Why you receive IT notices?

Actually it can be due to various reason starting from simple errors or omissions to complicated interpretation of law, Each Tax notice need to be checked and cross checked to understand the non compliance or the possible reason to receive such IT notices. Some of reasons to receive online Income tax Notices are given herewith: –
Not showing other income such as Rent, FD interest
Showing only one form 16 after a job change
Not showing Share transactions or investment in MF
Forget to show income received for one time consulting fees
Not showing property sale or purchase transactions
The proper return filing is a key to avoid such notices; with advent of technology IT department can find error and omission quite quickly as compared to earlier times. Hence the number of notices has been increased in past few years.
Under billing or over expenses
Claim of loss or low profit as compared to industry standard
Large cash transaction
Personal Expenses claimed as business expenses etc.

What kind of Business and Professionals are covered under this services?

This service is meant for handling income tax notices issued to following group of business and professionals
1) IT Notices to Small business
2) IT Notices for MSME
3) IT notices for SME
4) IT notice issued to Doctors
5) IT Notices Issued to Consultants
6) IT Notices issues to Proprietary firms
7) IT Notices Issued to Partnership Firm
8) Income tax Notices to Private limited Company
9) IT notices to Limited Liability partners (LLP)
10) IT notices to Trusts, Societies, NGOs
11) IT notice to Sailors for Foreign going ships
12) IT Notices to Non Resident Indians (NRI)
13) IT Notices to Citizen of Indian Origin (CIO card holder)

What is Intimation U/s 243(1)? Do I need to take any action?

U/s 243(1) of Income tax act 1961, a mere intimation is sent when income is processed based on information provided by you in the income tax return. It is not a notice per se. In case there is no demand or refund showing in the final calculation sent along with intimation. There is no further action is required.

What is CASS selected Scrutiny?

Income Tax Department has its own proprietary server who access data from various sources, Analyze it and red flag suspicious transactions. Department send notices to such taxpayer where server has red flagged some of the transaction. It is issued directly from head office while concerned Assessing officer is in charge to collect analyze and submit the orders.

What is a limited Scrutiny?

When Income tax office want to check only few entries or only a limited scope of income and not the all related details it is called Limited scrutiny in an Income tax return, then a limited scrutiny order is issued. For example there is a sale of house, which is not reflecting in the IT return filed by you, then a limited scrutiny order can be issued.

Can any tax consultant handle an IT Scrutiny notice?

You need to check if the Consultant who is going to reply for tax notice has handled such notices in past, and what was the outcome. Any Tax consultant who is just having knowledge of tax return filing will not able to handle the scrutiny notices properly. Here at AKT Associates, We have dedicated team lead by an expert CA to handle only scrutiny related cases. Rest assured your case would not be a trial and error for us.

How much time it takes to settle the IT notices?

It actually depends on type of Notice, and level of complexity. Some Notice which has error and omission issues can be settled with one or two reply, if documents and information asked properly supplied. While other which require many information and have multiple non disclosure takes 4-5 times documents submission
What is Notice U/s 143(2) of Income tax Act 1961?
It is also called detailed scrutiny notice. When the return filed by you is not complete or some information is missing for the purpose of Assessment then IT department issues such notices, In case IT return itself is not filed, then the IT officer will call upon to first file the return, In such case a correct and proper return should be first filed including payment of taxes.

What is Notice U/s 144 of Income tax Act 1961?

Section 144 is also known as Ex Parte Assessment, Or in simple term when you don’t reply to Income Notices or the documents and details asked, then Income Tax officer can do an Assessment and issue a demand notice as per their understanding, without even asking you further. This situation can be worse for you as you are on your back-foot as the next level is go for appeal, Which is costly and time consuming activity for a tax payer.

What is Notice U/s 148 of Income tax Act 1961?

This is also called Re-Assessment or Reopening of old years details, This section is a clear signal that Income Tax officer has in his possession some information which hints that you have purposely hidden or under reported your income. This is issued when even after your filing of return and paying Income tax, your return is not showing true and fair state of your income. This Notice can be issued upto 4 years from the end of year for which Notice has been sent

How to reply online tax notices?

You need to login into your income tax filing portal www.incomtaxindiaefiling.gov.in, with your credentials, Click on Pending for your actions, It will show pending Notice. You need to click on the Notice a tab will open,where you can fill up your response and attach the supporting documents.

What is the procedure to reply online Notice in Income tax?

After understanding the issue, all the supporting documents and information should be compiled and then a covering letter should also be attached explaining and supporting facts on which taxpayer is relying. Once submission is made, Acknowledgements for it will be shown online and itneeds to be saved and kept for future reference. In case any further follow up information is asked by Assessing Officer, The same need to be prepared/procured and produced online in time bound manner.

What can be consequences if Online tax notice not responded within timeline provided?

In such situation Assessing Officer can provoke Sec 144 for Ex parte Assessment, i.e. he will go ahead to assess the Income tax on the basis of records and details available to him, without further waiting for Assessee to submit the details online. It can adversely affect the tax liability. The Assessment U/s 144 also called Wrath of Taxman, Although there are also check and balance for Assessment U/s 144 however Any Assessment U/s 144 definitely not going to be a soft one as the AO will not assess you ruthlessly but also penalize you for not providing document and also for trying to hide information and non co-operation. Hence the IT notice should be treated with utmost urgency and should be complied with in a time bound manner.
What are course of action available once Assessment Order is passed?
If Assessment done by AO is not justificatory and Taxpayer feels that in fact it has been an Arm twisting high pitch assessment where AO has unneccesalilty taxed income. He take further action
1) Apply for Rectification with Commissioner
2) File Appeal with IT Commissioner (Appeal)