Legal Veracity of Recent E Intimation Notices By Income Tax Department on Income Disclosure; Income Tax E-Intimations Without Legal Backing: Why Taxpayers Are Questioning Their Validity; Are Recent Income Mismatch Emails Legally Valid Under Tax Law?; Why Recent Income Disclosure Intimations May Not Survive Legal Challenge; Vague Tax Intimations and Time-Barred Years: A Recipe for Litigation; Legal Risks Behind Income Disclosure Emails Sent to Taxpayers.
In recent income tax department is sending mail and msg intimations to the income tax assesses nudging them about the data mismatch between the ITR and the actual income which has already caused huge stir among the IT assesses as well as among the tax consultants not only on fear of possible undisclosed income related future departmental proceedings pertain to the past and current A.Y but also about the very nature of the said e intimations. Although finance ministry has recently clarified that these intimation are not statutory notices in nature but a mere intimations on return mismatches of many income tax assesses with regard to undisclosed income and refund claims with implicit messages to the a class of truant and dishonest assesses for rectifying their offences either by filing the revised return or by filing the updated return with payment of consequential taxes and interest as well.
Now the core issue is the legal veracity of these intimations under the IT ACT. These intimations neither contain the relevant section under which they are being sent to the assessees nor any disclosure of information save a brief remark that an investigation process is going on against the assessee. In income tax act, 1961 department is provided with wide power to investigate any suspecting monetary issues of any person or entity in any stage without any time bar u/s 133 irrespective of IT assessee or not. Therefore investigating officer or A.O can issue any verification notices not only to the person or entity under the investigation but also to any person or entity having connection with the said person or entity under the investigation. Recently legislature has by inserting a new section 135A has furthered it’s power and scope even to the extent of dispensing with u/s 148A(b) enquiry proceeding in the u/s 147 reopening cases by substituting it with e verification scheme and CBDT also issued guideline circular on dt. 13/12/2021 stipulating the due processes and authorities for exercising the said power u/s 135A/133(6). On the other hand every tax and income evasion case is fully and only governed by u/s 147 and present intimations are in letter and spirit of the mandate of section 147 on assesses failure to truly and completely disclose the actual income and financial transactions in the return filed by the assessee. E verification u/s 135A is enacted to reduce the procedural burden on the officers. But present IT ACT has no legal provision to issue such vague and confusing intimation leters to the assesses bereft of relevant section under which mandate it is being issued nor any whisper of the issue under so called investigation of the department. Only a generalized statement is apparent from these intimations leaving the assesses and consultants for guess works.
That the next vital issue is that most of these intimations contains the plausible undisclosed transactions and undisclosed income of the long back assessment years and if these assesses are subjected to the reopening proceeding u/s147 in future, the only arsenal in the department hands then most of the reopening proceedings will be quashed in the appellate stages for clearly traversing the time limit for issuing 148A/48 notices in terms of section 149.
In totality such intimations have no legal sanction and clearly invalid in law and a mere arm twisting exercise by the department to create a psychological pressure on a section of assesses for collecting the tax and interest which it can not in the legal way.
Author Bio
