In this article, we are exploring the various dimensions of income tax law in India. Income Tax is governed by the Income Tax Act, 1961, which is amended and updated through Finance Act every year. In recent years, there have been lots of simplification of process and ease of managing income tax of individuals. But the administration is still managed by same bureaucracy and the common people still suffer from same apathy and disdain in the hands of bureaucratic machinery. Even though at the top political and governmental levels, there are genuine efforts to mitigate the hardships and minimize the corruption through use of technology. But from user perspectives, things have not moved to the desired levels. Even for the small procedural mistakes, an assessee has to go to the higher appellate levels to seek justice. This entails cost, time and unpleasant experience.
Let us start with macro issues of the income tax return filing and response to notices.
1. Lack of awareness: In India, most people are not very much comfortable using technology. They do not regularly visit the income tax website and check any notice/updates. Even if a notice is issued, they do not turn up and respond on timely basis. Meanwhile, the time for reply expires and the department do assessment on their own. They issue notices after notices but the assessee is not aware thereof. Next comes the demand and recovery stage, when the department may go for attachment of bank and property. At this stage, the assessee becomes aware and by that time, it is already late and the time of appeal may also expire soon.
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