My one of friend has received notice for AY 2011-12 for non filing of ITR of her grandmother. AO has gathered information from AIR that Rs 10 lacs was deposited in her saving bank account during year and bank has credited interest at which TDS has been deducted. Mr. Saurabh & other family members use to deposit cash to her account out of their saving from salary. Smt Vimla Devi (Grandmother of Saurabh) has no other income except interest amount credited by bank at amount deposited by her son/grand son. 1. Can you please clarify whether action of AO is justified? 2. What action should be taken by Saurabh in this case? 3. If saurabh furnishes information that above deposit of cash to her grandmother' saving bank account was made by them, can AO ask for additional information like statement of other family members to trace these transactions?
15 November 2015
Answers to your points: 1. AO is justified in seeking information in assessing the true income of an assessee.AIR information is one way of gathering financial information of persons and to verify whether they have been correctly shown in the returns filed by assessees or not. This may bring in new assessees. 2. As the bank account as well as TDS relates to Smt Vimala Devi, she is liable to tax. The grandsons, if they have sources of funds, may establish that these amounts have been gifted to her, if the dates of drawings from their accounts correspond with the deposit dates of Smt.Vimala Devi. 3. AO may seek additional information of the family members. In view of the above, gather information from the family and prepare a letter. If required file IT return and claim TDS after checking form 26 AS.
15 November 2015
Dear Shiva, Thanks for your reply.
Family members have gifted these amounts approx Rs. 20 lacs to Ms Vimla Devi during the year. Interest was paid by the bank at such amount. As Vimla devi has no other income so necesary tax exemption certificate i.e. Form 15G was also provided but bank deducted TDS on interest amount credited. Due to ignorance of facts, no ITR for respective year was filed. 1. As due date of filing of return is passed, is it alternate possibility to file ITR for AY 2011-12?? 2. If information of other family members are gathered & submitted to AO then what could be implications if amounts are not matching one by one with accounts of Vimla Devi??
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