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ends a wave of panic among the average taxpayer even though it may be a routine enquiry or even a clarification sought by the assessing officer (AO). The mere thought that the tax authorities have sent him a notice can give him sleepless nights. Since the tax department issues notices for a variety of reasons, it is not possible to suggest the course of action that the taxpayer should take in every case. Even so, here is a basic checklist of things to do when you get a tax notice:
Preserve envelope:
The envelope in which the notice is sent is an important piece of evidence. It will have the Speed Post number, which establishes when the notice was posted and served to you.
Check your details:
It is possible that the notice was meant for someone who shares your name or date of birth. Check if it has your PAN details. Go by the PAN even if there is a discrepancy in the name and address. The department issues notices according to PAN, not name.
Make copies of notice:
You can't afford to lose the notice, so make photocopies or scan and store it on your computer.
Check the validity:
A notice under Section 143(3) for scrutiny assessment has to be served within six months of the end of the financial year in which the return was filed. If served later than this period, it will be deemed invalid.
However, a notice served under Section 148 can reopen a case even up to six years from the end of the relevant assessment year if the AO has reasons to suspect income evasion. If the amount in question is less than Rs1 lakh, only up to four-year-old returns can be reopened for scrutiny.
Check sender's details:
A notice must have the name and designation of the officer, his signature, stamp, official address and should mention the income tax ward and circle.
Organise documents:
It is likely that your return has been picked up for scrutiny at random. So don't panic and compile all the documents and other information sought by the AO.
Seek professional help:
If it is just a simple demand notice for excess tax, an individual can handle it on his own. But if the matter is a little complicated, it is best to take a professional's help. You may be required to appear before the AO to explain any discrepancy in the return or make a clarification. A professional can help you organise your response so that you can provide cogent and specific clarifications.
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