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  7. Section 133(6) of the Income Tax Act: How to Respond to Notices, Penalty and Time Limit

Section 133(6) of the Income Tax Act

Updated on: 21 May, 2024 12:05 PM

As the financial year draws to a close, taxpayers are gearing up to file their returns. However, we are not here to simply remind you about the filing process but let us state that in the previous financial year, the Income Tax Department issued over 1 lakh notices to taxpayers suspected of underreporting or misreporting their income tax returns. The IT department has become increasingly proactive in taking action against wrongdoers. Therefore, when you submit your tax return for FY 2023-24, bear in mind that the IT department may send notices to those filing returns that raise suspicions. Let us discuss how you can respond to such notices.

Contents

What is Section 133 (6) of the Income Tax Act?

Under Section 133(6) of the Income Tax Act, officials from the Income Tax Department are authorized to summon taxpayers, making them furnish additional information or evidence in cases where there is suspicion of understated or misreported returns. Possessing investigative authority, officials can issue notices to gather necessary information.

Who can issue the notice under Section 133 (6)?

Assessing Officers, Deputy Commissioners (Appeals), Joint Commissioners, and their "Appeals" counterparts can all send these notices independently.

If no tax proceedings are currently happening, anyone below the Principal Director, Director, Principal Commissioner, or Commissioner (excluding Joint/Deputy/Assistant Directors) needs approval from a higher-up before sending a Section 133(6) notice.

This ensures proper oversight and approval, especially when things aren't already in motion. It helps everyone stay on the same page and prevents unnecessary notices.

Who can be summoned U/S 133 (6)?

The Income Tax department has broad authority to gather information during investigations and proceedings. Section 133(6) of the Income Tax Act empowers them to summon anyone who might have relevant financial records or knowledge. This means they can call upon not just the taxpayer but also banks, employers, or anyone else with crucial information.

Anyone summoned under this section is legally obligated to respond and provide the requested information or documents. Ignoring such a summons can lead to penalties and other legal trouble.

How to respond to notice U/S 133 (6)

Upon receiving a notice under Section 133(6), it is crucial to respond promptly. A delayed response may result in additional legal actions or even the imposition of penalties. Let's now explore the recommended steps for addressing and responding to such notices effectively.

  • Understand the Notice: Carefully read the notice to understand what information or documents are being requested and the deadline for response. Ignoring the notice or failing to respond within the timeframe can lead to penalties.
  • Gather Required Information: Collect all relevant documents and information mentioned in the notice. Ensure you have valid proof to support your claims.
  • Choose your Response Method: You can respond online through the Income Tax e-filing portal or submit documents in person at the department's office. Online submission is generally faster and more convenient.
  • Submit your Response: Follow the instructions provided in the notice or on the e-filing portal to submit your response and documents. You might need to choose between "Full Response" or "Partial Response," depending on whether you have all the requested information.
    • respond to notice U/S 133 (6)
    respond to notice U/S 133 (6)
    respond to notice U/S 133 (6)
  • Seek Professional Help: If you are unsure about any aspect of the notice or require guidance on preparing your response, consider consulting a Tax expert. They can ensure your response is accurate and complete, minimizing potential legal issues. You can choose our Tax Advisory Service for any tax-related questions. Book Consultation Today!

How to respond to notice under Section 133 (6) through CTN facility

The Income Tax Department portal now offers a simple option to respond to notices through the “Comply to Notices (CTN)” facility under Quick Links. The response can be submitted using the DIN (Document Identification Number) and other relevant details.

notice under Section 133 (6) through CTN facility
notice under Section 133 (6) through CTN facility

Some Taxpayers might receive notices via email that don’t show up in the E-Proceeding Tab. In such cases, the use of CTN facility ensures your response reaches the department on time and avoids potential penalties.

Penalties for not responding to notice U/S 133 (6)

Ignoring or inadequately responding to notices from the Income Tax Department can lead to serious consequences. Here's what could happen:

  • Your initial return gets deemed invalid, leading to a new notice under Section 148. This demands refiling, providing explanations for any discrepancies, and submitting additional documents within a set timeframe.
  • The ITD might ask you to file revised returns disclosing unreported income or withdrawing unsupportable exemptions/deductions.
  • Ignoring these demands attracts penalties under Section 272A(2). Penalty starts from ₹100 per day until you comply, potentially adding up to a significant amount!
  • If the investigation reveals income underreporting or false claims, you face heavier penalties:
    • Penal interest of 12% p.a. on unpaid taxes.
    • 200% penalty on evaded taxes (a hefty price for mistakes!).

Don't wait for trouble! Address Income Tax Department notices promptly with our team of tax experts. Book consultation here.

Frequently Asked Questions

Q- How many days do I have to respond to a notice under Section 133 (6)?

The provisions of Section 133(6) do not specify a framed time limit. According to this section, the income tax department has the authority to request information on accounts, matters, and opinions related to tax proceedings or inquiries at any time.

In the event that you receive a notice regarding arrears in your tax filing, immediate attention and a timely response can help address the concerns raised by the income tax department and ensure compliance with the necessary requirements.

Q- How many days do I have to respond to a notice under Section 133 (6)?

The provisions of Section 133(6) do not specify a framed time limit. According to this section, the income tax department has the authority to request information on accounts, matters, and opinions related to tax proceedings or inquiries at any time.

Q- Can I ignore income tax notice?

If you fail to respond, the income tax department has the authority to conduct an expert assessment. This allows them to assess your tax liability to the maximum possible amount. Therefore, it is in your best interest to address and timely response to any income tax notices.

Q- Is income tax notice serious?

There are two important points to remember. Firstly, receiving an Income Tax notice does not necessarily imply that you have committed a wrongdoing. It simply indicates that there is a discrepancy that the Income Tax officer is not convinced about, and they are seeking your explanation.

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CA Abhishek Soni
CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2Win.in. Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.