Received a Tax Notice U/S 133(6)? Here is What You Should Do

On getting a notice from the Income Tax Department under Section 133(6) of the Income Tax Act, 1961, do not panic or take the wrong steps. Section 133(6) allows officers in the income tax department to ask for additional financial information or documents through notices from any person, no matter if the proceedings are pending or if the investigation is still ongoing.

As per an expert, these notices are issued to persons when there is a sudden increase in their income, or they conduct a high-value transaction, or when the deductions claimed by the taxpayer do not match the income disclosed by the taxpayer. In addition to this, third parties, including vendors or banks, can also get such notices if they are connected to a taxpayer who is being investigated by the tax officers.

Which Documents are Asked by the I-T Dept?

The tax authorities can ask for the following documents:

• Bank statements
• Invoices
• GST returns
• Purchase or sale agreements
• Agreements with customers or vendors
• Loan documents

What to Do After Getting the Notice?

The taxpayers should not rush into making any decision and, instead, carefully take the following steps:

• Check the notice: Carefully read the notice and make sure that it has been sent by a legal tax officer and also has a DIN (Document Identification Number).
• Verify your Details: Check all your details mentioned in the notice like your name, PAN number, and the assessment year.
• Look for Requirements: look for all the legal requirements mentioned in the tax.
• Gather Documents: Collect all the significant documents and verify them for accuracy.
• Give Response: Usually, notices have a deadline by which you need to reply to them. You should respond to the tax notice on time to avoid any further penalties.
• Take Professional Help: If you do not know how to respond to the notice, you can consult professionals such as Chartered accountants and tax advisors.

How to Avoid Getting Tax Notices?

As per an expert, if you do not want to get involved in the tax notices, you should always maintain financial transparency. Avoid doing high-value transactions for buying property and disclose your income from time to time.

Taxpayers should note that getting a notice under Section 133(6) does not always mean you have done something wrong. As per experts, it could be just for verification, and no further actions can be taken on the basis of this notice. Additionally, these notices could also be a result of a mismatch or inconsistency. If you have reported your financial activities on a regular basis, you need to worry less.