Now days, flexi working, target based working, or assignment based jobs and other such variants of the jobs are emerging. As we know, an employer is supposed to deduct TDS from the payments made to an employee. However, while an employee is not able to claim deduction of expenses incurred by him in discharge of his duties, a professional is entitled to claim deduction of the expenses.

Where an assessee fails to prove the transaction in the manner required by the Assessing Officer, it need not call for penalty for concealment of income. Quite often, hapless assessees resort to surrender of income ‘Voluntarily’ (or should we call Coercion- pun intended) to avoid protracted proceedings, then assessing officer can not proceed to levy penalty.

In an interesting case, Assessing Officer served the notice u/s 143(2) to an assessee by registered post which was returned undelivered by postal authorities with the remark that “the said plot does not exist”.  The address to which the notice was posted inadvertently missed an alphabet ‘B’ in the address, as a result of which the service of the notice could not be made by postal authorities.

In the instant case, the Assessing officer carried out ex-parte assessment and passed assessment order and demand notice.

The
issue that assessees who would like to plan their Long Tax Capital Gains Tax
Liability by investing in residential property, whether the investment is
limited to one property or they can acquire number of residential houses has
been a controversial one.

Experiences abound about assessees, whose expenses are summarily and arbitrarily rejected by Assessing Officers for years and even appeals or directions under section 144 do not yield much results. Income Tax Laws are sufficiently vague.  Problems actually get compounded if you are a medium size business who can not afford litigation costs of Appeals beyond a point.

It is quite commonplace practice for assessees to show the deficit amount in their books as Gift or Loan. Quite often, an assessee has shortage of cash in his books, he finds a person who can ‘Gift’ him some money or provide “loan’ to him.

Central Board of Direct Tax (CBDT) has vide, INSTRUCTION F.NO.225/26/2006-IT A-II (PT.). DATED 23.05.2007, issued fresh norms of scrutiny of Cases on the basis of data in Air returns and subsequent assessment proceedings.

On the issue of selection of cases for Scrutiny, few years back we had a regime that case was selected on the basis of random number generated by the computer. Before this, the cases were recommended to be selected for scrutiny by Assessing Officers on the basis of reasons to be recorded by him.

Even though with your experience and online help and tools available to prepare your return, your return may still be prone to blunders leading to fine, penalties excess income tax or in some cases may be even scrutiny for deficient return.

It would, therefore, be a better idea, to observe certain precautions and keep back up papers before preparing the return of income tax to avoid any hassles at a later stage.

If you are served Show Cause Notice (God Forbid) as to why you should not be imposed penalty under Section 271(1)(c) of the Income-tax Act, 1961, Come out Speak truth and not offer explanation just to escape penalty.

This is what Appellate Tribunal Delhi Bench expects assessee to do. In the case, involving Penalty for concealment of income, the question came up before ITAT that whether in penalty proceedings, authorities are duty-bound to consider whether explanation offered by assessee is fair and reasonable or he is offering a false explanation to get over effect of penal consequences.