If you get a notice due to a mismatch in your income tax return (ITR), you can now argue or explain your case online, without having to deal with the Income Tax Department in person. Further, if you have answered the department's questions satisfactorily, your ITR may not be taken up for detailed scrutiny. The Ministry of Finance issued a notification on February 22 where it said that it will be setting up a centralised communication centre, under the Centralised Communication Scheme, 2018, which will carry out this task.
As per the notification, this centre will be authorised under section 133C of the Income Tax Act, 1961 to send notices to taxpayers asking them to verify the information available with the income tax authorities.
Chetan Chandak, Head of Tax Research, H&R Block India said, "In the recently introduced Centralised Communication Scheme, 2018, the centralised communication centre will have powers to issue an e-notice (by electronic mail, or by placing a copy in the registered account on the portal) to any person. This notice will require him to furnish information or documents in his possession in machine readable (electronic) form, for the purpose of verification of information which may be useful for, or relevant to, any inquiry or proceeding under this Act. However, the procedural details are yet to be notified by the department."
Taxpayers will benefit in two ways:
1) It would save them trips to the income tax office, and
2) They will get a chance to be heard by the income tax department before proceedings begin.
How it will work
"PAN cards are issued to an individual or any other persons by the Income Tax department. Therefore, even if you don't file your ITR, the I-T department is tracking your financial transactions on the basis of your PAN. The department can send you the notices as per section 133 and 133C to furnish required information in order to assess whether your case must come under further scrutiny or not. So, if your case falls in the doubtful category, then the tax department can send you notice for filing ITR under different sections such as 142(1) or 148 etc.," said Abhishek Soni, CEO, tax2win.in, a tax filing website.
Income tax officials will have to follow certain guidelines while sending notices asking for further information from taxpayers.
a) The notice will be sent through email or by placing it on the e-filing account of the user. An SMS will be sent to the user informing him about the notice on his e-filing account.
b) The individual or his representative will not be required to personally appear at the centralised communication offices for proceedings.
c) All the documents and information to be furnished by the individual is required to be sent in specified formats. However, the format is yet to be notified by the department.
d) To ensure compliance of the notice sent, the authority can send you further emails, SMS, letters and so on, as reminders for the notice sent to you. You may even receive calls from the department reminding you about the notice sent to you.
e) The notice will be issued with a digital signature of the designated authority.
"The centralised communication centre will do the preliminary level of investigation and verification relating to any inquiry or proceeding under this Act and may make available the outcome of such processing to the Assessing Officer for further action. This is a step forward in the direction of jurisdiction-free/ face-less assessment," said Chandak.
As per the notification, this centre will be authorised under section 133C of the Income Tax Act, 1961 to send notices to taxpayers asking them to verify the information available with the income tax authorities.
Chetan Chandak, Head of Tax Research, H&R Block India said, "In the recently introduced Centralised Communication Scheme, 2018, the centralised communication centre will have powers to issue an e-notice (by electronic mail, or by placing a copy in the registered account on the portal) to any person. This notice will require him to furnish information or documents in his possession in machine readable (electronic) form, for the purpose of verification of information which may be useful for, or relevant to, any inquiry or proceeding under this Act. However, the procedural details are yet to be notified by the department."
Taxpayers will benefit in two ways:
1) It would save them trips to the income tax office, and
2) They will get a chance to be heard by the income tax department before proceedings begin.
How it will work
"PAN cards are issued to an individual or any other persons by the Income Tax department. Therefore, even if you don't file your ITR, the I-T department is tracking your financial transactions on the basis of your PAN. The department can send you the notices as per section 133 and 133C to furnish required information in order to assess whether your case must come under further scrutiny or not. So, if your case falls in the doubtful category, then the tax department can send you notice for filing ITR under different sections such as 142(1) or 148 etc.," said Abhishek Soni, CEO, tax2win.in, a tax filing website.
In cases where the I-T department has independent, individual-specific information which does not match with the person's declared income or is not reflected in his ITR, then the department will send a notice to the individual. This notice will ask the individual to explain the mismatch with documents. If the I-T department is satisfied with the documents and explanation, then the ITR may not be taken up for detailed scrutiny.
"Section 133C allows the prescribed authority to ask (a taxpayer) for the documents or any other information to compare and verify with the information available with them (Tax department). The information provided by the individual will be the deciding factor whether a further enquiry would be initiated against the said individual or not. What this means is that the information provided by you will decide whether your filed ITR will come under scrutiny or not," said Soni.
"Section 133C allows the prescribed authority to ask (a taxpayer) for the documents or any other information to compare and verify with the information available with them (Tax department). The information provided by the individual will be the deciding factor whether a further enquiry would be initiated against the said individual or not. What this means is that the information provided by you will decide whether your filed ITR will come under scrutiny or not," said Soni.
Income tax officials will have to follow certain guidelines while sending notices asking for further information from taxpayers.
a) The notice will be sent through email or by placing it on the e-filing account of the user. An SMS will be sent to the user informing him about the notice on his e-filing account.
b) The individual or his representative will not be required to personally appear at the centralised communication offices for proceedings.
c) All the documents and information to be furnished by the individual is required to be sent in specified formats. However, the format is yet to be notified by the department.
d) To ensure compliance of the notice sent, the authority can send you further emails, SMS, letters and so on, as reminders for the notice sent to you. You may even receive calls from the department reminding you about the notice sent to you.
e) The notice will be issued with a digital signature of the designated authority.
"The centralised communication centre will do the preliminary level of investigation and verification relating to any inquiry or proceeding under this Act and may make available the outcome of such processing to the Assessing Officer for further action. This is a step forward in the direction of jurisdiction-free/ face-less assessment," said Chandak.
Read more at: economictimes.indiatimes.com
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