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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.
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.
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.
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.
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.
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.
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.
Ignoring or inadequately responding to notices from the Income Tax Department can lead to serious consequences. Here's what could happen:
Don't wait for trouble! Address Income Tax Department notices promptly with our team of tax experts. Book consultation here.
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.
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.
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.
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.
