Fake notice from Income Tax Department: Know how to spot a sham notice sent by a scamster

Receiving an income tax notice can be very stressful for many people. However, it’s important to be cautious as not all income tax notices may be genuine. Fraudsters may attempt to scam you by sending fake income tax notices. The Income Tax Department sends a tax notice to individuals for various reasons like if the taxpayer’s income tax return (ITR) is selected for scrutiny, survey, tax demand outstanding, etc. However, there are established guidelines and protocols to be followed in sending a tax notice.

We tell you how understanding the notice process will help you identify a fake notice claiming to be from the income tax department.

When you receive a tax notice, it’s essential to pay attention to details. Take your time to read through the entire notice carefully, as scamsters often rely on your lack of attention. This careful reading will help you avoid falling for their tactics and prevent a panic reaction.

“One of our clients recently received emails and messages purporting to be from the Income Tax Department. These messages pressured the client to click a link and make an immediate tax payment to avoid penalties and legal repercussions. The notices used official language and alarming threats to create a sense of urgency. Fortunately, our client remained cautious and brought the matter to our attention,” says CA Pranjal Bansal, Partner A A P T & Associates, a Chartered Accountancy firm.

Guidelines followed by the tax department while sending an income tax notice

Various tax experts share the guidelines followed by the tax department while sending an income tax notice.DIN number in an income tax communication: All notices are compulsorily to be computer system generated with Document Identification Number (DIN) effective from October 1, 2019. “CBDT issued Circular No. 19/2019 dated August 14, 2019, mandating issue of notice by computer generated DIN to bring in transparency and accountability,” says Ramakrishnan Srinivasan, former chief commissioner of Income Tax Department.Notice will be visible in the e-filing ITR portal also: Most income tax notices are sent electronically, and its contents can be verified by viewing the actual notice in the e-filing ITR portal. This is because once a tax notice is sent, the same notice is uploaded on the e-filing ITR portal. “You can cross check said notices at different tabs of the portal,” says Mihir Tanna, associate director- direct tax, S.K Patodia LLP. As per Tanna, here are the places where you can search for and find an income tax notice (if any was sent):
1) Under the ‘e-File’ tab there is an option to check ‘view filed return’ for intimations sent for the respective year,
2) Under the ‘Pending Actions’ tab there is the option ‘e-Proceeding”. Notices can be found here under two sub-parts- self PAN and other PAN/TAN.
3) Under the ‘Pending Actions’ tab, there is an option to access the ‘Compliance Portal. ‘ Notices and intimations can also be found here.

Each sub-part of the e-Proceedings tab is further divided into ‘for your action’ and ‘for your information’ tabs. “If the timeline of replying notices is crossed or proceedings are closed, notice is transferred from ‘for your action’ to ‘for your information’,” says Tanna.

Income tax’s official domain IDs will be used for sending the notice: Domain names are another aspect that the tax department will meticulously follow while sending the notices over email. “Most income tax officers send notices directly from the official id which is usually created at domain ‘@incometax.gov.in’. You will observe that said official email ids are also created in a unique way. e-Mail will start from the city (Mumbai, Delhi etc) followed by designation (ITO, DCIT, Systems, etc) followed by ward number [1(1), 2(1)] @incometax.gov.in,” says Tanna.

For example: the email ID of Joint Director (Systems) Sh. P. Krishnamoorthi is- bangalore.jd.systems3.cpc@incometax.gov.in

Some notices will be sent directly by the tax officer and may be followed up with a call after being sent: “In some cases like dispute resolution panel (DRP) hearing notices, notice under section 131, section 133, and notice(s) under other sections, the tax department will directly send the notice to the taxpayer’s registered email address. However, these notices will be sent from the official Income tax domain ID (incometax.gov.in) and will have the assessing officer’s identification and other details. However, these emails are for intimating (the taxpayer) about certain information and will never have any payment link, etc,” says Sanjay Sanghvi, Partner at Khaitan & Co, a law firm.

Sanghvi shares his personal experience “I have also noticed that when the tax department sends any notice, I get a SMS and email notification about it. Sometimes for DRP cases, calls are also made by the DRP secretariat office intimating about the notice of hearing. This SMS will be sent from the Income tax department and not from any private mobile number,” he says.

How to verify the authenticity of a tax notice?

There is a functionality on the e-filing ITR portal that can be utilised to verify any communication from the income tax department, including notices, orders, summons, and letters.

“To ensure the authenticity of these communications, one should check for a Document Identification Number (DIN), a unique identifier present in all communications from the Income Tax Department issued after October 1st, 2019. However, do note that this functionality which is available on the income tax e-filing ITR portal primarily verifies the authenticity of the communication, not its contents,” says Bansal.

Here’s a step-by-step guide on how to verify the authenticity of an income tax notice:

Step 1: Go to the ITR e-filing portal-https://www.incometax.gov.in/iec/foportal/ and click on ‘Authenticate notice/order issued by ITD’ button under quick links.

Source: ITR e-filing portal

Step 2: A new webpage will open, and it will have two options- PAN based search and DIN based search. The PAN based search option can used for verification of the communication from the tax department by entering the PAN, document type, date of issue, and mobile number. Alternatively, the DIN based option can verify the communication when the DIN and mobile number is entered and is validated by an OTP.

If the tax communication by the tax department does not have a DIN, it will be invalid.

“You do not need to take any action or respond to such a communication from the department,” says Srinivasan.

Source: ITR e-filing portal

How to spot a fake income tax notice?

Scamsters have only one intention behind sending a fake income tax notice- to get as much money from you as possible in the name of tax payment. So, you will see there is a payment link, etc inside the notice document or email.

“The income tax department will never send any payment link inside the notice email or the notice document. The contents of the notice will explain why the taxpayer was sent such a notice. To pay any outstanding income tax amount, the income tax department will always urge taxpayers to use the e-filing ITR portal’s e-pay tax option. It is only fraudsters who will put a payment link inside a notice, email or document,” says Sanghvi.

Srinivasan shares some insights about who can send a tax notice and when.

“The central processing centre (CPC) can issue notice after filing an ITR for clarification and this notice will be sent only by the officer having jurisdiction over the case. If an ITR is taken up for scrutiny, then all subsequent notices are issued by the National Faceless Authority where the identity of the officer is not disclosed to the taxpayer. Further any email sent will only originate from designation-based email id given by the tax department. If the taxpayer receives any notice through personal email ID, it would be fake,” he says