In today’s digital age, filing your Income Tax Return (ITR) has become a relatively seamless online process. However, the final and equally crucial step of verification is often overlooked, sometimes with severe consequences. If you’ve filed your ITR but failed to verify it within the stipulated time, you might find yourself on the receiving end of a tax notice from the Income Tax Department. This article delves into why verification is mandatory, what happens if you don’t verify, and how to navigate the situation if you receive a notice.

The Mandatory Nature of ITR Verification

Filing your ITR is only half the battle won. The Income Tax Department mandates verification to authenticate the information provided in your return. Without verification, your ITR remains invalid, as if you never filed it in the first place. Think of it like submitting an incomplete application – it simply won’t be processed.

The Central Board of Direct Taxes (CBDT) has specified a time limit for verification. For returns filed online on or after August 1, 2022, this period is 30 days from the date of filing. For returns filed before this date, the earlier limit of 120 days applied. Missing this deadline can lead to significant repercussions.

The Unpleasant Arrival: Receiving a Tax Notice

If you’ve neglected to verify your ITR within the prescribed timeframe, the Income Tax Department may issue a notice to you. This notice could be under various sections of the Income Tax Act, often indicating that the department considers your return as not filed.

Why Would You Receive a Notice for an Unverified Return?

Consequences of Not Verifying Your ITR

Ignoring the verification step can lead to a cascade of negative outcomes:

  • Return Treated as Invalid: This is the primary consequence. Your efforts in filing the return become futile.
  • Late Filing Penalties: Since an unverified return is considered non-filing, you may be liable for late filing fees under Section 234F of the Income Tax Act. This can range from ₹1,000 to ₹5,000 depending on your income.
  • Interest on Outstanding Tax: If you have any tax liability, interest under Section 234A will be levied from the due date of filing until the date of actual filing (which is considered the date of verification in case of delayed verification).
  • Loss of Carry Forward of Losses: You may not be allowed to carry forward certain losses to future assessment years, which could have helped reduce your tax liability.
  • Delayed or No Refund: If you were expecting a tax refund, it will not be processed until your return is considered valid, i.e., verified.
  • Scrutiny and Further Action: The Income Tax Department may take further action, including initiating scrutiny of your financial affairs.

Received a Notice? Here’s What You Need to Do

Receiving a tax notice can be concerning, but prompt action is crucial:

  1. Authenticate the Notice: Before panicking, verify the legitimacy of the notice. You can do this on the official Income Tax e-filing portal under the “Authenticate Notice/Order issued by ITD” section. Ensure the Document Identification Number (DIN) on the notice matches the records.
  2. Understand the Reason: Carefully read the notice to understand that it pertains to the non-verification of your ITR.
  3. Don’t Ignore It: Ignoring the notice will only worsen the situation and could lead to penalties and legal repercussions.
  4. Verify Your ITR Immediately: The first and foremost step is to verify your pending ITR without delay. You can do this online through various methods:
  5. Submit a Condonation Request for Delay: Since you’ve missed the verification deadline, you’ll likely need to submit a “Condonation of Delay” request on the Income Tax e-filing portal. You’ll need to provide a valid reason for the delay in verification. The department will review your request, and upon approval, your return will be considered verified.
  6. Respond to the Notice: Once you have verified your ITR and submitted the condonation request (if applicable), you should respond to the tax notice. Explain that the delay in verification was unintentional and that you have now completed the process. Provide the acknowledgement number of your verified ITR and the condonation request reference number.
  7. Keep Records: Maintain copies of the tax notice, your verified ITR acknowledgement, the condonation request, and your response to the department for future reference.
  8. Seek Professional Help: If you find the process overwhelming or are unsure about how to proceed, it’s advisable to consult a tax professional. They can guide you in drafting a suitable response and ensure compliance.

Prevention is Better Than Cure

The best way to avoid receiving a tax notice for non-verification is to be proactive:

  • Verify Immediately After Filing: Don’t delay the verification process. Complete it as soon as you’ve filed your ITR.
  • Choose a Convenient Verification Method: Explore the various online methods and choose one that suits you best.
  • Keep Track of Deadlines: Be mindful of the 30-day verification window.
  • Ensure Contact Details are Updated: Make sure your mobile number and email ID are updated with both Aadhaar and the Income Tax Department, as these are crucial for OTP-based verification and receiving notifications.

Conclusion

An unverified Income Tax Return is akin to an incomplete task, and the Income Tax Department takes this seriously. Receiving a tax notice due to non-verification is a situation that demands immediate attention. By understanding the importance of verification, acting promptly upon receiving a notice, and taking steps to rectify the situation, you can mitigate potential penalties and ensure your tax compliance. Remember, completing the verification process is the final seal of approval on your ITR filing journey.

FAQ’s

1. Why do I need to e-Verify?
You need to verify your Income Tax Returns to complete the return filing process. Without verification within the stipulated time, an ITR is treated as invalid. e-Verification is the most convenient and instant way to verify your ITR.

You can also e-Verify other requests / responses / services to complete the respective processes successfully, including verification of:

2. What are the different ways in which I can e-Verify my returns?
You can e-Verify your returns online using:

  • OTP on mobile number registered with Aadhaar, or
  • EVC generated through your pre-validated bank account, or
  • EVC generated through your pre-validated demat account, or
  • EVC through ATM (offline method), or
  • Net Banking, or
  • Digital Signature Certificate (DSC).
     

3. I have filed my return more than 120 days ago. Can I still verify my returns online?
Yes. You need to submit request for condonation of delay (refer to the Service Request user manual) by providing an appropriate reason for the delay. But the return will be taken as verified only after approval of the condonation request by the Income Tax Department.
 

4. Can an Authorized Signatory / Representative Assessee e-Verify the return on my behalf?
Yes. The Authorized Signatory / Representative Assessee can e-Verify the return on behalf of the assessee using any of the following methods:

5. How will I know that my e-Verification is complete?
In case you are e-Verifying your return:

In case you are an Authorized Signatory / Representative Assessee:

  • A success message will be displayed along with a Transaction ID
  • After successful verification, an email confirmation will be sent to the primary email ID of both Authorized Signatory’s / Representative Assessee’s and your email ID registered with e-Filing portal
     

6. When am I required to file / apply for condonation of delay?
It is suggested to file a condonation request as soon as you notice that you have not verified your return even after 120 / 30 days of filing.

Important Note:

Please note vide Notification No. 5/2022 dated 29.07.2022,  w.e.f. 01/08/2022 the time-limit for e-verification or submission of ITR-V shall  be 30 days from the date of filing the return of income.

However, where the return is filed on or before 31.07.2022 the earlier time limit of 120 days would continue to apply.
 

7. My registered mobile number is not updated with Aadhaar, can I still e-Verify my return using Aadhaar OTP?
No. You need to update your mobile number with Aadhaar to e-Verify your return using Aadhaar OTP.
 

8. My demat account / bank account is inactive, can I e-Verify my return with this account?
No. You need to have an active demat account / bank account which needs to be pre-validated and EVC-enabled on e-Filing portal to e-Verify your return using your demat account / bank account.
 

9. Will delay in e-Verification attract any penalty?
If you do not verify in time, your return is treated as not filed and it will attract all the consequences of not filing ITR under the Income Tax Act, 1961. However, you may request condonation of delay in verification by giving appropriate reason. Only after submission of such a request, you will be able to e-Verify your return. However, the return will be treated valid only once the condonation request has been approved by the competent Income Tax Authority.
 

10. What is EVC?
An Electronic Verification Code (EVC) is a 10-digit alpha-numeric code which is sent to your mobile number and email ID registered with the e-Filing portal / bank account / demat account (as the case may be) during the process of e-Verification. It has a 72-hour validity from the time of its generation.

11. What to do in case ITR-V is rejected?
You can see the reason for rejection on your e-Filing Dashboard. You may send another ITR-V or choose to e-Verify the ITR online.
 

12. What are the benefits of e-Verification?

  • You do not need to send a physical copy of your ITR-V to CPC, Bangalore.
  • Verification of your ITR happens instantly, which saves you from the delay in transit of ITR-V.
  • You can e-Verify using any of the various methods – Aadhaar OTP / EVC (using pre-validated bank / demat account) / Net Banking / Digital Signature Certificate (DSC).
     

13. Is it mandatory to e-Verify your return?
No. e-Verification is just one method of verifying your filed ITR. You can choose either of the two methods to verify your filed ITR:

  • e-Verify returns online, or
  • Send a physical copy of your duly signed ITR-V to CPC, Bangalore.
     

14. I have filed ITR and sent the physical copy of ITR-V to CPC. However, I received a notification from CPC that they have not received the ITR-V and 120 / 30 days have lapsed since the date of filing. What can I do?
You can e-Verify your ITR online after submitting a condonation request. 
 

15. What is the difference between pre-login e-Verification and post-login e-Verification?
You can choose to e-Verify your filed ITR before or after logging in to e-Filing portal. The only difference is that while using the pre-login service, you will be required to provide the details of your filed ITR (PAN, Assessment Year and Acknowledgment Number) before e-Verifying the ITR. If you choose to use the post-login service, you will be able to choose the respective record of ITR filed rather than provide any such details before e-Verifying the ITR.
 

16. Can I e-Verify my ITR using Digital Signature Certificate?
Yes. DSC is one of the ways to e-Verify. However, you will be able to e-Verify using Digital Signature Certificate (DSC) immediately after filing your ITR.

You will not be able to choose DSC as a preferred option to e-Verify in case you have selected the e-Verify Later option while submitting Income Tax Returns.