INCOME TAX NOTICE QUESTION
This query is : Resolved
18 November 2025
sir,An individual taxpayer has been regularly filing ITR every year, and tax audit reports have also been filed. Recently, the assessee received a notice from the Income Tax Department under Section 131(1A) asking for submission of books of accounts and documents for the past four years. Now assessee want to know: What is the purpose of issuing a notice under Section 131(1A)? Is this notice related to scrutiny assessment, survey, or some other proceeding? What is the procedure after such a notice is issued and received by the assessee?
18 November 2025
A notice under Section 131(1A) is not part of scrutiny assessment—it is an investigative tool used by the Income Tax Department to gather evidence when they suspect tax evasion, even if no formal proceedings are pending. It is often linked to intelligence inputs, surveys, or impending search actions.
18 November 2025
Purpose of Section 131(1A) Notice
- Investigative Power: Section 131(1A) empowers income tax authorities (including officers from Investigation Wing) to summon documents, books of accounts, or even examine individuals on oath.
- No Need for Pending Proceedings: Unlike Section 131(1), this provision can be invoked even if no assessment or inquiry is pending.
- Trigger Point: Typically issued when the department has reason to suspect concealment of income, often based on:
- Intelligence inputs
- Third-party information
- Data analytics or AIR/CIS mismatches
- Pre-survey or pre-search groundwork
- Investigative Power: Section 131(1A) empowers income tax authorities (including officers from Investigation Wing) to summon documents, books of accounts, or even examine individuals on oath.
- No Need for Pending Proceedings: Unlike Section 131(1), this provision can be invoked even if no assessment or inquiry is pending.
- Trigger Point: Typically issued when the department has reason to suspect concealment of income, often based on:
- Intelligence inputs
- Third-party information
- Data analytics or AIR/CIS mismatches
- Pre-survey or pre-search groundwork
18 November 2025
- Not Scrutiny Assessment: Scrutiny under Section 143(2) involves a formal assessment proceeding. Section 131(1A) is outside that framework.
- Not a Survey (Section 133A): Though it may precede or follow a survey, this notice itself is not a survey action.
- Linked to Investigation/Search: Often used by the Investigation Wing before initiating a search (Section 132) or survey (Section 133A). It helps gather preliminary evidence.
- Not a Survey (Section 133A): Though it may precede or follow a survey, this notice itself is not a survey action.
- Linked to Investigation/Search: Often used by the Investigation Wing before initiating a search (Section 132) or survey (Section 133A). It helps gather preliminary evidence.
18 November 2025
Procedure After Receiving Section 131(1A) Notice
- Careful Review of Notice:
- Check the officer’s designation (usually Investigation Wing).
- Note the specific documents/books requested and the time period.
- Prepare Response:
- Collate books of accounts, ledgers, vouchers, tax audit reports, and ITRs for the specified years.
- Ensure consistency with filed returns and audit reports.
- Attend Summons Personally or Through Authorized Representative:
- The assessee may be required to appear in person or send a representative (with Power of Attorney).
- Be prepared for oral examination on oath.
- Maintain Transparency and Accuracy:
- Avoid suppression or misrepresentation.
- If certain records are unavailable, explain with reasons.
- Post-Submission Scenario:
- The department may:
- Close the inquiry if satisfied.
- Initiate further action like survey/search.
- Share findings with the AO for reopening or reassessment.
- Careful Review of Notice:
- Check the officer’s designation (usually Investigation Wing).
- Note the specific documents/books requested and the time period.
- Prepare Response:
- Collate books of accounts, ledgers, vouchers, tax audit reports, and ITRs for the specified years.
- Ensure consistency with filed returns and audit reports.
- Attend Summons Personally or Through Authorized Representative:
- The assessee may be required to appear in person or send a representative (with Power of Attorney).
- Be prepared for oral examination on oath.
- Maintain Transparency and Accuracy:
- Avoid suppression or misrepresentation.
- If certain records are unavailable, explain with reasons.
- Post-Submission Scenario:
- The department may:
- Close the inquiry if satisfied.
- Initiate further action like survey/search.
- Share findings with the AO for reopening or reassessment.
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