Income Tax Notices: AIS/TIS Mismatch for FY 2022-23 – Action Guide

Information Mismatch Campaign With AIS/TIS For Financial Year 2022-23 Notices Send By Income Tax Department

Introduction

A large number of taxpayers are receiving notices from Income Tax Department regarding mismatch of information mentioned in AIS/TIS with Income Tax Return filed for F.Y.2022-23 i.e. A.Y. 2023-24. The taxpayers are receiving following messages-“Attention(XXXPK8726X)

Income Tax Department has identified certain information for FY: 2022-23, which are available on AIS. It has been observed that either the Return of Income has not been filed or if the Return of Income has been filed for the relevant FY, the same is not in line with the Information value available with the Income Tax Department. To view the Information mismatch and to submit your response, you are required to login at e-Filing portal (https://www.incometax.gov.in) and select ‘Compliance Portal’ under ‘Pending Actions’ tab. On Compliance portal home page, navigate to ‘e-Verification’ tab.”

What Does This Notice Mean?

It means there are certain transactions entered by taxpayers, the information of which is available with Income Tax Department but same has not been shown in Income Tax Return filed by taxpayer. The department is therefore requesting to either provide appropriate explanation or file Updated Return to reconcile the same.

What Should You Do After Getting Notice?

Do not panic. Forward this message or communicate immediately with your Chartered Accountant or Expert who are handling your case. They will guide you correct way to get rid of this notice.

How To Trace The Transaction For Which You Have Received Notice?

1. Under e-verification tab, you can see List of Mismatch Campaign generated.

2. Click on F.Y.2022-23

3. Under e-verification list you can see details of transactions and Overall Status as Pending

4. Click on Pending

5. You will get information about of transaction- For eg:

It means you have received notice because Income Tax Department has information that you have earned interest from deposit of Rs.1479602 but the same has not been shown in ITR filed.

Why You Are Getting Notice?

There can be many possible reasons but the most common reason is –

1. You have not shown interest income in ITR filed.

2. You have shown interest income but the same is shown under some other head of income. Normally interest on deposit is shown under the head Income from Other Sources but you have shown under the head Profit and Loss Account in Audited Balance sheet because the FDR may belong the business.

What To Do After Knowing The Transaction In Question?

The income Tax Department clearly asks you to submit the Response. Under submit your response tab, click on “Pending” under Response. One page will open regarding furnishing of explanation in which following mismatch summary is shown-

Mismatch Summary

It is observed that there is some mismatch/discrepancy in the transaction amount shown in Income Tax Return (ITR) filed by you and information available with the Income Tax Department. The feedback as provided by the Tax Payer in AIS has been considered and the Accepted by Taxpayer (B) has been updated accordingly. Please provide explanation/reconciliation for the mismatch identified.

HOW TO FILE RECONCILIATION FOR MISMATCH?

Following box will appear for reconciling the mismatch-

Reconciliation of Mismatch

How To Submit Response?

• Following are the response options available for you to reconcile the difference shown above:
  • Provide Feedback in AIS
  • Provide Explanation
• Submit the Updated ITR under section 139(8A) of the IT Act, 1961, if eligible
• Feedback in AIS can be provided by clicking on the “Provide feedback, if required” hyperlink provided against the “(B) Accepted by Taxpayer”. Once the feedback is provided in AIS the Value Accepted by Taxpayer and the difference value will get updated automatically.
• Explanation can be provided by clicking on the “Provide Explanation, if required” hyperlink provided against the “(E) Explanation for difference”. Upon providing the explanation the difference value will get updated automatically.
• In case the response is submitted with some values against “(F) Difference value for which updated ITR under section 139(8A) of the IT Act, 1961 need to be filed to avoid multiple compliances, if eligible”, then you are expected to furnish an updated return of income under section 139(8A) for the difference value.

If the transaction has already been shown in Return then enter explanation for difference. If you have not shown income under any head then you have to file Updated Return. Provide expected date of filing Updated Return and click on Submit Button to submit response.

CONCLUSION

Compliance portal is designed by Income Tax Department for taxpayers to promote voluntary compliance. The due date for filing return of income for F.Y.2022-23 was 31/07/2023 and in case of audited return due date was 31/10/2023. The last date of filing belated return or Revised Return for F.Y.2022-23 was 31/12/2023. Since the dates of filing return has been expired, the taxpayer is left with the only option to file Updated Return. The Department is therefore reconciling the information available with ITR filed and in case of discrepancies it is sending notice to either provide appropriate information or file Updated Return. In case any action is not taken by taxpayer than it will further take steps of issuing assessment notices according to certain criteria set by Department. It is therefore advisable to take immediate steps and comply with the notices.

Disclaimer: The above comments do not constitute professional advice. The Author can be reached at companyfinancialtree@gmail.com. My name is CA Divya Agrawal and I am Practicing Chartered Accountant, CEO and Founder of FINANCIAL TREE COMPANY (An online return filing and Tax Consultancy Company). Our Website is www.financialtreecompany.com. We also upload educational videos in You tube and name of our channel is FINANCIAL TREE COMPANY. Our aim is to help people in improving their financial health by spreading knowledge and love. Stay Financially Fit and Healthy.