14 February 2014
My agriculture land was acquired by govt and compensation was received in FY 2012-13.
The capital gain is exempt but I have to pay tax on interest component in total compensation received.
Neither I have filled any Income Tax Return for AY 2013-14 nor I have deposited any Self Assessment Tax on interest income till today as I can file my Income Tax Return till 31.03.2015 with Rs.5000/- penalty.
Now I have received a letter from Deputy Director of Income Tax (Inv) requiring me to submit to him my Income Tax Return for AY 2013-14 and other documents (like bank statements, books of accounts etc).
what are the power of deputy director (inv) in above case or what he can do????
10 August 2024
In your case, where you have received a letter from the Deputy Director of Income Tax (Investigation) under Section 131(IA) of the Income Tax Act, it’s important to understand the powers and scope of the Income Tax Authorities under this section. Here’s a detailed explanation:
### **Powers of Deputy Director of Income Tax (Investigation)**
#### **1. Powers Under Section 131(IA)**
- **Section 131(IA)** grants the Deputy Director of Income Tax (Investigation) the power to summon and examine individuals, books of accounts, documents, and other evidence. Specifically, this section empowers the Income Tax Authorities to:
- **Summon and Examine**: Call for and examine the evidence, records, and documents relevant to any tax investigation. - **Search and Seizure**: Conduct searches and seizures under Section 132 if required, although this is more relevant to cases involving significant tax evasion or fraud. - **Request Information**: Obtain information from any person, which may include submitting documents or explanations related to the case.
#### **2. Specific Powers and Actions**
- **Demanding Information**: The Deputy Director can require you to provide your Income Tax Return for AY 2013-14, along with bank statements and books of accounts, to verify the source of income and tax liability. - **Assessment of Non-Compliance**: The Deputy Director may review the details provided and assess whether there has been any non-compliance with tax regulations, such as failure to file the return or pay the self-assessment tax. - **Imposition of Penalties**: If the Deputy Director finds that there is a failure to comply with tax filing or payment obligations, they may initiate proceedings for penalties as prescribed under the Income Tax Act.
### **What You Should Do**
1. **Comply with the Request**: It is advisable to respond to the notice by providing the required documents and information. This includes filing the pending Income Tax Return for AY 2013-14 and providing details of the interest income and any other relevant documents.
2. **Self-Assessment Tax**: Pay the self-assessment tax along with any applicable interest or penalties before submitting your return to avoid further complications. This will help demonstrate your intent to comply with tax regulations.
3. **Consult a Tax Professional**: Given the involvement of the Deputy Director (Investigation) and the nature of the issue, it is highly recommended to consult a Chartered Accountant or tax professional. They can provide guidance on how to handle the investigation and ensure that you meet all compliance requirements.
4. **Possible Penalties**: Be prepared for potential penalties or interest charges due to the delay in filing and payment. The authorities may impose penalties under Section 271F for failure to file a return and Section 234A/B/C for delay in payment of taxes.
### **Summary**
The Deputy Director of Income Tax (Investigation) has the authority to summon you to provide necessary documents and information related to the investigation. It is important to comply with their request, file the pending return, and settle any outstanding taxes and penalties. Consulting with a tax professional can help navigate the process and resolve any issues effectively.
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