FM pushes for Digitisation and Faster Resolution of IT Notices

Overhaul of the Income Tax department’s communication with digitisation and timelines has been finalised for notices and correspondences. Find out more about simpler tax administration.

Prompter Resolution of Income Tax Notices to be Implemented This Year

Union Finance Minister Nirmala Sitharaman announced in a press conference that from 1 October 2019, all income tax notices will be disposed within a maximum of three months from the date of reply. She further added that the existing/pending notices have to be resolved by 1 October 2019. Notices remaining unresolved beyond this date would be uploaded on the Income Tax department’s platform for tracking purposes.

The Income Tax department had earlier issued a circular stating that from 1 October 2019 it will be mandatory for all income tax letter, orders, notices etc. to carry a Document Identification Number (DIN). This step was taken to make these documents verifiable online. Any tax notice without the DIN will be considered non-existent. Tax documents will have computer-generated DINs which can be verified using the department’s e-filing portal. The department has also made it possible for the taxpayers to check the authenticity of the income tax notices. This can be done by entering the DIN, PAN, assessment year and other mandatory details in the search fields. This circular was issued by the CBDT, in which the provision of manual communication was kept open, but subject to certain conditions. Manually issued communications can be allowed only under special circumstances and with proper approval. Such exceptional cases have to be recorded on the tax department’s portal within 15 days. Thus, manual communication from the tax department, if any, will remain manual only for a maximum of 15 days. These steps will bring in more accountability and transparency into the tax administration.

Related: Income Tax Returns: Who should file them and when? 

How is the simplification of tax administration related to these decisions?

In her budget speech, the FM had stressed the need for promoting digital economy, simplification of tax administration and greater transparency. This announcement is a part of the series of steps being taken to facilitate these needs and include other initiatives such as pre-filing of ITRs, faceless e-assessment, Central cell for scrutiny etc.

Why can a taxpayer get an IT notice?

The Income Tax department can send a notice for a variety of reasons, like delay in return filing, incorrect declaration, mismatch in tax deduction claims, non-disclosure of income, defective returns, high-value transactions, as a part of scrutiny assessment, tax evasion etc.

Related: 8 Incomes you shouldn't miss while filing your IT returns 

How to respond to IT notice?

Since the duration of three months will start from the date of reply by the taxpayer, it is important that the taxpayer replies to the notice served, and in the right manner. Required documents should be furnished, errors in returns should be rectified, and if there is an additional tax demand, the same should be paid. You should respect the response time allotted to you and seek the help of an expert if necessary. In any case, not responding is not a good option and can attract penal consequences. Have a look at how to File your Income Tax Returns (ITR) Online in order to understand the filing process comprehensively.



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