“Learn how to respond to Income Tax notices under Section 133 (6) of the Income Tax Act, 1961. Explore cases, requirements, and key points for effective replies. Don’t risk penalties; understand the process and ensure compliance. Read more on taxguru.in.”
Dear readers, as we all know in the past few years, Income Tax department has changed there working style dramatically and now they are using data anaylytical tools and artificail intelligence to expand there taxpayer base. They are using SFT Information vary effectively to catch tax avoiders. They are analysing our Income Tax filed details with the information available with them and raising income tax demands within specified time period.
Now, they are using power given to them by Section 133 and Section 148 of Income Tax Act, 1961. They are sending Income tax notices U/s 133 (6) and Section 148 of Income Tax Act, 1961 in cases where income tax return has not been filed. In the past few months, notices has been sent to many NRI’s person under above sections, who are generating income from India in the form of Bank Interest, Rental Income, Capital Gain transactions but has not filed any income tax return and not paid any taxes here. On Section 148 of Income tax Act 1961, I have aleady written an article earlier which can be assessible from here https://taxguru.in/income-tax/section-148-income-tax-act-1961-notice-reply.html
In Today’s article we will discuss about Section 133 (6) of Income Tax Act, 1961 (Power to call for information)
As per Section 133 (6) The Assessing Officer, the Deputy Commissioner (Appeals), the Joint Commissioner or 41[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 42[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 42[the Joint Commissioner (Appeals) or] the Commissioner (Appeals), will be useful for, or relevant to, any enquiry or proceeding under this Act:
Notice U/s 133 (6) of Income Tax Act, 1961 can be issued to assessee himself for his own case or can be received to get information about other PAN Holder case who has mentioned your PAN Number stating that a specified transaction has been done with you. To get more information or get confirmation about that specified transaction, a notice may be issued to you. For example Mr. B has shown that he has purchased goods from Mr.A for Rs.10,00,000/- and Mr. B case is selected for Scrutiny, to get confirmation about this transaction the AO has the power to call information u/s 133 (6) from Mr. A stating that kindly provide ledger/ details of all transactions done with Mr. B during the specified period.
Please note that, it is mandatory to submit reply for all information asked U/s 133 (6) of Income Tax Act, 1961. In case of default the Assessing Officer has the power to levy penalty on you, for not responding the Notice issued U/s 133 (6).
Now, we will discuss a case, where Notice U/s 133 (6) of Income Tax Act, 1961 has been issued to the assessee himself. For example Mr. ABC is Indian citizen and resident for F.Y -2019-20. During the F.Y-2020-21 he leaves India to render his professional services in Canada. He starts receiving funds for rendering services in Canada in Indian Bank Account and he incurred all business expenditures in Canada using Debit and Credit card issued from Indian Bank. Now, his all foreign transactions/ expenditure incurred by him in Canada has been reported as foreign Expenditure in SFT Reports as submitted by Indian Banks to Income Tax Department.
As the person is rendering services outside India, he ignores the Income Tax Return Filing in India. Now, in current year, Income Tax department issued Notice to Mr.ABC U/s 133 (6) of Income Tax Act, 1961, to submit his all Bank statements/ Credit Card statement showing the transactions incurred in Foreign Country and the source of Income of Income from where these expenditues are incurred. Here, Mr. ABC has to submit his response within 15 days explaining the reason why he has not filed his Income Tax Return in India and submit all the required information with Income Tax Officers within specified time period. Non submission of information may lead to penalty imposed by Assessing Officer.
Here, drafting of reply and its presentation matters a lot. On the basis of above reply the Officer will analyse your case and if he not satisfied with your reply, then Notice U/s 148 of Income Tax Act 1961, may be issued or case may selected for Scrutiny also.
Here Key points to consider why giving the reply U/s 133 (6) of Income Tax Act, 1961 are here below:
> Read the Notice Carefully and analyse the reason for Issuance of Notice
> Determine the Residential Status of NRI
> Gatther information about all sources of Income earned during the year
> Arrange all the information as required in Notice
> Submit all the information within specified time period
> If any information as showm in compliance portal/ notice does not belongs to you, reject the same immediately
> Above example is an illustration, reply of each notice vary on case to case basis. If you are aware about law, then submit reply online otherwise take the help of your professional. Wrong submission may invite Scrutiny and penalty Notice.
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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