How to deal with notice received for Non-Filing of Income Tax Return ?

If you get a notice for non-filing of income tax return from compliance management cell, first you need to understand why you have received notice. After logging into your account on the e-filing portal at http://incometaxindiaefiling.gov.in, visit compliance menu where you will be able to view the details of the assessment years for which the return has not been filed and for which the third party information has been received by the ITD.

The taxpayer can choose one of the following response options:
i. ITR has been filed
ii. ITR has not been filed

If the taxpayer chooses the option that ITR has been filed then it need to provide the mode of filing the ITR (paper or e-file), date of filing the ITR and the acknowledgement number. In case the ITR is e-filed, the status will be automatically updated.

If the taxpayer chooses the option that it has not filed the ITR then it needs to choose one of the following options:
i. Return under preparation
ii. Business has been closed
iii. No taxable income
iv. Others

In case if the taxpayer chooses the option “others” then he has to mandatorily submit the remarks

If you are not registered with the e-filing portal, use the “registered yourself” link to register your PAN. The response has to be submitted electronically by clicking Compliance link after logging into the e-filing portal.

In case you have already filed your return:
If income tax return already filed update the details such as Mode of Filing (E-Filing or Paper Filing), Date of filing return, Acknowledgment Number and Circle or Ward and City.

Submit your response in compliance module if Income Tax Return has already filed
In case you have not filed return for particular assessment year:
Please update the details such as Return under preparation or Business has been closed or No taxable Income or Others. Submit your response to compliance module if return has not been filed. Further under the tab “Related Information Summary” you are required to chose of the following correct options

i. Self-Investment/ expenditure is out of exempt income: This option is to be selected if the third party information relate to investment/expenditure which belongs to the taxpayer and the same is out of income exempt from tax under Income-tax Act, 1961.

ii. Self-Investment/ expenditure is out of accumulated savings: This option is to be selected if the third party information relate to investment/expenditure which belongs to the taxpayer and the same is out of accumulated savings.

iii. Self-Investment/ expenditure is out of gifts/ loans from others: This option is to be selected if the third party information relate to investment/expenditure which belongs to the taxpayer and the same is out of gifts/loans from others.

iv. Self-Investment/ expenditure is out of foreign income: This option is to be selected if the third party information relate to investment/expenditure which belongs to the taxpayer and the same is out of foreign income.

v. Self-Income from transaction is exempt: This option is to be selected if the third party information relate to income/receipts which belongs to the taxpayer and the same is exempt under Income-tax Act, 1961.

vi. Self-Income from transaction is below taxable limit: This option is to be selected if the third party information relate to income/receipts which belongs to the taxpayer and the taxable income there from is below taxable limit under Income-tax Act, 1961.

vii. Self-Income from transaction relate to different AY: This option is to be selected if the third party information relate to income/receipts which belongs to the taxpayer and the same is taxable in a different year as per the provisions of the Income-tax Act, 1961.

viii. Self-Not Known: This option is to be selected if the third party information relate to income/receipts which belongs to the taxpayer and there is any other explanation.

ix. Other PAN: This option is to be selected if the third party information relate to another taxpayer. In this case, the PAN of such other taxpayer is to be mandatorily provided.

x. Not Known: This option is to be selected if the taxpayer has no information about the third party information.

xi. I need more information: This option is to be selected if the taxpayer knows about the third party information but needs more information to submit response
Make sure that you reply correctly, or there are chances of department asking for further information.

Submit compliance form appearing in related information summery
It is advisable to take help of tax professionals or chartered accountant before submitting information as incorrect submission will lead your case selected for scrutiny for further investigation.

It is also advisable to compute tax liability if due, pay tax and file income tax return before submitting your response. If you chose option no taxable income without explaining proper source of income for high-value transaction, department may select your case for scrutiny and send you notice u/s 148 of income Tax act for further investigation.

I don’t have taxable in income in India, but I got a notice for non-Filing of Income Tax Return from compliance Management cell.

If a person makes huge or high-value transactions there are chances of getting a notice for non-Filing of Income Tax Return from compliance Management cell. It doesn’t necessarily mean that income tax department is looking at you as a tax evader. You may be rich agriculturist deposited cash more than 10.00 Lakh into your savings bank account or you may be NRI having invested huge money in Land and end up in getting a notice for non-filing of return.

Don’t worry, if there is no taxable income than either you are liable to pay tax nor file income tax return. You are only requested to furnish your response in the compliance module on the filing portal at http://incometaxindiaefiling.gov.in. If you are not registered with the e-filing portal, use the “registered yourself link to register. The response has to be submitted electronically by clicking Compliance link after logging into e-filing portal.

What happens if no response is electronically submitted within in the time limit?
If you don’t submit a response within the prescribe limit CPC-CM may send information available with them to concerned assessing officer. With the available information, the assessing officer if he has reason to believe that any income chargeable to tax has escaped assessment, then he may take up your case for scrutiny and assess tax liability subject to other provisions of the income tax. In such case, you may end up in paying tax liability along with interest and penalty.

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