Income Tax department sends communications specifying High Value Information and seeks further information however communications seem to be partial faulty

Too much of digitisation has its ill effects and now with the communications sent by Income Tax departments after digital review of the assessees data, it seems that the ill effects are going to cost a lot to the common man. These communication are going to increase the compliance costs of many assessees and will bring more troubles for the masses who are still struggling to overcome the COVID-19’s adverse impacts. COVID-19 has played havoc with the ecomy and also have taken the jobs of many persons.

The communications from Income Tax department seem to be unwarranted at these time. If it was must, the communications should have been sent after proper review at their end.

Different communications are being sent for different types of transactions primarily High Value transactions of different nature. In this article we  will discuss with regard to the “other incomes”.

communications are being received in the following format:

Attention NAMEXXXXXXXX (PANXXXXXX), The Income Tax Department has identified high value information which does not appear to be in line with the Income Tax Return filed for Assessment Year 2020-21 (relating to FY 2019-20). Please revise ITR / submit online response under e-Campaign tab on Compliance Portal (CP). Access CP by logging into e-filing portal and clicking on ‘Compliance Portal’ link under ‘My Account’  or ‘Compliance’ tab  – ITD

After going through communication, one can easily understand that as communicated by the , department,  it has got some information with regard to High Value Transaction  from other sources pertaining to an assessee which is not in line with the Income tax returns filed with the department by that assessee.

Once any assessee  reaches at the compliance portal through My account, he is welcomed with a screen  having different Menus

A) One menu in row showing the following

1. e-campaign

2. e-Verification

3. Requests

4. Resources

5. Feedback

6. Help

B) Another menu is shown as tiles and has the following headings

1. Annual Information Statement

2. e-Campaign

3. e-Verification

4. e-Communications

5. e-Campaign history

6. e-Verification History

7. Resources

8. Insight Virtual Assistant

9. e-Verification History

c) Under e-Campaign, there are three different menus

a) e-Campaign—Significant Transactions

Certain transactions of the taxpayer reported in their ITR which have been found to be inconsistent with the information received from the third party for a specified Assessment Year are displayed to the taxpayer for feedback.

b) e-Campaign—Non-Filing of Returns

Transactions of the taxpayer who have not filed return of income for a specific assessment year and have potential tax liability or who are under obligation to file return of income, are displayed for feedback

c) e-Campaign—High Value Transactions

Certain transactions of the taxpayer reported in their ITR which have been found to be inconsistent with the information received from the third party for a specified Assessment Year are displayed to the taxpayer for feedback

The explanations as available on IT website are given above for reference

Most of the menu items under B are not working presently but the e-campagin menu shows the number of communications i.e 1 and when one opens that, a tab with name High Value Transactions gets opened up.  Within that a menu shows as Information summary and the year 2019-20 and at the bottom the specific head of c) the incoem is mentioned, in the instat case it was Other Source income.

The case which I was dealing showed an amount of approx Nine Lacs there, One should download the itemised data from there and compare the same withh the returns filed.

While performing the same activity, it came to the notice that the Income Tax Department has mistakenly summed up the transactions as shown below:

a) Itemised Interest as per 26 AS

b) Interest as shown through the TDS returns

So practically the interest was shown twice in the communications sent by the department.

A simple check could have saved lacs of assesses from undergoing the trauma of having received communication from Income Tax department.

Few issues which have come to  the fore while reviewing the communications from the Income Tax Department are:

a) Income Tax department issued notices with cross verifying at their end

b) Banks did not deduct TDS on all the Deposit accounts under the Same PAN

c) The transaction reported by the Banks to the Income Tax departments did not match with the transactions reported in the TDS returns filed by them and getting reported in the form 26AS of the assessees

d) Some time banks make wrong entries and then reverses the same in the accounts of the assessees, however the same are getting reported to Income Tax Departments through Annual Information Statements and getting reflected in the e-compliance menu for the assessees putting him under unnecessary botheration

However, these communication have a very positive impact on the way the assessees file the Income Tax Returns. Now, as most of  the transactions are getting mapped, the assessees are bound to exercise utmost caution which will on the one side increase the compliance and on the other side revenue may see an upward trend in the long run.

For handling such communications, for the relevant Previous year,

a) the assessees should generated Itemised details from the e-compliance portal

b) The data from the 26AS must be generated again

c) Itemised mapping must be done

d) The transactions can be confirmed, denied, corrected while submitting response as itemised response needs to be given.

The department has given us chance to modify the returns, if required.

Please feet free to seek any further clarification at [email protected]

Disclaimer: The article has been prepared based on the experience at the portals and it may vary from person to person. The readers are requested to go through the relevant provisions in this  regard

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28 Comments

  1. KRISHAN says:

    VERY USEFUL.
    “accrued” interest on FDs & SB along with interest paid by bank is only considered while filling the return.
    not consider accrued interest. Because the same will automatically will be accounted as and when paid/received.
    WHAT DO YOU SAY OR ADVISE.
    THANKS

  2. S Ghosh says:

    I received the same text message on 28th March late night. It appears that I need to disclose my savings account interest. I have already paid much higher tax and eligible for refund. I have submitted my concurrence on Compliance portal. Could anyone of you please suggest if I need to submit revised ITR? If yes, how to do it now? – Thanks in anticipation.

  3. veer says:

    I see double entries for Interest on FD one under “Total interest payable by a banking company (SPP)” and otherone under “Interest other than Interest on Securities received (TDS Form 26Q, Section 194A)”, do I need to select duplicate entry or correct?

    e.g.
    Interest other than “Interest on Securities” received (TDS Form 26Q, Section 194A) – 9000
    Total interest payable by a banking company (SPP) – Term deposit – 4000
    Total interest payable by a banking company (SPP) – Term deposit – 5000
    Total interest payable by a banking company (SPP) – Saving account – 2000
    I already shown 9000 file filing original ITR which was coming in 26AS.

  4. Jairam says:

    There already exists AIR for information regarding investment s, purchases of high value translation, etc. On thses basis scrutiny assessment are selected. A four five year back simillar drive was conducted by CBDT and hundreds of people were sent and explain actions called for. People were put to mercy of CAs who prepared replies and charged 1000 to 5000 for giving reply online. Very funny, very funny.

  5. Megha says:

    Under High value transaction for “Other Income source” we have to only validate the data if it is correct or not. Or do we need to fill the revised ITR again?

  6. Sidns says:

    The amount mentioned against fds is incorrect. It considers amount added into fd + amount accrued as well. How can amount which will be paid in next financial year be taxable in current year. Also the fd is still not redeemed. Is it still taxable

  7. L K Sahu says:

    I got details mail regarding high value transaction on 1st April 21. E- compiled the information on e- compliance portal on 2nd April21 and paid due taxes online on 3rd April21. But now how to file revised return. Can any guide as the assessment yr 2020-21 is over.

  8. RAYIDI SARAT BABU says:

    I received SMS on 28th March 2021 and there are some entries which I confirmed in e-compliance portal. But I can not file revised ITR, because I do not know how to pay and how much to pay tax+ Penalty.
    I got only 3 days out of which 2 days were holydays 3rd day i.e 31st March the site was not functioning normal. and now today is 3rd April 2021 .
    How do I do now?

  9. Vineet Kumar says:

    I did not get any SMS and the email came today morning i.e. 2nd April. Now I cannot even file revise ITR. They should at least intimate us a month in advance or 15 days. What is the point of sending email after the due date when you cannot even do anything.

  10. mahesh says:

    Even I got the message on 28th March 2021. After checking I found that I missed to pay the interest of one of my savings account. Then i revised my ITR and submitted it on March 29th. Now April 1st 2021 I got an email from IT department to pay the late fee u/s 234F for Rs 10000. This is insane. Late fee of more than what i paid while revising. What to do here?

  11. Nitin Jain says:

    Pls can anyone let me know the procudure to file revised ITR . as u/s 119(2)(b) or u/s 92CD. also as today being 1/4/21 .can we file revised iTR for assement year 2020-21

      1. anurag says:

        What should be done in this case ? Need to fill revised ITR after income tax notice for high value transaction but today is 2-April-2021

  12. tv raao says:

    ITD nowadays has become very friendly. There is no harm in asking for explanation for an information available with the department. Non discretion in information analysis is a good move. Given discretion it is bound to misuse. I appreciate the department.

  13. Bjawna says:

    In my case, while filing ITR 1 last year, Form 26AS did not shown any TDS on Fixed Deposit Income. So, accordingly without other income I filed my ITR-1. But now, I have received notice for high value transaction. Under E Complaince I have confirmed this transaction but I was not able to revise my ITR on 31.03.2021 also as there is no tab revision of ITR. What to do now.

  14. Shubhanshu Jaiswal says:

    I received SMS on 28th March 2021 and there are some entries which I confirmed in e-compliance portal and tried to file revised ITR yesterday. But I could not as the income tax department site got under maintenance on 31st March 2021 and now I cannot file revised return. How do I do that now as I got only 3 days time to file it and now today is 1st April 2021.

    1. Sunil Nankar says:

      I also faced the same challenge. Now, when I filled revised one it’s not accepted since due date for filing this ITR is over. Please suggest.

  15. Mayur Joshi says:

    IT department has got all details but the big question is that, why form 26AS remains vaccant? If entries from banks were there, individual will sure feed same value in ITR forms. Needs lot of homework.

  16. Divya says:

    Looks like IT dept has also considered “accrued” interest on FDs & SB along with interest paid by bank(Ex: SBI interest certificate)
    whereas 26AS forms shows only interest paid and tax deducted for interest paid .It does not consider accrued interest. So what should we do in such cases of mismatch? Which of the 5 options we should choose? Or should we consider accrued interest as well and pay balance tax?

  17. Swapnil says:

    I have a question, there are two transactions reported for me under ‘high value transactions’. One of them I have mentioned in the ITR and paid appropriate tax, other I have not. For the one which I have not mentioned in ITR, I should be choosing ‘Information is correct’ and revise the ITR BUT for the transaction which I already shown while filing the returns, what should be my response to that?

    1. M. Khullar says:

      Dear Swapnil In my view response to the txn already reported in ITR should also be same viz. Information is correct and in the revised ITR both these txns need to be reported A Tax payer

  18. S Roy says:

    Very useful and very relevant. I got a notice for sale and purchase of property which can’t be termed high value in the present market condition. In fact, I may now go for your expert advice. Thanks

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