E-Verification Instructions Issued by Directorate of I-T (Systems) to Assessing Officers for Initiating Proceedings u/s.147 of Income Tax Act against the High Risk Cases of FY 2020-21. Taxpayers in Default can also treat this as a reminder for them from the Directorate, urging them to submit their updated returns for the FY 2020-21 by the deadline of 31 March 2024.
In reference to E-Verification Instruction No. 2 of 2024, issued on March 1, 2024, the Directorate of Income Tax (Systems) has recently instructed Assessing Officers (AOs) to commence proceedings under Section 147 of the Income Tax Act for e-verification cases. Here’s a comprehensive breakdown of the steps and details for AOs to navigate this process effectively.
Background
The aforementioned Instruction No. 2 highlighted the identification of specific High-Risk Cases under the e-Verification Scheme-2021, necessitating the reopening of assessments under Section 147 of the Act. AOs were directed to invoke these provisions and issue Notices under Section 148 accordingly.
Clarification on Value at Risk (VaR)
Queries have arisen regarding the quantum of Value at Risk (VaR) mentioned in the Final Verification Report (FVR) by the CIT, e-Verification. AOs have faced challenges in accessing the FVR to determine the Income Escapement amount/ Value at Risk.
Accessing Information
All proceedings and documents submitted by taxpayers during e-Verification are accessible via the Insight portal’s e-Verification module. To access this information:
- Insight Portal >> Verification Module >> e-Verification (Taxpayer) >> e-Verification Scheme 2021 >> Verified >> Count
This data provided to AOs falls under the definition of “Information” within clause (iv) of Explanation 1 to Section 148 of the Act. For the Assessment Year 2020-21, two primary categories of cases are available:
(i) Non-updated ITR Cases: These involve instances where taxpayers have not filed updated ITRs under Section 139(8A) of the Act.
(ii) Updated ITR Cases: In these cases, taxpayers have submitted updated ITRs under Section 139(8A) during e-Verification, albeit without fully reconciling the discrepancies.
Calculation of Value at Risk
For Non-updated ITR Cases: The Value at Risk in FVR corresponds to the Income Escapement amount estimated by Prescribed Authorities in the Preliminary Verification Report (PVR).
In Updated ITR Cases: The Value at Risk in FVR is the Income Escapement amount determined by Prescribed Authorities in the PVR, reduced by any additional income disclosed in the updated ITR. The formula is:
Value at Risk = (Income Escapement amount in PVR – Additional income in Updated ITR)
Additional income = (Gross Total Income in Updated ITR – Gross Total Income in Original ITR)
Initiating Proceedings
To commence proceedings under Section 147 of the Act, follow these steps:
- Insight Portal >> Verification Module >> e-Verification (Taxpayer) >> High Risk – e-Verification Scheme >> Under Verification >> Count
Quick Reference Guide
A handy guide for ‘High Risk e-Verification Scheme’ Cases is available on the Insight Portal for user assistance. For further support, queries can be directed to ito2.systems.ev@incometax.gov.in or by calling the helpdesk at 1800 103 4216 (Monday to Friday, 9:30 AM to 6:00 PM).
Conclusion
This guide equips AOs with the necessary information to navigate the process of initiating proceedings under Section 147 for e-Verification cases. By utilizing the resources available on the Insight Portal and reaching out for assistance when needed, AOs can ensure a smooth and effective handling of High-Risk Cases.
Moreover, the issuance of this instruction to AOs also serves as a reminder from the Directorate of Income-tax to the defaulting taxpayers, urging them to submit their updated returns for the FY 2020-21 by the deadline of 31 March 2024.
Download Instruction 2(i)/2024
To Access the related Press Release of MoF on e-Verification Scheme 2021 CLICK HERE
To Access the CBDT Circular 5/2024 Dated 15 March 2024 CLICK HERE
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