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  • Why in News- The Enforcement Directorate (ED) has initiated an inquiry into the British Broadcasting Corporation (BBC) India under the Foreign Exchange Management Act (FEMA) for suspected violations.
  • It is learnt that the agency has also asked some BBC India officials to submit the documents which it has to scrutinise as part of the proceedings. 
  • The move came about two months after the Income­Tax Department in February surveyed the Delhi and Mumbai offices of the BBC, and allegedly uncovered multiple irregularities, including non­payment of tax on certain remittances that were not disclosed to the authorities as income in India. 
  • The surveys were carried out weeks after the BBC had released a two part documentary  India: the Modi Question, related to the 2002 Gujarat riots and situation of minorities in India. 
  • About Foreign Exchange Management Act (FEMA):
  • FEMA is an enactment that deals primarily with the provisions relating to cross-border trade and payments
  • It defines the procedures, formalities, and dealings of all foreign exchange transactions in India. 
  • It was introduced in 1999 as a replacement for the earlier Foreign Exchange Regulation Act (FERA).
  • FEMA's head office is known as Enforcement Directorate (Delhi).
  • Primary objective: To help facilitate external trade and payments in India.
  • Other objectives:
  • To help orderly development and maintenance of the foreign exchange market in India.
  • To facilitate transactions involving a foreign exchange or foreign security and payments from outside the country to India only through an authorized person.
  • Applicability of FEMA:
  • It is applicable to all parts of India.
  • It is also equally applicable to the offices and agencies located outside India but managed or owned by an Indian Citizen.
  • FEMA is applicable to the following entities and transactions
  • Any citizen of India residing in the country or outside (NRI);
  • Any overseas company that is owned 60% or more by an NRI (Non-Resident Indian);
  • Any Associate Branches or subsidiaries, outside India, of companies or bodies corporate, registered or incorporated in India;
  • Exports of any goods and services from India;
  • Imports of goods and services to India;
  • Banking, financial, and insurance services provided outside India;
  • Cross-border sale, purchase, and exchange of any kind (i.e. Transfer).
  • Which Laws Confer Authority on the I-T Department to Conduct Surveys?
  • The Income Tax Department is conducting surveys at BBC offices using Section 133A of the Income Tax Act, 1961, which allows authorised officers to enter any business, profession, or charitable activity within their jurisdiction to collect hidden information.
    • This provision was added to the Act through an amendment in 1964.
  • During the survey, the officers can verify the books of account or other documents, cash, stock, or other valuable articles or things. The officers may impound and retain any books of account or other documents after recording reasons for doing so.
    • The provisions for impounding or seizing goods were introduced in the Finance Act, 2002.
  • What is the Difference Between Search and Survey Under I-T Act?
  • Search and survey are often used interchangeably, but they denote different things and have different consequences.
  • Search, defined under Section 132, can take place anywhere within the jurisdiction of the authorised officer, and it's a more serious proceeding than a survey.
    • A survey under Section 133A (1) can only be conducted within the limits of the area assigned to the officer or at any place occupied by a person under the officer's jurisdiction where a business or profession is carried out.

Surveys are conducted only during working hours on business days, whereas a search can happen on any day after sunrise and continue until the procedures are completed.