Income Tax return: 68,000 cases to be e-verified for income mismatch in AIS, ITR for FY 2019-20

ITR filing: Under the e-verification scheme, which is being seen as a measure to increase transparency and reduce litigation, the taxpayers have time of 15 days to respond to the first notice sent by the tax department to correct any information not reported earlier or for any under reporting of income in tax returns for 2019-20 fiscal.

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With a nudge to taxpayers to file updated returns in cases of mismatch found between their Annual Information Statement (AIS) and tax returns, the Income Tax Department has picked up around 68,000 cases for e-verification in its initiative to promote compliance. Central Board of Direct Taxes (CBDT) Chairman Nitin Gupta on Monday said these were selected on pilot basis for cases pertaining to 2019-20 financial year and taxpayers have time till March 31 to file updated returns.

So far, a total of 15 lakh updated returns, including returns in the e-verification scheme, have been filed by taxpayers, which has resulted in total collection worth Rs 1,250 crore.

Under the e-verification scheme, which is being seen as a measure to increase transparency and reduce litigation, the taxpayers have time of 15 days to respond to the first notice sent by the tax department to correct any information not reported earlier or for any under reporting of income in tax returns for 2019-20 fiscal. The taxpayer can reply to the tax department giving explanation for the mismatch or can file updated returns if they feel the mismatch flagged in e-verification notice is correct.

“On a pilot basis, about 68,000 cases pertaining to the 2019-20 fiscal have been taken up for e-verification based on risk management parameters set by the department. Of this, in 56 per cent cases or 35,000 cases the taxpayers have already satisfactorily replied to the notice or filed updated tax return,” Gupta said.

However, no response has been received in the remaining 33,000 cases. Taxpayers have time till March 31, 2023, to file updated returns for income earned in 2019-20 fiscal.

“Once an assessee files updated ITR, there are less chances of his/her case getting picked up for scrutiny or re-assessment,” Gupta said. The risk parameters for picking returns for e-verification would be set every year, Gupta said, without disclosing the criteria for selection of an ITR for e-verification.

“The 68,000 cases picked up for e-verification was based on mismatch between tax return filed and the data received from source with regard to deposits. The selection is computer driven. If you do not respond to the e-verification notices, chances are high that the case would be selected for scrutiny,” Gupta said.

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Urging taxpayers to view his/her AIS regularly, Gupta said taxpayers should give feedback to the department if they see any mismatch. “The e-verification scheme is a non-intrusive way to nudge taxpayers to file updated returns in case of mismatch. It is transparent, without any human interface, encourages voluntary compliance and would help cut down litigation,” he said.

The CBDT has a timeline of 90 days for completing a particular case under e-verification, but complicated cases could take longer. The e-verification scheme was notified on December 13, 2021, and the pilot was launched in September 2022.