ITR
Replying to a show-cause with a draft assessment order
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Facts
In faceless assessment, the show-cause usually comes with a draft order showing proposed additions. Your reply should take each addition one by one, with facts, computation and documents.
Provisions and law
- Sec 144, Income-tax Act 1961 (now Sec 271)If you do not file a return or do not comply with notices under Sec 142(1) or 143(2), the officer can assess to the best of judgment after a show-cause notice giving you a date to be heard.
- Sec 144B, Income-tax Act 1961 (now Sec 273)Assessments are done in faceless mode through the e-Proceedings facility, with replies uploaded online.
Analysis
If the draft adds ₹18,00,000 of share sale value from AIS as income, show the purchase cost so the real capital gain, say ₹60,000, is taxed instead. If it adds ₹4,00,000 cash deposits, show the source, such as withdrawals from the same bank. Number your points to match the draft, attach PDFs, and keep it factual. Ask for a personal hearing if facts are complex.
Conclusion
- Make a table of each proposed addition.
- Write the correct figure and reason next to each.
- Attach proof for every point.
- Upload the reply on e-Proceedings before the date.
- Request a video hearing if needed.
A Savvy can do this for you
Best judgment assessment, Sec 144 (now 271)
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