How to respond to wrong Income Tax notice: A labourer in Maharashtra recently got a shock of his life when the Income Tax department sent him a notice to pay Rs 1.05 crore as income tax for the assessment year 2017-18 to the government. News agency ANI reported that daily wage labourer Bhausaheb Ahire had received an income tax notice, asking him to pay Rs 1,05,83,564 as income tax for assessment year 2017-18. The notice said that Ahire had an undisclosed amount of Rs 21,00,000 and Rs 56,81,000 as other deposits in his bank account. Shocked with the notice, Ahire told the news agency, Ï am a labourer who gets work only once or twice a week. I earn my livelihood that way. I have not seen even Rs 1 lakh in my life, how can I pay Rs 1.95 crore? This is fraudulence. Action should be taken.”
It seems, the I-T department sent a wrong notice to Ahire. But a similar incident may happen to anyone. In case you also get such a notice, there is no need to panic. Instead, you should be aware of how to respond to such wrong income tax notices. Commenting on the wrong notice to the labourer, Archit Gupta, founder and CEO, ClearTax, told FE Online, “While there is a specified online process to respond to a notice, this notice seems erroneous or perhaps there is more to it than meets the eye. He should seek help if he can from an expert. However, given that this has attracted so much media attention – the department we hope will take corrective action suo moto.”
According to Gupta, in case an individual has received a wrong income tax notice from the income tax department, he can perform the following steps for Responding to the outstanding demand:
Step 1: Log in to ‘e-Filing’ Portal with your PAN as username and password
Step 2: Go to the ‘e-file’ tab located and click on ‘Response to Outstanding Demand’.
Step 3: Click on the ‘Submit’ button under the response column.
Step 4: You can choose any of the listed responses:
• Demand is correct
• Demand is partially correct
• Disagree with the Demand
• Demand is not correct but agree for adjustment
Step 5: As the individual has received a wrong income tax demand notice, he will have to choose ‘Disagree with the demand’.
Step 6: Post the selection of the response, select the appropriate reason(s) from the drop-down list and fill all the applicable fields, upload the necessary supporting documents and ‘Submit’ the response to the income tax department.
A success message along with Transaction ID will be displayed on successful submission of the response. He can use this transaction Id to view the submitted response late on.
After submitting the response, the income tax officer might agree to your reply or might ask you to be present in person for checking the details reported by you in your income tax return. You can represent the case yourself or can hire a tax expert and authorise him to represent you. A tax expert will be a better option as he will understand, manage and respond appropriately to the tax officer. But, do respond to such notices within the stipulated time. It may lead you to further income tax departmental enquiries.