Income tax scrutiny representation-power of attorney
This query is : Resolved
15 April 2013
Hi, one of my friend living in New delhi has got notice under section 143(2) and 142(1) and he has to appear before ITO either in self or through a representative. Now he wants to issue POA in favor of his younger brother who is a fresher chartered accountant. So, pls advice in what format this POA be issued! Whether POA will be on stamp paper and if yes, of how much value? If court stamp/revenue stamps can be affixed on a POA issued on plain paper? or a simple authorization letter will suffice?
Pls guide, its very urgent
Pls guide, its very urgent
Guest
Guest
(Expert)
15 April 2013
Court fees of Rs.50 is must. That may be on stamp paper or on simple letter affis Rs.50/- court fees stamps.
formal 4-5 lines for of power of attorney (POA) will do.
just write i hereby authorise Mr. CA to represent in my I Tax matters.
sign of assessee and CA as accepted.
formal 4-5 lines for of power of attorney (POA) will do.
just write i hereby authorise Mr. CA to represent in my I Tax matters.
sign of assessee and CA as accepted.
15 April 2013
Thanks a lot sir. Can you pls also guide whether ITO generally adjourns such hearing as my friend plans to appear before ITO and ask for adjournment so that he can take time and collect all details and documents required to be filed. Although in the notice it has been mentioned that no adjournment will be given unless details asked in points no. 1 to 12 is furnished. Pls guide.
15 April 2013
Pls also suggest whether this POA will be termed as General Power of Attorney or Special POA?
Guest
Guest
(Expert)
16 April 2013
GPA n if ur case is for A. Y. 2011-12, deadline to complete the case ll be 31.12.2013 n he will easily adjourn ur case.
abt 1-12 points give reply atleast for few points, few of them ll be not applicable 4 u i guess .
abt 1-12 points give reply atleast for few points, few of them ll be not applicable 4 u i guess .
16 April 2013
Sir,
ITO gave further time for 15 days to submit details and documents.
Client has purchased and sold a property in that year and earned STCG of around 4 lac thereupon but has not shown there in ITR. Now what will happen and how ITO will consider it? How much penalty and interest can be imposed thereupon. ANy remedy or option to save. Client after selling that property purchased new property in lieu of that.
Pls advice.
ITO gave further time for 15 days to submit details and documents.
Client has purchased and sold a property in that year and earned STCG of around 4 lac thereupon but has not shown there in ITR. Now what will happen and how ITO will consider it? How much penalty and interest can be imposed thereupon. ANy remedy or option to save. Client after selling that property purchased new property in lieu of that.
Pls advice.
31 July 2024
### Representation through Power of Attorney (POA)
For your friend to appoint his younger brother as his representative before the Income Tax Officer (ITO), the following steps can be taken:
#### 1. **Format of the Power of Attorney (POA)**
- **Special Power of Attorney (SPOA)** is recommended in this case since it is for a specific purpose.
- The POA should be written on non-judicial stamp paper of appropriate value as per the Stamp Act of the respective state. In Delhi, the stamp paper is typically of Rs. 100.
#### 2. **Contents of the POA**
The POA should include:
- **Title**: "Special Power of Attorney"
- **Details of the Principal**: Name, address, PAN number
- **Details of the Agent/Representative**: Name, address, relationship, and qualification (Chartered Accountant)
- **Purpose**: Specific authority to represent before the Income Tax Department under Section 143(2) and 142(1)
- **Authority Granted**: Specify the powers given, like attending hearings, submitting documents, and making statements
- **Validity**: Duration for which the POA is valid
- **Signature of the Principal**: The person giving the authority (your friend)
- **Signature of the Agent**: The person receiving the authority (younger brother)
- **Date and Place**: When and where the POA is executed
#### 3. **Attestation**
- The POA should be notarized to add authenticity.
- It can also be attested by two witnesses.
### Sample Format of Special Power of Attorney
```plaintext
Special Power of Attorney
This Power of Attorney is made on this [Date] day of [Month], [Year], at [Place].
BY
Mr. [Name of Principal], son of [Father’s Name], residing at [Address], having PAN [PAN Number], (hereinafter referred to as the 'Principal').
IN FAVOR OF
Mr. [Name of Agent], son of [Father’s Name], residing at [Address], a qualified Chartered Accountant, (hereinafter referred to as the 'Agent').
WHEREAS the Principal is required to appear before the Income Tax Officer in response to notices under Section 143(2) and 142(1) of the Income Tax Act, 1961.
NOW KNOW ALL MEN BY THESE PRESENTS THAT I, the Principal, do hereby nominate, constitute, and appoint Mr. [Name of Agent] as my true and lawful Attorney to do the following acts, deeds, and things in respect of the said notices:
1. To appear before the Income Tax Officer and represent me in the proceedings under Section 143(2) and 142(1) of the Income Tax Act, 1961.
2. To submit necessary documents, statements, and information as required by the Income Tax Officer.
3. To make necessary statements, explanations, and submissions on my behalf.
4. To do all lawful acts and deeds necessary for the completion of these proceedings.
I hereby agree to ratify and confirm all lawful acts, deeds, and things done by my said Attorney pursuant to this Power of Attorney.
In witness whereof, I, [Name of Principal], have hereunto set my hands on this [Date].
Signature of Principal: _____________________
(Name of Principal)
Accepted by:
Signature of Agent: ________________________
(Name of Agent)
Witness 1:
____________________________
(Name and Signature)
Witness 2:
____________________________
(Name and Signature)
Signed, sealed, and delivered in the presence of:
Notary Public:
____________________________
```
### Procedure for Attestation and Submission
1. **Stamp Paper**: Purchase a non-judicial stamp paper of Rs. 100.
2. **Preparation and Signing**: Draft the POA as per the above format, sign it, and get it signed by the agent and two witnesses.
3. **Notarization**: Get the POA notarized.
4. **Submission**: Submit the notarized POA to the Income Tax Office when your agent appears on your behalf.
### Adjournment Request
While it is at the discretion of the ITO to grant adjournments, you can request additional time by providing valid reasons. Since the notice explicitly states that no adjournment will be given unless details asked in points 1 to 12 are furnished, ensure that the request for adjournment is accompanied by as much information as possible regarding the required details.
### Handling Undisclosed Income (STCG)
If the client has not disclosed the Short-Term Capital Gains (STCG) from the sale of property in the ITR:
1. **Disclosure**: It is best to voluntarily disclose this information during the scrutiny proceedings.
2. **Tax Liability**: Calculate the tax liability on the STCG and be prepared to pay it along with applicable interest.
3. **Penalties**: The ITO may impose penalties for concealment of income. However, the penalty can sometimes be reduced if the disclosure is voluntary and the tax is paid promptly.
4. **Set-Off**: If the new property purchase qualifies for exemption under Section 54F (if it's a residential property), calculate the exemption amount to reduce the taxable gains.
### Filing Returns
For any backdated returns or current returns:
- **Section 139(9)** (Defective Return): Ensure all required documents are attached to avoid defective returns.
- **Filing Returns**:
- For assessment years where manual returns are allowed, submit physical copies with required enclosures.
- For e-filing, follow the online procedure and attach the necessary documents.
### Incorporation Procedures
If incorporating a new company or converting an association to a company:
1. **Draft MOA and AOA**: Ensure the Memorandum of Association (MOA) and Articles of Association (AOA) are in compliance with the Companies Act, 2013.
2. **Change of Directors**: For changing directors before incorporation, a NOC from the outgoing director and a resolution from the board will be required.
3. **Attestation for NRI Director**: Follow proper attestation procedures for POA and subscriber's pages in MOA for NRI directors.
### Conclusion
Ensure all documents and formalities are accurately prepared and comply with the applicable legal requirements. Consulting a professional for detailed guidance and to handle complex issues is advisable.
For your friend to appoint his younger brother as his representative before the Income Tax Officer (ITO), the following steps can be taken:
#### 1. **Format of the Power of Attorney (POA)**
- **Special Power of Attorney (SPOA)** is recommended in this case since it is for a specific purpose.
- The POA should be written on non-judicial stamp paper of appropriate value as per the Stamp Act of the respective state. In Delhi, the stamp paper is typically of Rs. 100.
#### 2. **Contents of the POA**
The POA should include:
- **Title**: "Special Power of Attorney"
- **Details of the Principal**: Name, address, PAN number
- **Details of the Agent/Representative**: Name, address, relationship, and qualification (Chartered Accountant)
- **Purpose**: Specific authority to represent before the Income Tax Department under Section 143(2) and 142(1)
- **Authority Granted**: Specify the powers given, like attending hearings, submitting documents, and making statements
- **Validity**: Duration for which the POA is valid
- **Signature of the Principal**: The person giving the authority (your friend)
- **Signature of the Agent**: The person receiving the authority (younger brother)
- **Date and Place**: When and where the POA is executed
#### 3. **Attestation**
- The POA should be notarized to add authenticity.
- It can also be attested by two witnesses.
### Sample Format of Special Power of Attorney
```plaintext
Special Power of Attorney
This Power of Attorney is made on this [Date] day of [Month], [Year], at [Place].
BY
Mr. [Name of Principal], son of [Father’s Name], residing at [Address], having PAN [PAN Number], (hereinafter referred to as the 'Principal').
IN FAVOR OF
Mr. [Name of Agent], son of [Father’s Name], residing at [Address], a qualified Chartered Accountant, (hereinafter referred to as the 'Agent').
WHEREAS the Principal is required to appear before the Income Tax Officer in response to notices under Section 143(2) and 142(1) of the Income Tax Act, 1961.
NOW KNOW ALL MEN BY THESE PRESENTS THAT I, the Principal, do hereby nominate, constitute, and appoint Mr. [Name of Agent] as my true and lawful Attorney to do the following acts, deeds, and things in respect of the said notices:
1. To appear before the Income Tax Officer and represent me in the proceedings under Section 143(2) and 142(1) of the Income Tax Act, 1961.
2. To submit necessary documents, statements, and information as required by the Income Tax Officer.
3. To make necessary statements, explanations, and submissions on my behalf.
4. To do all lawful acts and deeds necessary for the completion of these proceedings.
I hereby agree to ratify and confirm all lawful acts, deeds, and things done by my said Attorney pursuant to this Power of Attorney.
In witness whereof, I, [Name of Principal], have hereunto set my hands on this [Date].
Signature of Principal: _____________________
(Name of Principal)
Accepted by:
Signature of Agent: ________________________
(Name of Agent)
Witness 1:
____________________________
(Name and Signature)
Witness 2:
____________________________
(Name and Signature)
Signed, sealed, and delivered in the presence of:
Notary Public:
____________________________
```
### Procedure for Attestation and Submission
1. **Stamp Paper**: Purchase a non-judicial stamp paper of Rs. 100.
2. **Preparation and Signing**: Draft the POA as per the above format, sign it, and get it signed by the agent and two witnesses.
3. **Notarization**: Get the POA notarized.
4. **Submission**: Submit the notarized POA to the Income Tax Office when your agent appears on your behalf.
### Adjournment Request
While it is at the discretion of the ITO to grant adjournments, you can request additional time by providing valid reasons. Since the notice explicitly states that no adjournment will be given unless details asked in points 1 to 12 are furnished, ensure that the request for adjournment is accompanied by as much information as possible regarding the required details.
### Handling Undisclosed Income (STCG)
If the client has not disclosed the Short-Term Capital Gains (STCG) from the sale of property in the ITR:
1. **Disclosure**: It is best to voluntarily disclose this information during the scrutiny proceedings.
2. **Tax Liability**: Calculate the tax liability on the STCG and be prepared to pay it along with applicable interest.
3. **Penalties**: The ITO may impose penalties for concealment of income. However, the penalty can sometimes be reduced if the disclosure is voluntary and the tax is paid promptly.
4. **Set-Off**: If the new property purchase qualifies for exemption under Section 54F (if it's a residential property), calculate the exemption amount to reduce the taxable gains.
### Filing Returns
For any backdated returns or current returns:
- **Section 139(9)** (Defective Return): Ensure all required documents are attached to avoid defective returns.
- **Filing Returns**:
- For assessment years where manual returns are allowed, submit physical copies with required enclosures.
- For e-filing, follow the online procedure and attach the necessary documents.
### Incorporation Procedures
If incorporating a new company or converting an association to a company:
1. **Draft MOA and AOA**: Ensure the Memorandum of Association (MOA) and Articles of Association (AOA) are in compliance with the Companies Act, 2013.
2. **Change of Directors**: For changing directors before incorporation, a NOC from the outgoing director and a resolution from the board will be required.
3. **Attestation for NRI Director**: Follow proper attestation procedures for POA and subscriber's pages in MOA for NRI directors.
### Conclusion
Ensure all documents and formalities are accurately prepared and comply with the applicable legal requirements. Consulting a professional for detailed guidance and to handle complex issues is advisable.
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