Income Tax: In many cases, the interest on unpaid dues has increased to exceed the original tax amount. These demands may be justified in themselves. These demands, based on notices and assessment orders issued years ago, can add to the department’s difficulties.
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Income Tax: Old tax demands are appearing on the Income Tax portal. These include demands from 2009-11 and even 2005. This has left taxpayers confused. They are unsure about the reason behind these demands. Some taxpayers are even questioning the validity of these demands.
In many cases, the interest has exceeded the original tax amount.
The Economic Times reported that in many cases, the interest on unpaid dues has increased to more than the original tax amount. The sudden appearance of very old demands may be due to the Income Tax Department’s digitization efforts. The department is digitizing old records on the Income Tax portal.
These demands, issued years ago, can increase difficulties
According to the Economic Times, the sudden appearance of old tax demands has created a difficult situation for both tax authorities and taxpayers. While these demands may be justified, they are based on notices and assessment orders issued years ago, creating difficulties for the department.
According to the established rules, the deadline for action on notices has expired.
For example, the deadline for issuing notices for assessments of more than ₹1 lakh for the financial year 2009-10 was March 31, 2027, as per the then-current rules. The assessment order had to be passed by December 31, 2027. After that, a demand notice would normally be issued. Taxpayers then had 30 days from the date of receipt of the order to file an appeal before the Commissioner of Income Tax (Appeals).
Assessees can claim they never received their demands.
However, the Economic Times has found that many assessees can now claim they never received their assessment or demand orders. They were either not delivered or sent to the wrong address. This denied them the opportunity to appeal within the stipulated time. Meanwhile, interest on the outstanding amount continued to accrue each year. In such cases, taxpayers can request proof of delivery from the Income Tax Department.
This issue could indicate a procedural lapse.
Ashish Karundia, founder of Ashish Karundia & Co., told the Economic Times, “The onus lies squarely on the tax authorities to prove that legal notices were duly served and that assessment and demand orders were communicated within the prescribed timeframe.” The sudden appearance of old tax demands could indicate a procedural lapse in the communication of tax orders.
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