Income Tax Return Appeals I: Notices

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Income Tax Return Appeals I

The income tax return efiling process is cumbersome if you haven’t organized your daily expenses and savings beforehand. You may end up making mistakes in field entries, miscalculate or worse, appear to withhold income from your tax assessing officer. If all goes well, you are bound to receive intimation under Section 143(1) of the Income Tax Return Act.

Income Tax Return Appeals I

Types of Notices and their Resolution

  1. Section 139(9) enjoins you to rectify and resubmit defective returns within 15 days of receiving intimation of the defect. The AO may provide you a further window by condoning the delay if you give her a valid enough reason. The notice under this section cover simple errors such as absent deductions, name mismatches or failure to mention the correct head of Income Tax Return.
    You may login to the official portal and click on the option that says, ‘In response to a notice under section 139 (9) where the original return filed was a defective return.’ Follow the process to efile your ITR after selecting the correct form as when you filed the return the first time.
  2. Section 143(1) notices inform you about either an acceptance of ITR, refund claim acceptance of outstanding tax notice. These can also be replied to under the efile tab on the I-T portal as explained above.
    You are allowed to respond within a year from the end of the relevant assessment year but timely responses ensure swift resolution. If tax is due from you, however, you have to respond within 30 days of receiving the notice.
  3. Notices under Section 143(1A) are being sent from this year to clarify information mismatches in Form 16TDS, Section 80C deductions or Chapter VIA and Form 26AS.
    Once again you must respond before the completion of 30 days from receipt. You can reply online.
  4. Issue of notice where a certain income has escaped assessment comes under Section 148 of the I-T Act. The AO will ask you to file the return again for the current assessment year and ensure that the missing income is recorded. She will then recalculate your taxes and process it for acceptance, refund or rejection.
    If the missing income is over Rupees 1 lakh the assessee must pay those taxes within 4 years of the ongoing annum and within 6 years if the amount exceeds 1 lakh.
    Responses must be supplied within 30 days of receipt.
  5. A notice under Section 143(2) or ‘scrutiny notice’ is graded at three levels depending on seriousness of error on your return. Accordingly the scrutiny may be Limited, Complete or Manual. The last is specially chosen by the AO for elaboration and requires the approval of the Income Tax Commissioner before being sent.
    You get six months from the end of the current fiscal year to find a resolution. You are required to attend any hearings when summoned. You may hire a representative to appear on your behalf. You should get all important documents, receipts and certificates in order before appearing before the AO. The tax person may accept it on the benefit of doubt, impose a penalty under Section 271(b) of Rupees 10,000 per instance or even prosecute you under Section 276D for a maximum of one year with fine. The last provision may be applied only if there has been wilful dereliction of duty to provide documents and accounts.
  6. From the 1st of April, 2018, Section 234F notices will take effect for defaults in furnishing returns of income by the due date. The fee is to Rupees 5000 for returns filed up to the 31st of December of the tax year or Rupees 10,000 otherwise. The only relief goes to incomes below Rupees five lakh annually who need not pay fees of more than Rupees 1000 for an instance.

Income Tax Return

Note that these computations can easily become quite complicated and under-reporting of turnover could result in costly penalties and tax notices. In such a situation, it makes sense to hire the services of a competent CA or financial expert. AllindiaITR is one such platform. It is owned and promoted by Corwhite Solutions Private Limited.

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