The Income Tax Department's ongoing verification proceedings against US proprietary trading firm Jane Street have hit a hurdle, with the company allegedly refusing to cooperate with investigators, officials familiar with the matter said.The tax department had sought access to data and servers used by Jane Street, but the firm refused to cooperate claiming that the servers were located outside India, these officials told ET. "Their servers are located offshore, and access is being denied. The books of accounts are also maintained outside India, despite legal requirements under Indian company law to maintain them domestically," said a senior tax official, requesting anonymity. "The company has only skeleton staff in India, and they too have not been cooperating," the official added.Jane Street did not respond to an email seeking comment till press time Friday.

Given the lack of cooperation, the department on Thursday carried out a survey action at the Mumbai offices of Nuvama Wealth Management, which is Jane Street's on-ground trading partner in India. "Certain documents and electronic evidence have been seized and are being examined," a senior official said.

In a filing with stock exchanges, Nuvama confirmed the department's survey and said it is "extending full co-operation with the authorities".

The income tax department is also examining possible violations of the General Anti-Avoidance Rules (GAAR) and permanent establishment regulations by the company.

Under GAAR, the tax department can disregard any arrangement lacking "commercial substance" or structured primarily to avoid tax. It is also probing whether the firm has created a fixed place of business in India, which gives rise to tax liabilities.This development comes in the wake of the regulatory scrutiny of the company's operations in India. The Securities and Exchange Board of India on July 3 barred Jane Street from accessing capital markets, alleging that it made illegal gains of Rs 4,843.5 crore by manipulating trades in Bank Nifty and Nifty Index Options. The regulator also directed it to deposit the gains into an interest-bearing escrow account.

Sebi lifted the trading ban on July 21 after Jane Street deposited Rs 4,840 crore in an escrow account while clarifying that this action would not affect or limit its legal rights or remedies. The regulator allowed the firm to resume trading, but under close monitoring.

According to Sebi, its investigation found that while Jane Street's Indian entity executed intraday trades in the cash segment, its offshore arms-particularly in Singapore and Hong Kong-booked large profits through index options.Jane Street has denied allegations of market manipulation.