Handling Income Tax Notices form IT- Department 

Also, the IT department is currently busy tightening its noose around the black money hoarders. Therefore, a lot of taxpayers are going to be receiving these notices in the near future. 

How will you Receive the Notice from the Income Tax Department

The intimation from the I-T department would be sent on the email id provided during the e-filing of Income Tax Returns. 

If CPC is processing the returns, the sender’s email id would be: intimations[@]cpc.gov[dot]in. 

The Notice would arrive by Post to the address as per PAN details. 

Verify the address associated with the PAN number by:

• Visiting the e-filing ITR site.
• Logging in with your PAN number as the User ID and a secure password.
• Filling in your date of birth details and verifying the captcha.
• Under ‘Profile Settings’ you can then opt for the ‘PAN details’ from the dropdown menu and confirm. 

Income Tax Notices are Sent Under which sections

Five different types of Notices are send under different sections of the I-T Act of 1961. 

What to do when you Receive the Notice

First and foremost, never ignore the tax notice from the Income Tax department! 

Panicking and stressing would not help you out either. Therefore, remain calm and work out the details for complying with the Notice. 

Because non-compliance to the requirements of the notice could cost you Rs.10,000 as penalty. 

This is over and above the balance amount that you have to pay as overdue taxes and the penalty interest on paying late taxes! 

What you should do is: 

• Check your Personal Details

Verify your details on the Tax Notice, your name, address, PAN number, etc. It could be that the Notice was meant for a similarly named person! 

Especially cross-check the PAN number because the I-T notices are issued based on PAN details. 

For e-notifications, check the ‘document identification number’. It is used by the tax department for all its external communications! 

2. Check the Sender’s Details

The Notice from the Income Tax department would always have the details of the sending tax officer. 

His name, designation, stamp, signature, official address, and most importantly the income tax ward and circle, would be mentioned in the Notice. 

3. Understanding the Notice

You have to understand why you have received the Notice for the I-T department. 

4. Save the Envelope

The envelope would have the Speed Post number which can tell you when the Notice was sent to you 

This can become a crucial piece of evidence in case of any dispute 

5. Keep Copies of the Notice

This is an important communication from the tax department. Therefore, avoid losing it by making copies of it or saving its scanned image on your PC. 

6. Verify its Validity

An I-T Notice served for scrutiny assessment purposes under Section 143(3), had to be issued within 6 months of the assessment year of the financial year for which the tax returns was filed. 

Check for the validity of the Notice issued, because if served outside of those first 6 months of the assessment year, the Notice is considered invalid! 

In case the tax assessor has suspicions regarding incorrect income reporting and tax evasions, a Notice can be issued u/S 148. 

The case can be reinvestigated up to 6 years after the relevant assessment year has ended! 

If the amount under scrutiny is below Rs.100,000, than a maximum  of 4 years returns need be examined. 

What Response should you Give When you Receive an Intimation from the I-T Department

Let us present your reply to the Notices from the Income Tax department in a tabular form: 

When should you Ask for an Expert’s Advice

Not every Notice received from the I-T department needs an intervention from a certified Chartered Accountant. 

If the intimation is about simple matters like deduction amount or TDS mismatch, mathematical error, and likes, the taxpayer can respond to the I-T Notice on your own. 

But when the Notice is regarding serious matters like scrutiny or reassessment u/S 148, it is advisable that you seek a professional’s help. 

Hiring a CA to respond to your tax Notice on your behalf would be costly but the issue will be resolved in a timely and correct manner. 

But it is essential that you understand the reason for receiving the Notice, action taken on your behalf, and its implications, thoroughly. 

You cannot leave the entire matter on the CA only! 

Things to Remember

Just make sure that the response is sent within the stipulated time. Send over the information or documentation that is ready and if needed, request for some more time. 

For example, the scrutiny Notice can ask for documents like brokerage statements, rent receipts, payslips, bank statements, etc. Collecting and submitting all the documents together within the given time frame may be difficult. 

You can submit the documents you have gathered already and convey them to the I-T officer and request for a time extension. 

This would also convey your intent to comply with the demands of the department! 

Once you have collected all the relevant information, write a cover letter cataloguing all the documents that you are submitting. 

Make a few copies of the entire set. Get the copy of the cover letter acknowledged and file it for future reference and proof that the documents were duly submitted. 

For random scrutiny under Section 143(2), no specific documents are specified. In such cases, gather all the necessary documents like loan details, income information, major expense, bank statements, etc. 

In the End

Receiving an I-T Notice does not signify an end of the world scenario! You just need to stay calm and think about the steps you need to take next to respond to the Notice. 

Do not consider not replying to the Income Tax Notice because then you will be penalized further! 

You just need to consider all the factors and decide whether you will be responding to the Income Tax department Intimation on your own or will you be hiring a chartered accountant or a tax professional to handle the issue for you!

Helpful Resources: Income Tax Computation