The first step you have to do when you get a notice is- Do not panic.
Everyone gets afraid of getting a notice from income tax department. Everyone panics even though the assessing officer(AO) calls for a routine enquiry or clarifications. The thought of income tax notice is enough for getting our heart get a slight stroke.
Income tax department issues notice for vide variety of reasons like asking to file tax return, intimation of processing of tax return, problem with your TDS claims etc. So, it is not possible to suggest one course of action for all situations.
But we are here to provide a basic check list to do when you receive a tax notice.
1. Keep the envelope safe: -
Keep the envelope safe in which the notice has been served. Because most of the notices must be served within due date. If failed then notices may become invalid. The envelope has the printing of the notice posted date and delivered date to you. It serves as evidence of the date receipt of notice by you.
For example, if a return is submitted on November 2, 2015, notice under section 143(3) can be served on the assessee up to Sep 30,2016. If such notice is issued on Sep 29th, 2016, but is received by the assessee after Sep 30, 2016, such notice is bad in law.
In the above type of cases, to prove that the notice has been received by you after date, envelopes will become handy.
Now-a-days all the notices have been sent through e-mail. So, notice date itself is treated as delivery date.
2. Check your details: -
Some notices of some other persons may be served to you due to sharing of same name and DOB by another person. Income notices are served based on PAN number only. So,cross-check the PAN number on the notice with your PAN number.
3. Make copies of notices: -
Always make a copy of the notice received in electronic and paper form.
4. Check the validity of the notice: -
Every notice has to be sent within a period of time. Notices served later than that are invalid. For example, a notice under section 143(3) must be served within 6 months from the end of the financial year in which the return has been furnished.
If a return is submitted on November 2, 2015, notice under section 143(3) can be served on the assessee up to Sep 30,2016. Notice issued after this date will be invalid.
5. Check the sender’s details and the date to be appeared: -
After receipt of notice, check whether notice has the name and designation of the officer along with his stamp and signature. It should also mention income tax ward and circle you are under.
If notice requires you to attend in personal, then note the address and date to be attended.
6. Organize information: -
Gather all the documents that are required to be produced as an evidence.
7. Seek professional help: -
Some notices may ask you to represent you through a professional. Even if they are not required to be always seek a professional help. Since you may not be aware of the tax department procedure and you may not be able to check all the above details also. So, it is always better to take a professional opinion and help.
8. Respond properly: -
Response to notice as early as possible is required. Because most notices require timely response. Now a days most of the responses can be done in online through income tax website
Go to your income tax account and click on the “My pending actions” tab to see the activities that require your action. If the intimation is regarding tax demands or arrears. You can go to “response to outstanding demand” tab and give your response by way of selecting options like agreeing with tax authority, disagree with tax authority or partially disagree.
Never ignore any notice from income tax department. Ignoring the notices may lead to the penalties. Always carefully read the notice and if unable to understand seek professional help. We think that notices from income tax refund is always dangerous. But some time they may be favorable like telling you about the income tax refund to you.