How is Income Tax Scrutiny ITR Works, Notice Time Limit?

INCOME TAX SCRUTINY

The income tax scrutiny refers to the notice which is issued by the income tax department. The income tax officer conducts inquiries that are necessary for assessment. The main motto of the income tax scrutiny is to deduct the amount and to monitor the income as mentioned by the employee during the process of income tax returns. It monitors the income tax return file. If an individual gets a notice about the income tax scrutiny it is meant that the individual is not paying the tax on time or there are pending files that are not paid by the individual of that particular financial year or the multiple years.

Income Tax Scrutiny

The income tax scrutiny notice is sent to the individual who pays a large amount of tax or a highly salaried person who files income tax every year. The ITR returns are supposed to be paid on time. The individual who fails to pay the IT returns gets notice by the income tax scrutiny. This explains how the mange or execute the income and how to file the returns. There is a routine check-up by IT returns officers. It ensures that the department is working according to the standard protocols and norms laid by the officials to avoid further issues.

WHAT DOES INCOME TAX SCRUTINY ACTUALLY MEAN?

Income tax scrutiny is known as a notice which is issued by the income tax department if the candidate fails to pay IT returns. This is issued in-case of random cheques or deliberate attempt.

The main motto is to provide an assessment to an individual’s income and their expenditure, losses, deduction, and exemption in a financial year.

This notice defines a particular reason for scrutiny and it is issued under a particular section and clause.

THE PROCEDURE FOR INCOME TAX SCRUTINY

  • Firstly the process of scrutiny starts with getting a notice from the income tax department.
  • The officers of the department set up the inquiry procedures to get the necessary assessment.
  • The main perception is to monitor the income and deductions mentioned by the employee during the income tax return process.

OBJECTIVES OF INCOME TAX SCRUTINY NOTICE

IF AN INDIVIDUAL FAIL TO FILE INCOME TAX RETURNS

It is known to be the major reason why scrutiny notice is received by an individual as he/she fails to file an ITR for the present year or by or multiple years. In some cases there may be differences arrived in the calculations by the ITR department. There may be minute mistakes such as missing income in a particular financial year.

FLUCTUATIONS IN THE INCOME

In some cases, there may be an increase or decrease in the income of an individual. Actually, it is known to be self-explanatory. It is the duty of the officials to keep a regular check on the returns and the complete details of the income tax. Let us consider an example if the income tax return is Rs. 2 lakhs in one year to Rs. 40 lakhs in the upcoming year, it would make an alert to the IT officers who are eligible to issue a notice of scrutiny to the taxpayer.

HUGE TRANSACTIONS IN PARTICULAR YEAR

There are scenarios where there is a huge amount transacted to the account of an individual. In such cases, the income tax scrutiny notice is issued by the ITR departments. For instance, if there purchase of the house or piece of land or there is a huge transaction in the account in that particular year, then there are chances of getting income tax scrutiny.

CONFLITS OF TDS CREDIT

The notice claimed in respect of the details of the income tax department if there is a mismatch happens in TDS Credits.

Declaration of the amount of income (increase or decrease if any)

For instance, there is an increase or decrease in the income of the individual with respect to the previous year, the tax scrutiny is issued.

INCOME TAX SCRUTINY UNDER GST

There are certain risk parameters that are supposed to be checked by the GST Officer. If there is an error found by the officer, he has all the authority to issue scrutiny notice to the taxpayers.

The taxpayer is supposed to pay tax and attach with the reply before the submission of the reply with proper justification. If there is proper justification and if the officer gets satisfied by the justification the further action is taken and the proceedings get closed in the form ASMT-12.

ACTION TAKEN BY THE GST OFFICER IF AN INDIVIDUAL FAIL TO PAY TAX

  • The taxpayer who could not give proper justification or who could not pay tax.
  • The reply does not satisfy the tax officer.
  • The individual who does not reply or respond to the notice by the department.

PROCESS AFTER APPLYING SCRUTINY NOTICE

The steps mentioned below should be followed by an individual after applying the scrutiny tax.

Step 1: Visit the official website and click on the ORDERS tab

Step 2: Click on an attachment link to view the order.