Herald: How to tackle notices received from Income Tax Department

How to tackle notices received from Income Tax Department

10 Jun 2019 04:22am IST

Report by
Prabhu Verlekar

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10 Jun 2019 04:22am IST

Report by
Prabhu Verlekar

Income tax returns are required to be filed electronically by selecting correct ITR Form after making proper admissible expenditure claims in designated fields with reference to the Income tax sections along with particulars of tax payment made during the year. These returns are automatically processed at Central Data Centre after collating and cross-tallying with the data of the bank accounts and investments reported to Data Centre on the basis of PAN. In case of discrepancies or mis-matches, different types of notices are triggered and send to tax payers for compliances.

I am giving below list of various notices that can be issued and how to respond them 

Section 139(9) 

You will get notice under this section for defects in filing of tax return such as wrong ITR Form, not paying entire tax due as return filed, not declaring income against TDS made, mismatches of name or pan-card number. There no time limit to serve this notice. You should respond with 15 days of date of intimation otherwise your tax return filed will be invalid. You can ask for extension of time if necessary.


Section 143(1) 

This notice is an intimation send after processing the return filed by you. This Intimation/Notice is of three types. It will state that the income disposes and taxes paid are accepted, in this case no action is required. If there is refund due on account of excess tax paid the refund cheque will automatically be credited to your designated bank account incase refund is not credited for any reason you should write to income tax officer giving correct bank account. The intimation can also resort in tax demand on account of disallowances of apparent wrong claims. In this case you should pay the amount within 30 days. If you dispute the adjustment, application for rectification under section 154 should be filed within 30 days.

This Intimation has to be issued before expiry of one year for the end of financial year in which the return is filed.


Section 143(1)(a)

This is communication for the purposes of adjustment on account of discrepancies noticed in income declared in ITR or Form no. 16 (salary certificate), claims for deduction under section 80C etc, difference in tax amounts as specified in Form No- 26AS. You should respond to this notice within 30 days by login to tax filing portal and give explanation for discrepancies and upload the supporting documents through e-processing section.


Section 143(2) 

This notice is sent for scrutiny assessment of the tax   return filed within 6 months from the end of the financial year in which the return is filed and for this the assessment has to be completed within one year. 

This scrutiny assessment is of three types. Limited scrutiny on account of random selection of your case under Computer Assisted Scrutiny Assistant (CASA) for discrepancies highlighting one or two cases. Second is full-fledged detailed scrutiny on account of serious discrepancies noticed in the tax return filed as per CASA. The third case is of manual scrutiny in which your case is handpicked by assessing officer on the basis of discrepancies noticed in data information available with Department of cross verification of data of other tax payer cases or other important information available with the tax department. This notice can be sent only with the approval of Commissioner of Income Tax. In such scrutiny assessment, you required to appear before the tax assessment officer either in person or through authorized representative on the date specified in the notice along with books of accounts after uploading supported documents online. If you fail to appear this may result in ‘Best Judgment Assessment’ or there can be penalty of rupees ten thousand u/s 271(1)(b) or prosecution u/s 276D with or without fine.


Section 148

This notice is sent if the income has escaped assessment or calculation. This notice is required to be send within a period of four years from the end of the assessment year if the amount is rupees one lakh or less and within 6 years if amount is more than one lakh. You should respond to the notice by filing correct tax return within 30 days or within time specified in the notice.

There is no need for tax payer to get panicky if any notice is received from income tax department. Try to understand its implication and approach your tax consultant to comply with the notice within specified time. Negligence can cost heavily.
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