Reply to notice

This query is : Resolved

Ninad (Querist)
Follow

22 November 2017 Hello to All The Experts,

One of our client have received a notice for Foreign Exchange Credit used by the client. Our client has purchased and sold goods to china and received the tax paid certificate from the said Chinese Firm. We have utilized the said foreign exemption while paying the tax. Now the Income Tax department has issued the notice that the said exemption cannot be utilized.
Now we have to draft a Reply to this notice and I am unable to do the same.
Can you tell me how tho draft notice like what is to be mentioned which documents to take along with us while meeting the Assessing Officer.
Format of the same if made available is appreciable.
Reply requested as soon as possible.

ABHIMANYU JHAMBA

ABHIMANYU JHAMBA (Expert)
Follow

27 November 2017 We need to see the papers before advising.

Abhimanyu Jhamba
CA/ Advocate
9218999999

Asha Kanta Sharma

Asha Kanta Sharma (Expert)
Follow

21 July 2025 Certainly! Here’s a professional and clear draft reply to the Income Tax notice regarding the Foreign Exchange Credit exemption. I’ve also included a checklist of documents to carry when meeting the Assessing Officer (AO).

Draft Reply to Income Tax Notice
To,
The Assessing Officer,
[Address of Income Tax Department]

Date: [Insert Date]

Subject: Reply to Notice under Section [mention section, e.g., 143(2) / 142(1)] – Foreign Exchange Credit Exemption

Respected Sir/Madam,

With reference to the notice dated [insert date of notice], regarding the utilization of Foreign Exchange Credit exemption by our client, [Client’s Name], PAN [Client’s PAN], we would like to submit the following for your kind consideration:

Our client has conducted export/import transactions with a Chinese firm during the financial year [mention year].

The foreign exchange credits utilized were supported by the Tax Paid Certificate issued by the Chinese firm, confirming that the necessary taxes have been paid in China on the transactions in question.

We have duly enclosed the said Tax Paid Certificate and other relevant export/import documents to substantiate the claim for exemption.

The exemption claimed is in accordance with the relevant provisions of the Income Tax Act and applicable Double Taxation Avoidance Agreement (DTAA) between India and China.

We request you to kindly consider the attached documents and clarify the applicability of the exemption under the law.

We shall be happy to provide any additional information or documents as required. We also request a personal hearing to explain the matter in detail.

Thanking you,

Yours faithfully,
[Authorized Signatory Name]
[Designation]
[Client’s Company Name]
[Contact Details]

Documents to carry while meeting the Assessing Officer:
Copy of the Notice received from the Income Tax Department

Tax Paid Certificate issued by the Chinese firm

Copies of purchase and sale invoices related to the transactions

Bank statements showing receipt and payment of foreign exchange

Copy of relevant provisions of the Income Tax Act / DTAA between India and China

Proof of export/import transactions (shipping bills, bills of lading, etc.)

Any correspondence with the Chinese firm related to tax payment

Power of Attorney or authorization letter if someone is representing the client

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now