Filing income tax returns is a complex
process and no matter how much you adhere to the rules, a notice from
the tax department can easily give you some anxious moments. There can
be varied reasons for which I-T department can send a notice, but if you
get one, stay calm and then decide on the response. There are specific
sections under which you may get notice from the I-T department and you
just need to understand the purpose of such notices, and respond
appropriately within the stipulated deadline to avoid a legal action.
Types of notices and how to deal with them.
You may get a notice under Section 139 (9) if
you have filed your income tax returns (ITR) in the wrong form, there
is a difference between name mentioned in the form and PAN card, tax
amount is not fully paid, taxes are paid without mentioning the income,
and if you have claimed for tax refund without mentioning the source of
income.
Your response: On receiving such
notice, you must respond within the deadline mentioned in the letter
(Normally within 15 days of intimation). You just need to login to
website of incometaxindiaefiling.gov.in portal and go to the e-filing
section. Click on appropriate section for which you want to respond (U/s
139(9) in this case) and provide the correct information. If you do not
respond within the stipulated date, then your return will become
invalid.
Under Section 148 of Income Tax
Act, Assessing Officer (AO) has the power to assess or reassess taxable
income if there are valid reasons with strong proof to believe that
there is concealment of income or tax avoidance in a particular year.
You may get this notice if you do not mention a source of income or
calculation related to it. Notice can be served within six year period
if the amount is more than Rs 1 lakh and within four years if the amount
is less than Rs 1 lakh from the end of the concerned assessment year.
Your response: You must respond
within the specified time period by filing a return of the mentioned
assessment year, and thereafter taking further action as suggested by
your tax consultant.
You may get a notice Under Section 245 if you filed a return to claim a refund in an assessment year, but at the same time there is tax outstanding in your file.
Your response: Assessing officer
(AO) may send you notice asking to respond within specified time. If the
response is delayed beyond stipulated deadline, AO has the power to
adjust outstanding tax from the due refund amount.
The notice Under Section 143 (1) is
an intimation against the ITR filed by you stating that your return is
in line with assessment of AO. You are not required to take any action.
It may be issued for tax refund when the amount of tax paid is more than
tax liability. If the amount of tax paid is less than actual tax
liability, then you’ll get it as demand notice to pay the deficient tax
amount within 30 days of the date mentioned in the notice.
Notice Under Setion 143 (2) is
served for scrutiny by AO. It can be a manual scrutiny in which AO
selectively sends the notice, a complete scrutiny in which notice is
sent due to major discrepancies and limited scrutiny in which notice is
sent seeking clarification for minor points.
Your Response: You need to appear
in person or through your designated representative before the concerned
officer within date mentioned in the notice and provide relevant proof
to satisfy the queries raised by the officer.
When there is a mismatch between income reported in ITR and income as per 26AS, then you’ll get a notice Under Section 143 (1A) that would seek clarification for the mismatch.
Your response: You can visit the
income tax department website and log in to your account and respond to
this notice within 30 day time period. You must respond to this notice
within specified time limit to avoid further action by the IT
department.
Apart from the above mentioned notices,
you may also get a notice for reasons like high value transaction, big
investment in the name of spouse, not showing assets which are eligible
for wealth tax etc.
If you are not sure on how to respond to
the notice sent by the I-T department, then do not hesitate to hire a
tax consultant and settle the issue immediately.
(The writer is CEO, Bankbazaar.com)