In case you receive a query from the income tax (I-T) department, you must send a prompt reply without fail. A late reply, or overlooking the same as harmless, may cost you dearly in the long run. The tax department may even decide to put your tax return under scrutiny.
To avoid anything of that sort from happening, it is imperative to give an immediate reply to whatever query is being sent online. If a department notice is issued, then never refrain from giving an immediate reply.
Technically speaking, your ITR can be put into the scrutiny category. Besides this, the Income Tax Department will continue to send follow up queries.
The Central Board of Direct Taxes (CBDT) has issued guidelines for selection of ITR for complete scrutiny. This is applicable only for the current financial year i.e. 2023-24. The guidelines state that for those taxpayers where a scrutiny was done in cases of tax evasion or where notice was issued for tax evasion, their ITR needs to be scrutinised thoroughly.
A senior official says that the income tax department questions those taxpayers who are suspicious about their income across borders, i.e. have concealed their income that comes under black money. This is directly considered to be tax evasion.
The tax department carries out the scrutiny assessment under section 143(3). Let us first understand what scrutiny assessment is.
What is scrutiny assessment under 143(3)?
Assessment under section 143(3) is a detailed assessment and is also referred to as scrutiny assessment. At this stage, a detailed scrutiny of the return of income is carried out to confirm the correctness and genuineness of various claims, deductions, etc., made by the taxpayer in the return of income.
To carry out assessment under section 143(3), the assessing officer serves notice under section 143(2).
And this notice is meant to be served within three months from the end of the financial year in which the return is filed.
Why it is important to respond?
In such a case, when the income tax department asks any question, it should be replied in time. If the department is satisfied with the answer then the case is closed. If the answer is not satisfactory then further action is usually taken as per the rules.
It is therefore necessary to answer the questions of the income tax department. This opens a way to resolve the case. If the taxpayer is negligent in answering the questions, then the result can be disastrous.