Notice u/s 143(2) sent by ordinary post by IT Dept

The Income Tax Officer (I.T.O.) is empowered and has discretionery powers to enquire for each & every transactions (however small or big) for the last 8 years, which includes Bank statements, Credit card statements, Share transactions & statements, Accounts books, Receipts  & payment books etc...

I.T. notice is sent by Govt. despatch office and every despatch is registered in the despatch register. It is sent under Govt. postal stamp.  U/s 27 of the General Clauses Act, a notice sent by ordinary post is termed as "delivered" within 5 working days.

The I.T.O., is the assessment officer has discretionery powers to assess the Income Tax returns for the last 8 years.  He can assess and impose assessment tax, penalty, interest etc... based on the documents assessed by him.  His authority is final for purpose of assessment.  If you do not like his assessment order,  you have every option to "appeal"  to the  C.I.T. or the Tribunal ...

A citizen (assessee) is bound by law to preserve all such documents and produce whenever demanded by the I.T.O.  In fact same is applicable for Sales Tax, Excise, Octroi and other statutory levies & taxes.

Keep Smiling ... HemantAgarwal

the AO have power and send even ordinery post , dont ignore it. just  go and meet  the AO and  get the deatails of qurey what could be clarified. If our side is clear then y should we bather whether it come by ordinery or registerd.

so keep the mind free and make to appear

What would happen if client has changed his rented house? He won't receive this letter as its ordinary post.

Venkat Reddy :

A person is law-bound to update his residence address and business address with the statutory authorities (like I.T., S.T., Excise, Customs ... ).  Failure to do so is "concealment" or "avoidance".

Also, if your client has changed his rented house,  He won' receive ordinary post letters and for that matter he won't receive even Registered letters or Gifts.

Certain statutory laws are not in favour of the citizen (like I.T., Excise ...) They also have favour with the Govt. agencies, in most cases.

Keep Smiling ... HemantAgarwal

How much is tax (10% or 30%) for short term capital gains from equity trading for FY 2005-06?  Is it 10% or 30% ?

Any idea on above taxation structure query?

It is important to file proper reply to ITO notice, the reply you chose or not chose to give now makes the basis for any future appeale, so at most care has to be exercised. I fully agree with Mr.Hemanth Agarwal and also like to point out that there are already some information about you available with ITO in form of AIR, so be careful in what you state as it meight turn against you.

Now, assessment order is passed and is Rs 21,000 to pay including due and interest amount.

The Assessing Officer asked to come again to see if any penalty order. I understood that Assessing oficer can penalise upto 4x 21,000. Is the assessing officer expecting money from my client by threatening to impose penalty?

Yes, the A O can penalise upto 3 times for concealment and furnishing inaccurate details u/s 271 of the Income tax Act. You can file an appeal against the assessment order. give full details of the case and also the assessment order

AO has sent a letter for scrutiny us/ 143(2). Initially, 1st tax consultant for my client has mentioned to AO that there are no other income other than shown in Form-16 given by his employer. After referring to my client bank statement, AO enquired of share transactions (my client has made profit in equity trades but did not show as he mentioned that he is not aware of it, but law will not accept such unawareness) and interest paid on Savings account money. The total money to be paid is 12,000 approx and with all Education tax etc and interest it became 20,000 /-.

What should one do in such scenario? Please advise.

Dear Venkat Reddy:

As you mentioned that the notice u/s. 143(2) was served on your client in the month of Feb 2008 is invalid since the provisions under 143(2) clearly state that " no notice shall be served under clause ii of ss 2 of s.143 after expiry of 6 months from the end of the financial year in which the return is filed". Assuming that the due date of the return for F Y 2005-06 viz A Y 2006-07 is 31/07/2006, the notice has to be served on or before 30-09-2007. Hence the notice is invalid. You can challenge before the order of the A.O. In fiorst instance file a letter to the A O explaining your position. However, the A O has powers under 148 to re-open the assessment without prejudice to any other section of the Income Tax

Dear Venkat:

Ignore my above message, I need to go deep into the matter, plz wait for my next message

As you mentioned that the notice u/s. 143(2) was served on your client in the month of Feb 2008 is invalid since the provisions under 143(2) clearly state that " no notice shall be served under clause ii of ss 2 of s.143 after expiry of 6 months from the end of the financial year in which the return is filed". Assuming that the due date of the return for F Y 2005-06 viz A Y 2006-07 is 31/07/2006, the notice has to be served on or before 30-09-2007. Hence the notice is invalid. You can challenge before the order of the A.O. In first instance file aletter to the A O explaining your position.

Second assumption is that the finance act 2007 stipulates that no notice under ⁶⁴[clause (ii)] shall be served on the assessee after the expiry of twelve months from the end of the month in which the return is furnished.]

However, the A O has powers under 148 to re-open the assessment without prejudice to any other section of the Income Tax.

2nd Assumption is also in your favour, suggest you to file an appeal before CIT (Appeals) at the earliest

Vishal,

Thanks for response. We attended on the date of appointment for Penalty proceedings discussion. AO asked us to come in March as he has 6 months time to take a decision. We requested to please not to impose Penalty as we are not aware of the Tax on either Short term capital gains or savings bank interest. AO says what will if it is not taken up for Scruitiny and he will have considerable view on it.

Does it means he is expecting money (bribe) from us being an IRS officer?