scrutiny letter

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rupesh

rupesh (Querist)
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18 November 2009 hi,
i am c.a. student
can anyone give me how to reply scrutiny letter of income tax department

Sunil

Sunil (Expert)
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18 November 2009 Assuming that assessee is Individual having Business, Firstly your AO will not want to take the case up unless it is urgent on account of time barring. Therefore he will want to adjourn the case to a date after his time barring cases are completed. If you receive notice for AY 2008-2009, chances are he would want to take up case only after 31/12/2009 when is time barring for AY 2007-2008 is over. On date of hearing you ask for adjournment and also file a letter of Authority on Non Judicial Stamp paper authorising CA, Employee or relative to attend and make submissions.

When the case is taken up for hearing, first of all submit documents in support of your income and deductions. Submit all TDS Certificate. Give copies and show original for verification. Present a computation, balance sheet of business as well as individual basis, profit and loss account. Ensure that all credit entries to your bank personal passbook is accounted for in your interest or other exempt incomes. Make a cash flow statement and submit it.

After all this is done, AO will start his procedure and call for more details. he will ensure that you have accounted all interest incomes accrued in the year and he will also go through your business receipts / turnover and expenses. If TDS is required for certain expenditures, he will ask for details. He may ask you for details of single parties having transaction of particular amount in the year. Submit them as required. If he proposes any additions he will inform you his justifications. You can submit your dispute also. Mostly assessees refer to other tribunal judgements or HC to SC judgements. This is important especially if you have to appeal after order is passed.

This is briefly what happens. Everything depends on your individual case.