Income tax audit and notice reply in Chattogram

The common ones are: a notice to file a return you have not filed; a notice that your return has been selected for audit, asking for books and evidence; a notice under section 212 where the Deputy Commissioner believes, from an audit or specific information, that tax has been avoided, asking for a return and payment within the time stated; a show-cause before a penalty, which section 280 says cannot be imposed without a hearing; and the demand notice under section 214 that follows an assessment.

In Chattogram we see notices most often after large cash deposits, a flat or land purchase registered in the city, a vehicle registration, or import and export data that does not match the return. Traders with several bank accounts and landlords who stopped filing after a few years are the usual recipients.

The notice comes from the circle of the Taxes Zone, Chattogram, that holds your file — Zones 1 to 6 cover the city — or, for some large companies, from the Large Taxpayer Unit’s Chattogram branch. The circle and zone come from the address on your e-TIN. If the notice comes from a circle you no longer belong to, that does not make it invalid; you reply to it and, separately, correct your e-TIN address so future letters reach the right place.

Send a photo of every page first; we tell you what else is needed.

A good reply answers the question the notice asks and nothing else, in the order the notice asks it, with each figure traced to a document. If the circle asks about a cash deposit, the reply shows where the money came from — a sale, a loan, a gift from a family member who files their own return — with the paper for each. If the circle asks for books of account, we hand over books that agree with the return already filed. Volunteering new issues, or sending a bundle of unsorted statements, usually lengthens the audit rather than closing it.

The notice sets the date, not us. Most replies can be ready within days if the papers are at hand; audits with several years of bank statements take longer, and we ask the circle for time in writing when that is justified rather than letting the date pass.

If a section 212 notice is ignored, or the return it asks for is filed late or without paying the avoided tax, section 212(2) sends the case to assessment by the Deputy Commissioner — on the circle’s figures, not yours. A demand notice under section 214 states a payment date; apply before it passes and the Deputy Commissioner may extend it or allow instalments (section 214(4)), but miss it and you are treated as a taxpayer in default (section 214(5)).

There is a second reason not to hold back at this stage: under section 288(6) the appeal authority will not accept documents that were not given to the circle in time, unless you had a reasonable cause. And if an assessment does go against you, the 45-day clock for an appeal starts from the demand notice.

Replying to a notice carries no government fee. Our fee depends on the type of notice and how many years and accounts it covers; a request for a missing return is a small job, a multi-year audit is not. We fix the fee in writing after reading the notice.