Dear readers, in past few months, a large number of notices are being issued to assessee U/s 133 (6) of Income Tax Act, 1961. Mainly notices are issued to persons that have taken excessive deductions Under Chapter –VIA, notices are being issued to them and ask them to produce the relevant documents on the basis of which these deductions are being claimed. In second number, notices are being issued to those persons, who have undertaken high value transactions against their PAN Number and they have not filed their Income Tax Return.
A high number of notices are being served under Section 133 (6) of Income Tax Act, 1961 and Section 148 of Income Tax Act, 1961 to Indian citizens who are NRI’s as of now, who have either done high value transaction in India from Indian bank account or purchased shares, mutual fund, property in India but fails to file their Income Tax return in India. In these cases, department is asking the reason for not filing of Income Tax Return and sources of Income used to done these transactions. In today’s article, we will discuss some frequently asked Question related to Section 133 (6) of Income Tax Act, 1961.
Page Contents
- What is the meaning of Notice Issued under section Section 133 (6) of Income Tax Act, 1961?
- Can the tax authorities demand information under Section 133(6) without reason?
- Can you illustrate a situation in which notice U/s 133 (6) of Income Tax Act, 1961 may be issued by Officer?
- Whether it is mandatory to submit our response against notice received U/s 133(6) of Income Tax Act, 1961?
- I am a Senior Citizen and received notice U/s 133 (6) of Income Tax Act, 1961 and I am not aware about Income Tax Law and not a tech savvy. How to respond to this notice?
- NRI in the USA: House Purchase in India and Tax Notice
What is the meaning of Notice Issued under section Section 133 (6) of Income Tax Act, 1961?
Section 133 (6) of Income Tax Act, 1961 empowers Income Tax officer with power to call information from any person in Income Tax related matters. Extract of Section 133 (6) is given below:
As per Section 133 (6) The Assessing Officer, the Deputy Commissioner (Appeals), the Joint Commissioner or [the Joint Commissioner (Appeals) or] the Commissioner (Appeals) may, for the purposes of this Act, – require any person, including a banking company or any officer thereof, to furnish information in relation to such points or matters, or to furnish statements of accounts and affairs verified in the manner specified by the Assessing Officer, the Deputy Commissioner (Appeals), the Joint Commissioner or [the Joint Commissioner (Appeals) or] the Commissioner (Appeals), giving information in relation to such points or matters as, in the opinion of the Assessing Officer, the Deputy Commissioner (Appeals), the Joint Commissioner or [the Joint Commissioner (Appeals) or] the Commissioner (Appeals), will be useful for, or relevant to, any enquiry or proceeding under this Act.
No, generally it does not happen. In general practice, Income Tax officers are issuing notices to persons on the basis of SFT Reports, AIS/ TIS Reports, Filed ITR Basis. If officer has the opinion that, on the basis of records available with him, Mr. X has escaped his Income Tax Liability, then before taking any legal action against Mr. X, notice is being issued to Mr. X u/s 133(6) of Income Tax Liability, stating about the information that is available with Income Tax department and give an opportunity to Mr. X to convey his view on the specified query raised by department.
Can you illustrate a situation in which notice U/s 133 (6) of Income Tax Act, 1961 may be issued by Officer?
Here, we discuss about Mr. A who owned a property in Delhi and let out the same to Mr. B who is working with MNC Company. Mr. B is paying rent of Rs.25000/- per Month to Mr. A and Mr. A is not filing his return. On the basis of internal sharing of information within the Income Tax department, Income Tax officer of Mr. A has the power to issue notice to him U/s 133 (6), that he is receiving rental income from Mr. B on the basis of inform available with him and ask him the reason why Mr. A has not filed his ITR.
Whether it is mandatory to submit our response against notice received U/s 133(6) of Income Tax Act, 1961?
Yes, it is close to mandatory requirement. If you do not respond to the notice, then officer has the power to impose a penalty of Rs.500/- per day. Further, case will be decided on the basis of information available with department, which in 99.99% goes against the assessee.
I am a Senior Citizen and received notice U/s 133 (6) of Income Tax Act, 1961 and I am not aware about Income Tax Law and not a tech savvy. How to respond to this notice?
In this case, age cannot be used as a safeguard for you. If you have received notice then it’s your obligation to submit your response. If you are not aware about law then you may take the help of CA/ Tax Professional. None responding of notice may be a costly affair because, if notice is issued to you, it means there is some information available with department against your PAN Number.
NRI in the USA: House Purchase in India and Tax Notice
I am an Indian citizen and residing in USA from last 10 years. As per Income Tax law, I am a Non resident of India and not generating any income from India, hence not liable to file any ITR in India. However, in last year, I have purchased a house Property in Delhi worth Rs.1 Crore from my savings in USA. Now, I have received notice U/s 133 (6) of Income Tax Act, 1961 asking about the source of this Income. Whether it is mandatory for me to give response against this notice, as I am a NRI as on date?
Yes, it is mandatory for you to give response to this notice. As you have done transaction in India against your PAN Number then it is a fit case for issuance of notice U/s 133 (6) of Income Tax Act, 1961. It is known to you that you are non resident of India from last 10 years. Unless and until you submit response against this notice, how the officer will know about the actual position and your source of Income.
Here, presentation of reply matters a lot. In many cases, it is observed that, to save banking transaction cost, NRI are using the mode of Bitcoin transaction to remit there foreign currency in India, which is not the right way of transferring funds from foreign to India.
If case is not presented and communicated to officer in proper way, then officer will treat this Rs.1 Crore, as your Income and huge tax demand will be levied against you.
Author’s Note: There are numerous questions which still are not discussed above due to time constraints but in nutshell, please note that, you must comply to all notices received under Section 133 (6) of Income Tax Act, 1961 and Section 148 of Income Tax Act, 1961. If you are not well verse about law then you must take help of professional in replying the same. Because, further query will be asked on the basis of your submissions and wrong submissions cannot be corrected at later stage.
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Disclaimer: This article is for the purpose of information and shall not be treated as solicitation in any manner and for any other purpose whatsoever. It shall not be used as legal opinion and not to be used for rendering any professional advice. The author will not be held responsible for any lose, if occur after using above information. Kindly consult your professionals before taking any action. This article is written on the basis of author’s personal experience and provision applicable as on date of writing of this article. Adequate attention has been given to avoid any clerical/arithmetical error, however; if it still persists kindly intimate us to avoid such error for the benefits of others readers. The Author “CA. Shiv Kumar Sharma” can be reached at mail –shivsharma786@gmail.com and Mobile/WhatsApp–9911303737
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