Income Tax survey has no material impact on company, says Marico

Marico Limited, which is the parent company of the popular hair oil brand ‘Parachute’, stated here in a stock exchange filing on Thursday that “presently, there is no material impact from survey operations conducted by the Mumbai investigation wing of the Income Tax Department at Marico’s offices”.

Marico, which is led by its Chairman Harsh Mariwala, is a household name known for fast-moving consumer goods (FMCG) brands such as Parachute, Saffola, and Livon. Marico has a strong presence in both domestic and international markets, like West Asia (Middle East) and Africa.

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The company stated that proceedings are underway, and it is extending its full cooperation to the Income Tax Department.

The company’s statement came a day after as many as 200 Income Tax officials began a “surprise survey” at various Marico offices in India on Wednesday.

A surprise survey conducted under Section 133A of the Income Tax Act is different from a typical raid or search operation. Although its scope is relatively limited, the powers granted are considered significant enough to detect any potential tax evasion.

During such a surprise survey, Income Tax officials are authorised to inspect books of accounts and documents, place identification marks, and make extracts or copies.

Section 133A of the Income Tax Act does not give the Income Tax Department any authority to search and seize, unlike in a raid, a surprise survey, or an unannounced inspection of a company’s facilities. A surprise survey operation is generally done to collect information about suspected irregularities by a company.

Yet, the law enables Income Tax officials to impound books or documents, though not beyond ten working days, without the approval of the Chief Commissioner or Director General of the Income Tax Department.

If the person being surveyed declares that books or records are kept outside the business premises, Income Tax officials are also permitted to visit and survey those locations as well, as per Section 133A of the Income Tax Act.