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Monday, December 25, 2017

Avoiding Income Tax notice by shifting residence or giving incorrect address? You can’t dodge taxmen now

For, whatever you do now, you won’t be able to escape the taxmen’s eye.

If you are among those taxpayers who enjoy dodging taxmen by shifting residence or giving an incorrect address to them, then think again. For, whatever you do now, you won’t be able to escape the taxmen’s eye. The Income Tax Department has amended the income tax rules to ensure that tax notices are sent to the concerned assessees in all possible ways. According to tax experts, Section 282
of the Income-Tax Act, 1961 provides for ways of serving communications to the taxpayers. Further, Rule 127 of the Income Tax Rules, 1962 provides for manner and address for communications to be delivered or transmitted. Rule 127(2) of the said Rules provides that the address for serving of communications could either be the one available in the PAN database or the income tax return to which it relates/last filed or the registered office as per the website of the ministry of corporate affairs.
However, there were instances where the tax department was facing issues in serving notices in cases where the address of the taxpayers was not found either because of the change in address or an incorrect address provided, resulting in treating such communications as invalid. “To avoid such instances, the Central Board of Direct Taxes, vide a notification dated December 20, 2017, has amended the said rule 127 by inserting a new proviso under sub-rule(2) which provides that where the communication cannot be delivered as prescribed, the communications shall be delivered or transmitted to the address of the assessee as available with the Banks or Post Office or Insurer or at address available in Government/Local authority records or in Form 61A (i.e. Statement of Financial Transaction [‘SFT’],” says Akhil Chandna, director, Grant Thornton India LLP.
In view of this, therefore, taxpayers need to be cautious by providing the correct address, otherwise the notices could land in the incorrect/ old address whereby taxpayers could miss their hearing/ replies to tax authorities on time, which could lead to penal consequences, informs Chandna.

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