Failed to reply of cash transaction above Rs 5 Lakh during demonetization may lend you in trouble

If you received an email or SMS from Income tax department between November 9 and December 30, 2016 and not replied yet, will let you in trouble as Central Board of Direct Taxes (CBDT) has decided to crack the whip  on those who fail to verify cash deposits of Rs 5 lakh or more during the demonetisation drive, while deciding to go easy on “low-risk cases“.

With a majority of the 18 lakh who had deposited more than Rs 5 lakh cash into their accounts failing to electronically verify the funds, the tax cell has been forced to push the cases to its field officers but with a clear message that the entire process should be electronic and non-intrusive.

“It is reiterated that no independent enquiry or third party verifications are required to be made by the assessing officer outside the online portal. Whatever information is necessary for verification, the same has to be collected through the person under verification using online platform only . Even telephonic queries are to be avoided,“ the CBDT said in the standard operating procedure for assessing officers.

At the same time, the tax cell wants its field officers to clearly state if the data submitted by those under the lens is “acceptable“ or “non-acceptable“.

The officer has to escalate the “non-acceptable“response for “possible tax evasion“.

The real focus is, however, on those who have so far failed to verify the deposits on the e-filing portal. “In case the person under verification does not respond within the timeframe prescribed, it might lead to a possible inference that the cash deposit under verification is prima facie undisclosed and consequently the AO (assessing officer) may treat these cases under the `non-acceptable’ category with relevant remarks,“ the tax agency said.

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