Clarification issued by Income tax department regarding bulk message on interest income mismatch
In last 1-2 days many assessee have received bulk SMS from Income tax department stating that there is a mismatch in income disclosed in Income tax return and Income as per AIS/ TIS.
Majorly the difference was in relation to interest income. Such notices were received in relation to FY 2021-22 and FY 2022-23 wherein it was mentioned that assessee has not declared some income in Income tax return.
A sample of such message is as under:
“Attention (XXXPS9413X)
Income Tax Department has identified certain information for FY: 2022-23, which are available on AIS. It has been observed that either the Return of Income has not been filed or if the Return of Income has been filed for the relevant FY, the same is not in line with the Information value available with the Income Tax Department. To view the Information mismatch and to submit your response, you are required to login at e-Filing portal (https://www.incometax.gov.in) and select ‘Compliance Portal’ under ‘Pending Actions’ tab. On Compliance portal home page, navigate to ‘e-Verification’ tab. – Income Tax Department.”
However, firstly the people were unable find such notice as the compliance portal was not working properly and also not loading. Hence, it was difficult for taxpayers to check what was missed in Income tax return and this made the assessee as well as the tax consultant panic about non-disclosure of income.
When checked in few cases it was found that, Income tax department was trying to match Interest on deposit mentioned in TIS with only Interest on FDR which means that Income tax department was matching interest from deposit i.e. Interest on which TDS u/s 194A was deducted, only with Interest on FDR and was not considering Interest from other party or interest from unsecured loan already offered to tax by assessee, while considering or comparing interest income of assessee. However, in the response section there was no proper option available to report that such income was already offered to tax.
Thus, because of the above issue people were unable to understand as to how to respond to such notice and then Income tax department on 26.02.2024 released a press release wherein Income tax department has mentioned that it has sent such bulk message to all taxpayers where they have found any discrepancy and they want to give a chance to all taxpayers to file updated return.
However, they have even mentioned that in case assessee has already filed and shown interest income under “other income” then the taxpayer need not take any action and such notice will be removed and status will be shown as “Completed”.
Further, they have also mentioned that “The objective of the communication is to provide an opportunity to taxpayers & facilitate them to provide their feedback online on the Compliance Portal of ITD &, if necessary, file an Updated Return.”
To read the tweet of Income tax department CLICK ME.
To read the Press Release CLICK ME.
It is important to note that this is again an instance where Income tax department has sent bulk notices to assessee and mentioned that assessee can ignore this message if the data is already provided. Earlier also such notice was sent for FY 2022-23 return wherein it was mentioned that assessee has not disclosed complete information in it’s return of income and later a press release was issued stating that those assessee who have disclosed complete information can ignore this message.
In our humble opinion Income tax department should understand that all assessee’s are not very well aware about the details feeded in their Income tax department and they are dependent on tax consultant to file their Income tax return and when they receive such messages they start to panic and start questioning their consultant. Hence, Income tax department should not send such bulk messages to all assessee without testing whether the system is working properly or not.
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