Impact of non filing of return upon receiving notice from the department

Filing of income tax return is an obligation to be fulfilled by individuals. It is a social duty by the citizens of the country.

The government of India has made it mandatory for people having a particular amount of income or more to file a tax return within a stipulated date. The tax as applicable is required to be paid by the assessee. Failure to do so invites penalties from the department.

Though people are aware of filing of income tax returns, still non-filing of returns on time is a common phenomenon in India.

Notice from the department:

In the recent years huge numbers of taxpayers have received notices from the income tax department. Notices are sent according to the provisions of many sections of the Income Tax Act. This hike in the number of tax notices is for the reason that the department has a database on taxpayers and is tracking most of the financial transactions of individuals.

Things to be done upon receiving notice:

One should not ignore the notice because non-payment of tax may lead to penalty. Do not panic upon receiving the notice. Your ignorance may make you liable to a fine apart from the penalty.

You may get a notice under section 142 (1) of the Income Tax Act stating that you have failed to file your return during the financial year. If you have already filed your return within the due time, you should produce the documents supporting your contention before the assessing officer. If you have not filed your tax return, you should do the same immediately.

One should understand the motive of sending the notice. One can also check the details of the notice given like name, address, etc. It may be the case that your name or address appearing on the notice is incorrect.

After receiving the notice, one should meet the Assessing Officer along with the relevant documents. Non filing of returns by an assessee in spite of receiving a notice may make him liable to penalty. One should file the return directly as soon as possible.

Consequences of non-filing of return upon receiving notice from the department:

If you have not filed your return within the due time or within the time given in the notice by the department, it may lead to penalty.

In addition to penalty, the law also provides for prosecution in the form of rigorous imprisonment up to a period of three months to seven years as well as fine. Section 276CC of the Income Tax Act deals with such prosecution proceedings.

In case of a company, the partners or directors may have to face prosecution. This was held by the Supreme Court in a recent judgment.

In case prosecution proceedings are brought against a taxpayer, the onus is upon the taxpayer to prove that his failure to file the return  was not willful if he contends that the failure was not due to his own fault.