than companies and firms.
  3. IDS 2016 unearthed about Rs 65,250 crore of undeclared income, while VDIS 1997 yielded tax collections of about Rs 10,050 crore.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1 and 3 only
  • D. 1, 2 and 3

Q4. Consider the following statements about India's voluntary disclosure/amnesty schemes: 1. VDIS 1997 came into force from 1 July 1997. 2. IDS 2016 closed at midnight on 30 September 2016. 3. Under VDIS 1997, disclosure of wealth was also allowable in addition to income. 4. IDS 2016 received 64,275 declarations. Which of the statements given above is/are NOT correct?

  1. VDIS 1997 came into force from 1 July 1997.
  2. IDS 2016 closed at midnight on 30 September 2016.
  3. Under VDIS 1997, disclosure of wealth was also allowable in addition to income.
  4. IDS 2016 received 64,275 declarations.
  • A. 1 and 2
  • B. 2 and 4
  • C. 1, 2 and 4
  • D. 3 only

Q5. Under the Prohibition of Benami Property Transactions Act, 1988 (as amended in 2016), officers of which one of the following are notified to act as the Initiating Officer, Approving Authority and Administrator?

  • A. Income-tax authorities
  • B. Enforcement Directorate
  • C. Central Board of Indirect Taxes and Customs
  • D. Central Bureau of Investigation

Q6. Consider the following statements about the Prohibition of Benami Property Transactions Act, 1988 as amended by the 2016 Amendment Act: 1. The amended Act came into force on 1 November 2016. 2. The Act empowers officers of the Enforcement Directorate to act as the Administrator for confiscated benami property. 3. The prohibition under the Act covers both movable and immovable property. Which of the statements given above is/are correct?

  1. The amended Act came into force on 1 November 2016.
  2. The Act empowers officers of the Enforcement Directorate to act as the Administrator for confiscated benami property.
  3. The prohibition under the Act covers both movable and immovable property.
  • A. 1 and 2 only
  • B. 1 and 3 only
  • C. 2 and 3 only
  • D. 1, 2 and 3

Q7. Consider the following statements about the elite Mumbai localities covered in the posh-flats survey: 1. Cuffe Parade is located in South Bombay. 2. Malabar Hill lies on the western prong of a forked peninsula separating Mumbai Harbour from the Arabian Sea and is one of the city's highest points. 3. Pali Hill is located in Bandra. 4. The Juhu–Vile Parle Development Scheme area lies in South Bombay near Colaba Point. Which of the statements given above is/are NOT correct?

  1. Cuffe Parade is located in South Bombay.
  2. Malabar Hill lies on the western prong of a forked peninsula separating Mumbai Harbour from the Arabian Sea and is one of the city's highest points.
  3. Pali Hill is located in Bandra.
  4. The Juhu–Vile Parle Development Scheme area lies in South Bombay near Colaba Point.
  • A. 1 and 2
  • B. 2 and 4
  • C. 3 only
  • D. 4 only

Q8. Marine Drive, built on the reclaimed land of Back Bay between Colaba Point and Malabar Hill, was constructed in which one of the following periods?

  • A. Before World War I
  • B. After World War I but before World War II
  • C. After World War II
  • D. During the 1970s

Q9. In the context of the Income-tax Act, 1961, the term 'survey' under Section 133A is best defined as which one of the following?

  • A. An on-site inspection in which the authority may enter business premises during business hours but cannot remove books of account or seize assets
  • B. A search operation authorised by a senior authority in which cash and documents may be seized
  • C. A reassessment proceeding initiated after concealment of income is detected
  • D. A confiscation action against benami property held in immovable form

Q10. Consider the following statements about the Central Board of Direct Taxes (CBDT): 1. CBDT is a statutory authority constituted under the Central Boards of Revenue Act, 1963. 2. The erstwhile Central Board of Revenue was bifurcated into CBDT and CBEC with effect from 1 January 1964. 3. The Chairman of CBDT is ex-officio Special Secretary to the Government of India. 4. CBDT functions under the Ministry of Home Affairs. Which of the statements given above is/are NOT correct?

  1. CBDT is a statutory authority constituted under the Central Boards of Revenue Act, 1963.
  2. The erstwhile Central Board of Revenue was bifurcated into CBDT and CBEC with effect from 1 January 1964.
  3. The Chairman of CBDT is ex-officio Special Secretary to the Government of India.
  4. CBDT functions under the Ministry of Home Affairs.
  • A. 1 and 2
  • B. 3 only
  • C. 2 and 4
  • D. 4 only

Q11. In the second phase of the Income Tax Department's survey of posh flats in Bombay, how many field squads were deployed across the elite localities?

  • A. Three
  • B. Four
  • C. Five
  • D. Six

Q12. Consider the following statements comparing the first and second phases of the Income Tax Department's Bombay posh-flats survey: 1. The first phase covered about 2,400 flats. 2. The first phase was suspended on 8 October following the announcement of a voluntary disclosure scheme. 3. Unlike the first phase, the second phase additionally targets undisclosed investment in furniture and furnishings. Which of the statements given above is/are correct?

  1. The first phase covered about 2,400 flats.
  2. The first phase was suspended on 8 October following the announcement of a voluntary disclosure scheme.
  3. Unlike the first phase, the second phase additionally targets undisclosed investment in furniture and furnishings.
  • A. 1 and 2 only
  • B. 2 and 3 only
  • C. 1 and 3 only
  • D. 1, 2 and 3