Now a days, it can be seen that whenever Income Tax Return filed by a person with a wrong input even a
minor one than that person gets the notice for the defective return within few hours after processing the
Income Tax Return. So how that is even possible to find out by the income tax department about the
minor mistakes for any Assessee as there are lakhs of Income Tax Return being filed in the system. The
answer for this is the Software’s working day and night for the income tax department. These software’s
do reconcile Assessee’sincome information with his bank transactions. A very latest example of the power
of the software of income tax department has seen in march 2021, as department has issued notices to
those who did not include saving bank interest income in the Income Tax Return filed for the Latest
assessment year ended and this has not ended here, the department has issued notices with the exact
penny of saving interest earned by Assessee in their bank account.
What is the Issue in getting a notice?
As long as you do not get a notice, it doesn’t matter. But whenever any income tax Notice is being issued
in the name of the Assessee and department find anything shady in that particular case, then Department
issues further notices to open previous year’s case for that particular Assessee and that will be a difficult
case for the Assessee to handle. Assessee has to approach a Professional, who will charge higher fees for
the resolving of the case as these services are a bit expensive because of very high degree of professional
due diligence and care involve. So it’s better to avoid getting any notice from income tax department.
So what are the ways by which an Assessee can avoid getting a notice from Income Tax Department?
Following are some ways by which an Assessee can file their income tax return properly so that
Department will not issue any notice and process return faster and issue refund(if any) faster.
1. Filing Return With Assistance of a professional: Now a days as the income details are prefilled in
the online income tax utility so what people do is that just hit the submit button, and file their
income tax return. But in most cases where income tax department issues notice is that, Assessee
do not include income details which are not shown in the form 26AS i.e. income transactions
appearing in bank statement but not included in the income tax return. So to avoid such issues, it
is advisable to take help of a professional who will charge a fees but will save your time and other
hassles which you might face when the income tax department will issue notice.
2. Do not hide any income Details from your Chartered Accountant or other professional: Assessee
sometimes makes mistakes of hiding income details whether intentional or unintentional from
their respective chartered accountant in thinking that it will lead in paying less taxes, but what
they don’t know is that, it might lead to the circumstances when Assessee might end up paying
all the taxes and also the penalties equal to the amount of taxes liable to pay originally as the
income tax department is very strict for tax evaders. So to avoid any such happening, always keep
all the documents which are related in filing income tax return at a safe and secure place and try
to keep such details in online cloud platforms to avoid any mishaps and also that data will be
available anytime anywhere without keeping it with yourself all the time.
3. Reconcile Bank statements with FORM-26AS: While Filing income tax return, Assessee must see
his Form 26AS beforehand, as FORM-26AS serves you the details of income on which TDS is
deducted and the income which is in the department’s notice already. So if there is any
discrepancy with Income shown in Income tax return vs. the income appearing in FORM-26AS,
then the Notice from income tax department is very much likely to be issued for the correction.
In most of the cases, the Assessee does not have sufficient knowledge regarding finding out
income details from FORM-26AS, so in that case it is very much advisable that the Assessee must
seek help of a professional (Chartered Accountant) so that, no discrepancy will be there in the
income tax return and unwanted notice from income tax department will not be issued.(Note:
The Bank Statements of all the banks hold by Assessee shall be presented with the Chartered
Accountant as Department is keeping an eye on all the banks).
4. Taking Correct Deductions under Chapter VI-A: When the income tax liability is increased, then
many times Assessee finds it easier to put some figures in the block of Deductions to decrease the
tax liability, but the department started issuing notices to those who are taking fake deductions.
Simply said, the department asks for the Proofs of the deductions taken, i.e. the slips for the
payment towards LIC Premium, Health Insurance Premium etc as in most of the cases the
Assessee does not have a valid receipt for these payments. Department then declare such
payments false and ask for the valid tax amount along with late payment, Interest and Penalties
by issuing a demand notice under section 156 of the income tax act.
To avoid such notice, Assessee must keep the receipts of the payments with him along with the
track of the transaction in the bank statement so that whenever department asks for these proofs,
they will be readily available.
After taking all the above points into consideration, even then a notice serves to you by income tax
department then you may not need to panic but need to consult a professional (Chartered Accountant)
immediately, as Notices issued by income tax department are generally to be replied within 30 days,
and if the reply does not be on time, then department passes its order ex party i.e. without discussing it
with the Assessee and which might be unfavorable for you.