High Value Transactions Notices: What can be done now as income tax return could not be revised

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High Value Transactions Notices:

What can be done now as income tax return could not be revised

First, what this high value transactions issue is all about.

The Income Tax Department has started an e-campaign on voluntary compliance of Income Tax for the convenience of taxpayers. The e-campaign ending on 31st March has been started with following target:

  1. To identify the Non-filers of Income Tax Return or
  2. To identify income tax return filers who have filed the return but not fully disclosed all the income/investment.

The message or email from Income Tax department was send for High Value Transaction and mainly was compiled for following reasons:

  1. High Value Transactions e.g. Share Trading/Derivatives
  2. Non Reporting of FDR Interest or saving Bank Account
  3. High Value Cash Deposit in the saving or current account
  4. High value investment in the property
  5. Frequent foreign remittances
  6. High business turnover

How the department got the information?

There are various returns and sources from which the department is getting the information of high value transactions. The major source of this informations are

  1. Statement of Financial Transactions (SFT)
  2. Tax Deduction at Source (TDS)
  3. Tax Collection at Source (TCS)
  4. Foreign Remittances (Form 15CCB) etc.
  5. Data from the GST returns filed by the taxpayers

SFT as referred above provides the data of Property transactions, Mutual Fund investments, Shares investment, credit card transactions, cash deposits/ withdrawals from bank, etc.

How to respond to the notice:

The above notice is required to be responded at the Compliance portal of the department. Compliance portal is the dedicated portal operationalized under Project Insight to enable e-verification (i.e. capture of response on specific compliance related issues in a structured manner) for effective compliance monitoring and evaluation.

The income-tax department has started to reach out to certain taxpayers who have either not filed income-tax returns (ITR) or failed to accurately report high-value transactions in their returns. Objective of the e-campaign is to facilitate taxpayers to validate their financial transaction information against information available with the IT department and promote voluntary compliance, especially for the assessee for the FY 2019-2020 (AY 2020-21) so that they do not need to get into notice and scrutiny process. Department has started sending SMS & Emails to such taxpayers about e-campaign on High Value Transactions on Compliance Portal.

The mail forwarded by the department provides the reasons for issue of the notice and the mode of responding to the notice as well. The mail is on the following line:

 

***** ****** ****** (Assessee Name)

(XXXXX1111X)

DIN: INSIGHT/CMP/01/2020-21/**************
Date: **********
Assessment Year: 2020-21
Financial Year2019-20
#FacelessAssessment
#FacelessIncomeTax

 

 

Why are you receiving this communication?
We appreciate that you have filed your Income Tax Return and contributed towards the progress of Nation. However, the Income Tax Department has received information on high value transactions relating to XXXXX1111X for Financial Year 2019-20. On the basis of data analysis, the Income Tax Department has identified following high value information which does not appear to be in line with the Income Tax Return filed for Assessment Year 2020-21 (relating to FY 2019-20):

 

·  Total interest payable by a banking company (SPP)- ******

The objective of this campaign is to validate above information and promote voluntary compliance.

What steps should you take?
LOGIN Compliance portal
VIEW Information Details
UPLOAD Return
Login to the e-filing portal (https://incometaxindiaefiling.
gov.in) and click on the ‘Compliance Portal’ link available in ‘My Account’ to navigate to Compliance portal (https://compliance.insight.gov.in)
Click on the ‘e-Campaign – High Value Transactions‘ tab to view information details. Please submit online response by selecting among the following options on Compliance Portal:

·  Information is correct

·  Information is not fully correct

·  Information related to other Person/ Year

·  Information is duplicate/ included in other displayed information

·  Information is denied

In case there is a need to file revised return, please upload the revised return on e-filing portal after paying due taxes.
How to submit response on displayed information?

Following response can be submitted for displayed information on Compliance Portal:

Option A: Information is correct

This option should be selected if the information belongs to the Taxpayer and all the attributes of the Information are correct.

Option B: Information is not fully correct

This option should be selected if the information belongs to the Taxpayer but all the attributes of the Information are not correct. Upon selecting this option, relevant information fields will be displayed to the taxpayer and taxpayer will be able to update correct information details. e.g.- Account number, Information value, etc.

Option C: Information relates to other person/year

This option should be selected if the Taxpayer is aware of the Information, but it belongs to other person or year e.g. such instances may arise due to joint ownership of property or joint holding of accounts or other assets. The taxpayer will be able to provide correct and complete information of other person(s) to whom the Information pertains (i.e. PAN, relationship, FY etc).

Option D: Information is duplicate/included in other displayed information

This option should be selected if the information displayed is already included in any other information or it may be a duplicate information. Taxpayer needs to select the duplicate Information and click on submit button.

Option E: Information is denied

This option should be selected if the Taxpayer completely denies the information displayed.

What happens if the information is denied or modified in the feedback?

Your feedback will be shared with the source which provided the information for their comments/response. In the event of you providing wrong response, consequences under the provisions of the Income Tax Act, 1961, will follow.

What is the last date for revising Income tax return?

The last date for revising Income tax return for Assessment Year 2020-21 (relating to FY 2019-20) is 31st March 2021.

What happens if you do not file return or submit response?

If you do not revise return by due date or submit response on information, proceedings under the Income Tax Act, 1961, may be initiated to determine your income and tax liability.

 

As far as above mail and messages are concerned, the following points may be noted:

  1. If the information is not getting displayed, taxpayer may raise grievance under Communication Category to “E-filing Website Team” on e-Nirvan (attach screenshot of SMS/Email & e-campaign window showing no data).
  2. The SMS/Email has been send even after processing of my ITR & intimation already received u/s.143(1). As the information regarding High Value Transaction might be reported to Department after Processing of ITR, the present mail/SMS is forwarded.
  3. The information given in the mail/SMS is already incorporated in the ITR, assessee may confirm the transaction as “correct” in the compliance portal.
  4. Under the e-campaign the taxpayers will be able to access details of their high value transaction related information on the designated portal. They will also be able to submit online response by selecting among any of these options:
    (i) Information is correct,
    (ii) Information is not fully correct,
    (iii) Information related to other person/year,
    (iv) Information is duplicate/included in other displayed information, and
    (v) Information is denied.
  5. A taxpayer who is having total income above the prescribed limit or fulfils any other condition mentioned in section 139 of the Income Tax Act 1961, is required to file return of income. If ther eturn is not filed by such person then they are treated as Non-filers. Such person with potential tax liabilities are identified by analysing information received under Annual Information Return (AIR), Statement of Financial Transactions (SFT), Centralised Information Branch (CIB), TDS/TCS Statement, Securities Transaction Tax (STT) etc. and taxpayer profile and the notices are issued to such non filers.

How to comply with the above notices?

BY following the below mentioned steps, taxpayers can comply with the above notice:

Step 1: Visit Compliance Portal at https://compliance.insight.gov.in or Login to the e-filing portal by using the URL https://incometaxindiaefiling.gov.in and Click on ‘Compliance Portal’ link available in “My Account” or “Compliance” tab.

Step 2: After successful login, click on ‘e-Campaign’ Tab available at home page of Compliance Portal to view Information Summary screen.

Step 3: Click on “Financial Year” under Significant Transactions/Non- Filing of Return/High Risk Transactions option (Whichever is applicable).

Step 4: Click on ‘Financial Year’ available under ‘e-Campaign –Information Confirmation’. (Applicable for non-filing of return).

Step 5: Click on “>” button to view information detail.

Step 6: Click on “View Response” button under Information detail.

A Pop-up window will appear displaying the details of response submitted by the taxpayer.

What if the taxpayers notices that the return filed is erroneous as certain information / income was not incorporated and the date of revising the income tax return is over now?

  1. The SMS/ Email has been forwarded to the taxpayers so as to enable them to rectify the mistake by filing the revised return.
  2. The last date to revised the return for the FY 2019-20 was 31/03/2021.
  3. Due to short time at the end of the assessee, lot many taxpayers could not revised the return till 31/03/2021 and want to know what should be done in such cases? Even those taxpayers who were trying to file the revised return on 31st March 2021 were facing the trouble in revising the return as the server was over burdened and the site was not at all working.

Options in such cases:

  1. Taxpayers may compute the revised income and may make the payment of tax with interest as a precautionary measure.
  2. Further, taxpayer may mention the fact of not being able to file the revised return at the portal on the last date due to severe server problem being faced at the portal.
  3. Taxpayers may also write the letter to the jurisdictional AO with all the facts and figures of error in the return.

Though above points may not be the actual solution to the issue but this is certainly going to help the assessee from the penal consequences if the case is opened up for assessment proceeding. Except the remedy mentioned above in 1 to 3, there is no other options which are available to the assessee at present.

Suggestions to CBDT:

Though the approach adopted by CBDT is appreciable, there are few suggestions and feedback which CBDT is requested to take care:

  1. Only 2 days were given to the taxpayers for revising the income tax return. This time was not sufficient even for honest taxpayers who have erroneously left the income in ITR or got to know the information only after this SMS/Email.
  2. The SMS/Mail is send randomly & casually without verifying the fact that the information is already disclosed in the ITR.
  3. The SMS/Mail is send for compliance without ascertaining the fact that the ITR forms don’t have any column to make the reporting like in case of purchase of high value property, deposits in the bank account, etc
  4. The SMS / Mail in respect of STT paid and share transactions has been issued despite the fact that the assessee has sufferd the loss and didn’t claim the benefit of its carry forward due to belated filing of ITR. There is no provision to  make the disclosure of this in the ITR.
  5. The SMS/Mail is also forwarded to one person whereas the property was sold by joint owners. The notice is send to one by imaging that the concerned assessee is 100% owner of the property.
  6. The SMS/ Mail is also forwarded if the person has purchased the Car which may not require the disclosure in the ITR forms as such.
  7. Taxpayers were trying to revise the return in the last 2 days but the portal was not at all working and responding in this 2 days. It has defeated all the purpose with which the SMS/Mail is send.

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