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New Income Tax Guidelines for Taxpayers: Failure to Respond to Income Tax Department Notices may Lead to Increased Troubles

The Income Tax Department has introduced new guidelines outlining the cases that will fall under the scope of ‘investigation’.

These guidelines mandate the investigation of taxpayers who have failed to respond to notices issued by the department. Additionally, the department will conduct investigations in cases where specific information regarding tax evasion has been provided by law enforcement agencies or regulatory authorities.

As per the guidelines, tax authorities are required to send notices to taxpayers regarding income discrepancies under section 143(2) of the Income Tax Act before June 30. Subsequently, taxpayers are obligated to present relevant documents pertaining to the matter.

NFFC Involvement in the Matter

In cases where no response has been received for the notice issued under section 142(1) of the Income Tax Act, the case will be referred to the National Faceless Assessment Center (NaFAC) for further action.

Notice Provision under Section 142(1)

Section 142(1) empowers the tax authorities to issue a notice and seek clarifications or information if a tax return has been filed. In cases where returns have not been filed, taxpayers are required to provide necessary information as per the prescribed procedure.

Consolidated List of Exemption or Deduction Cases

The Income Tax Department will compile a comprehensive list of cases where taxpayers claim income tax exemption or deduction despite the exemption being cancelled or withdrawn by the Competent Authority. As per the guidelines, taxpayers will receive notices through NAFAC under section 143(2) of the Act.


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