The Govt. had demonetized Rs500 and Rs1,000 notes on 8 November 2016. Taxpayers were required to deposit the demonetized note till 30 December 2017 in their bank accounts.
Central Board of Direct taxes (CBDT) had sent emails and text messages to around 1.8 million taxpayers whose cash deposits looks suspicious. They were given time till 10 February 2017 to submit their response online; this was later extended to 15 February 2017.
However, many taxpayers have not submit their response even by such extended time. Now, CBDT will issue legal notice under section 133(6) to the taxpayers who haven’t responded to cash verifications within time. However, such notice shall be issued after obtaining the prior approval of Pr. CIT/CT/PR. DIT/DIT.
Notice shall be issued online and tax payers are required to submit online response within the time specified in such notice. If no response was submitted by the taxpayer within specified timeframe then AO couldinitiate action in accordance with the procedure prescribed in the Standard Operating Procedures.
Instruction No.4 of 2017 Dated 03 March 2017