AIS and ITR Mismatch: 68,000 cases summoned by Income Tax Department

The income tax department has picked 68,000 cases for e-verification for unreported or underreported income in tax returns(ITRs) for the 2019-20 financial year, according to CBDT chairman Nitin Gupta on Monday. The I-T department notifies taxpayers about discrepancies in the Annual Information Statement (AIS) about financial transactions and the I-T returns filed under the e-verification programme. If the taxpayer believes the mismatch noted in the e-verification notice is correct, they can respond to the tax department with an explanation or file revised returns.

“On a trial basis, about 68,000 cases from the 2019-20 Financial year have been selected for e-verification based on risk management standards established by the department. In 56% of these situations, or 35,000, the taxpayer has already responded adequately to the notice or filed an updated tax return “Gupta stated.

He stated that so far, 15 lakh amended returns have been filed, and Rs 1,250 crore in tax has been collected. Nevertheless, in the remaining 33,000 cases, no response has been received. Taxpayers have until March 31, 2023, to file revised forms for income earned in the financial year 2019-20.

“After an assessee files an amended ITR, his/her case is less likely to be picked up for examination or re-assessment,” Gupta said during a media interaction.

Gupta stated that the risk factors for selecting returns for e-verification would be set every year, without providing the process for selecting an ITR for e-verification.

“The 68,000 cases selected up for e-verification was based on the discrepancy between tax return filed and the data obtained from source with relation to deposits. The decision is made by a computer. “If you do not react to the e-verification notices, the case is likely to be selected for scrutiny,” Gupta added.

Gupta encouraged taxpayers to review their AIS on a regular basis and to notify the government if they see any discrepancies.

“The e-verification method is a non-intrusive way to encourage taxpayers to file amended returns in the event of a mismatch. It is straightforward, has no human interaction, fosters voluntary compliance, and would help reduce litigation ” stated the Chief of the Central Board of Direct Taxes (CBDT).

When the department electronically notifies a taxpayer that his case has been selected for e-verification, the taxpayer has 15 days to respond to the notification from the I-T department. The CBDT has a 90-day deadline for completing a specific case under e-verification, however difficult cases may take longer.

The e-verification technique was announced on December 13, 2021, and the pilot programme began in September 2022. The deadline for filing amended returns for the 2019-20 financial year is March 31, 2023.