Responding to Various Tax Notices

Upon filing your income tax return, you may find yourself receiving any one of the following notices:

1. Notice u/s 139(9): If you receive a notice under this section, then you have most likely made a mistake in the filing of your taxes. You may have:

# Used the wrong ITR form

# Not paid the entire taxes due

# Wrong PAN or PAN mismatch

# Claimed deductions but not stated the income source

After receiving this notice, simply log onto the http://incometaxindiaefiling. gov.in/e-Filing/ , select "In response to notice u/s 139(9)", and make the necessary changes and upload the correct information.

2. Notice u/s (148): You will receive this notice, if you have neglected to mention an income source or calculation. If the amount highlighted is more than Rs 1 lakh, then the notice can be sent anytime within a six-year time-frame and if it is less than Rs 1 lakh, then the notice can be sent anytime within four years from the end of the assessment year. So, if you are the recipient of this notice, you must ensure you file your return within the time limit specified by the assessing officer (AO)

3. Notice u/s 143(2): The notices under this section can be any of the following three, the last two of which are computer assisted:

1. Manual Scrutiny - After having been approved by the Income Tax Commissioner, the personally picked notice by the AO, will be sent.

2. Complete Scrutiny - When major inconsistencies are found, a thorough scrutiny of your return will be done.

3. Limited Purpose - When a few minor details are found to be inconsistent and need further clarification.

Upon receiving this notice, you will be called for a hearing to respond to the notice. Before appearing, collect all your return and other important documents and based on the clarification given by you at the hearing, one of the following will be the results:

1. If AO is satisfied with the information and clarification provided by you, he will pass the order u/s 143(3) without any addition.

2. If the AO feels that you have not reported all your income and he feels justified in making additions to your income, he will issue an order, whereby the additional income will get added and raise a tax demand u/s 156.

In case during the assessment proceedings you do not respond to the notices issued by the AO or without adequate reasons fail to submit the required document and information, then the AO may,

# Raise Penalty u/s 271(1)(b) - a penalty of Rs 10,000 maximum for each failure to respond

# Pass a Best Judgement Assessment Order, based on the information available with him

# May also impose a penalty of 50-200% of the amount of tax sought to be avoided as per the assessment order

# In rare cases, u/s 275D, you may face prosecution.

4. Penalty u/s 234(F): Pertinent to salaried individuals, who up until recently, were not diligent in filing their returns on time by July 31st of the assessment year. If the returns are not filed on time, then the individual can be fined a maximum penalty of Rs 5,000, depending on the decision of the AO. But starting with assessment year 2018-19, if filed after July 31st and before December 31st, then a minimum fine of Rs 5,000 will be levied. If it is filed after December 31st, then the individual will be fined a minimum of Rs 10,000. But, for individuals whose income is below Rs 5 lakh, they will face a penalty of Rs 1,000 maximum.

5. Notice u/s 143(1): This is simply an intimation in response to the tax return filed by you, which will do one of the following:

# The return filed by you matches the assessment of the AO and no further action is required

# You will be issued a refund, through the bank account stated in the return, as the amount of taxes paid is more.

# A demand notice, as you have paid less than the required amount of taxes and taxes are due by you, which will need to be paid within 30 days of receiving the demand.

6. Notice u/s 143(1A): If there is any mismatches, such as you have not included in your return all the income as reported in your 26AS, then these computer-assisted notices will be sent seeking necessary clarification. You will need to respond to this notice within 30 days by logging onto the income tax portal and uploading the proof needed to correct the mismatch.

While tax notices may not be as exciting as the fake winning prize notices, they are real and the prize that you will receive if unanswered or ignored will definitely not put a smile on your face.

Scenrio Based Questions

1) You have a page with Standard Controller and one Extension class.In Extenstion class you have a method name called save().Now when your invoking save() method from page whether it will execute Standard Controller save() method or Extension class save() method?

Ans : The Save() method from the Extenstion class will be executed.

2) In a trigger you have addError() method and below that statement you have a System.debug() statement.If addError() method is executed in trigger in that case whether System.debug() statement will be executed or not?

Ans : Yes,Even after addError() method got executed the execution will not be stopped at that line and it will executes below the System.debug() statement also.

3) If in your organisation Person Account feature is enabled.Whenever your converting the Lead how you will decide which Account(Business or Person) to be created?

Ans : Based on the company field value on Lead we will decide whether to create Business Account or Person Account.If Company field value in Lead object is blank then we will create Person account on it's conversion and If Company Field value on Lead object is not blank we will create Business Account

4) How will say particular lead is a Business Lead or Person Lead?

Ans : Based on the company field value on Lead we will decide whether that Lead is Business Lead or Person Lead.If Company Field value is blank then it will be treated as Person Lead,If not it will be treated as Business Lead

5) Lets assume your having a object called Quotes and it is having 4 fields.Now I want to add one extra field to each and every record in Quote object without creating it in Object and I want to display list of Quote records on visual force page with 5 fields not with only 4 fields.

Ans : Whenever your working with these type of scenarios (i.e., Add extra field to each and every record in object actually not creating that field in object) we have to use Wrapper class concept which will add one or more fields for each and every record.

6) When you will end up with MIXED_DML_OPERATION error in Salesforce?

Ans: With in a single transaction if you are trying to perform dml operations on setup objects and non-setup objects with same user(Logged in user) than it throws that error.To avoid that error we need to perform DML on Set up objects with logged in user and on non setup objects with some other user using System.runAs() and vice versa

7) What are the limitations/considerations for Time-Dependent Workflow?

You can not write time-dependent action on workflow rule Evaluation Criteria of type Every time the record is created or updated.

Maximum you can write 10 time dependent triggers per one rule

Maximum of 40 actions only allowed per time trigger.

Workflow default user must be set up before creating time-based rules

Precision limited to hours or days

Cannot convert leads with time-dependent actions in the Workflow Queue.

Time triggers cannot be added to or removed from activated workflow rules

 

8) While setting OWD (Organization wide sharing), can we change/modify the setting of child record in case of Master-Detail relationship?

Ans: No, child record is controlled by parent settings.

9) In case of Master-Detail relationship, on Update of child record can we update the field of Parent record using workflow rule?

Ans: Yes, the Master fields are also available for evaluation criteria.So, we can acheive this with workflow.For more information please visit this post

10) Who can access “drag and drop dashboard”?Which type of report can be used for dashboard components?

Ans : User who have permissions in managed dashboard can access drag and drop dashboard.Summary reports and Matrix reports are used for dashboard components.