Income tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

18 February 2010 A person Received notice from IT Office that submitted details of transaction of Rs 50000/-

He have no PAN No
He have SB Bank A/c in ICICI Bank
He make Transaction in his SB a/c
Total Credit in SB A/c cash are Rs 10 lac in f/y 09-10 (each credit below 50000/-)

what's can do AO.
what's remeady available to person.

CA Chitresh Gupta

CA Chitresh Gupta (Expert)
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18 February 2010 He need to explain the source and genuineness of entires appearing in the bank statement.

Querist : Anonymous

Querist : Anonymous (Querist)

18 February 2010 if he unable to expain source what's penalty impose them.

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Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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31 July 2024 If a person receives a notice from the Income Tax (IT) Office requesting details of a transaction of ₹50,000 and they do not have a PAN number, here is how the situation can be addressed, including potential actions by the Assessing Officer (AO) and penalties that may apply if the source of funds cannot be explained:

### **Steps the Person Should Take:**

1. **Respond to the Notice:**
- **Provide Details:** Submit a detailed response to the notice, including any available documentation regarding the transaction of ₹50,000 and the total cash credits in the bank account.
- **Clarify Transactions:** Explain the nature of the transactions and provide any evidence such as receipts, invoices, or agreements that support the legitimacy of the transactions.

2. **Obtain and Submit PAN:**
- **Apply for PAN:** Apply for a PAN if not already obtained. PAN is essential for tracking and reporting financial transactions.
- **Update Details:** Submit the PAN details to the Income Tax Department and ICICI Bank to ensure all records are accurate and up-to-date.

3. **Maintain Documentation:**
- **Bank Statements:** Provide complete bank statements showing the credit entries.
- **Source of Funds:** If possible, provide evidence showing the source of the cash deposits, such as salary slips, business receipts, or gifts.

4. **Seek Professional Advice:**
- **Consult a Tax Professional:** Engage a tax advisor or chartered accountant to assist in preparing a response and to ensure compliance with tax regulations.

### **Possible Actions by the Assessing Officer (AO):**

1. **Demand for Clarification:**
- The AO may request detailed information and documentation about the source of the cash credits in the bank account, especially if the total amount is significant and the person has no PAN.

2. **Assessment under Section 68:**
- If the AO suspects that the cash credits are from unexplained sources, they may assess the amount under Section 68 of the Income Tax Act, which deals with unexplained cash credits.

3. **Penalties for Non-Compliance:**
- **Failure to Furnish PAN:** Under Section 272B of the Income Tax Act, if a person fails to obtain or furnish a PAN, they may face a penalty of ₹10,000.
- **Penalties for Unexplained Cash Credits:** If the AO determines that the credits are unexplained and constitute undisclosed income, penalties under Section 271D (for accepting loans or deposits in contravention of Section 269SS) or Section 271E (for repayment of loans or deposits in contravention of Section 269T) may apply.

4. **Possible Tax Liabilities:**
- If the unexplained credits are deemed to be income, they will be taxed accordingly. The person will be required to pay tax on the unexplained amount, and interest may be charged on any overdue tax.

### **Conclusion:**

- **Provide Clear Evidence:** It's crucial to provide clear and accurate evidence to address the notice and resolve any discrepancies.
- **Obtain Professional Help:** Seek help from a tax professional to navigate the process and mitigate potential penalties.

By following these steps, the person can address the notice effectively and minimize the risk of penalties or further legal issues.