income tax return · Taxation

How is My Income Tax Return Processed


Now that you can easily register yourself on the income tax portal, file income tax returns online, receive notices and intimations, respond and track the status of your income tax refunds you do not really have an excuse to not file or delay the process any more. Basic computer literacy, an email and an existing phone number are all that’s required of you to register at the income tax login portal.

There is also an online grievance redressal mechanism in the form of E-Nivaran available on the portal. But in certain situations things may still go wrong. Angel investors are at loggerheads with tax authorities over what they see as investments but an Assessing Officer may argue is a source of income instead.

This is significant because according to NASSCOM, India has the third most start-up businesses in the world with Bengaluru, Mumbai and Delhi emerging as the most favoured places for setting up new firms. Apart from the tax incentives offered to start-ups and small scale commercial entities, the trend of contract manufacturing by large companies to snip expenses in production are a factor.

What Does an Income Tax Assessing Officer Do?

Let us understand what goes into a decision by an IT Assessing Officer in processing your return.

After you submit your return and obtain an acknowledgement via ITR-V form submission it is the AO’s responsibility to flag files for scrutiny and make decisions with regard to rectification notices, intimations, re assessments, calls for audit, determination of income, penalties, interest on arrears, prosecutions, attachment orders for recovery of demand and so on. Further, she must also complete the process within the specified time.

She must also address grievances of tax assessees falling within her tax circle and ensure that a satisfactory resolution is reached before the matter is escalated.

Can You Personally Visit an AO?

Very often, the simplest way to redress a situation where you disagree with the demand is to discuss the issue with the AO herself. Some people may prefer visiting a tax office and personally talk to the officer instead of waiting for an emailed response.

You can seek clarifications in your response or express your dissatisfaction with an order in which case the AO usually has 30 days to dispose of the petition.

What Can I Do if my Dispute is Still NOT Resolved?

In case you still disagree with your AO or if no reply is received you can approach the Commissioner of Income Tax (Appeals) for lodging your complaint.

If you have accepted a Tax Demand but lack the means to meet that demand then you can ask for more time from your AO. You will have 30 days to make the payment initially depending on the discretion of the AO (Section 220 of the Income Tax Act). If you fail to meet the deadline, you will be charged simple interest at the rate of 1% per month or part of a month.

Sub-section 2A of Section 220 allows the Principal Income Tax Commissioner to lessen or waive off the interest only of the tax payer if you can convince her that you would face genuine hardships if tax demand were to be met, if the default was due to circumstances beyond your control and you have co-operated with the investigation and assessment so far.

Section 246 lists the orders and notices which you can appeal against. You or your representative may not appeal an order which is not a part of this section.

Responses need to be carefully drafted when incomes or investments are numerous. Call in a professional tax expert if you feel unwilling to expose yourself to further penalty. AllindiaITR is one such platform with very transparent charges and highly efficient services. The website is owned and promoted by Corwhite Solutions Private Limited.

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