Seeking information from client for drafting reply to Show Cause Notice (SCN) issued by CIT under section 263 of the Income Tax Act, 1961 for revision of assessment order.- Fourth article in the series

[C.A. DEV KUMAR KOTHARI]

Seeking information from client

For drafting of reply to SCN and making paper book and written submission etc. necessary information is required to be gathered from the client. In this article an attempt is made to prepare a model letter to be given to client for seeking relevant information.

While seeking information some information for preparation of case to be represented before CIT will also be gathered. The client, his executives, other consultants who represented the client on similar matters in relevant year and some  other years or before other authorities  are the best persons who can provide these details and information.  Even in case of regular clients, lot of information may not be available with tax consultant and the information is required to be obtained. In any case a latest update on issues, in the case of client, can be best provided by the client.

Expertise and responsibility is shared:

By seeking and sharing information from client in a proper and systematic manner, besides better drafting of documents expertise of client on facts and developments and peculiar knowledge he has of his case, and responsibility is  shared.

Open channel of communication:

Seeking information and views of client also instill concept of open and two way communications between professional and client and his team. That helps in taking work in a team spirit. It is experienced that with such open channel, the preparation can be improved a lot.

The series:

In this series of articles author wish to write several articles, the first one, hosted on 21.05.2010 was  about  seeking information in case of departmental appeal. The second article, webhosted on 31.05.2010 was about seeking information from client when an appeal filed by client is to be prepared, and the third article webhosted on 15.08.2010 was to seek information required to prepare and draft appeal documents for filing appeal before ITAT, against order passed by CIT(A). Now the fourth article is for seeking information to make reply to SCN u/s 263 and related issues.

Relevant provisions:

The articles in this series will contain only guiding material and information. While preparing list of information sought, the consultant need to see relevant provisions, and seek necessary additional information. Some information included in the list may not be relevant in all cases, in that case the client can be asked to write  not applicable NA. The letter and questionnaire need to be modified suitably depending on the law under which document is to be prepared and  filed.

Draft letter to client  when information and documents are sought to draft a reply to sCN u/s 263 is appended below:

From  CA/ Advocate / Tax Consultant                                                                                   

M/s….    Client .

Dear Sir,  

Reg: REPLY TO NOTICE U/S 263 - GENERAL REQUIREMENT FOR PREPARING FOR REPLY TO SCN AND REPRESENTATION BEFORE THE CIT.

Please refer to discussion we had.

I append below preliminary requirement of documents and information for preparation of reply to Show cause notice issued by CIT u/s 263 of the Income –tax Act, 1961 and paper book, etc. and to prepare for representation of assessee before CIT .

Please send me documents in soft form, as far as possible and a set of all documents in hard copy with index and flags on relevant documents and highlights for a review.

The following documents are required for preparation of REPLY:

Description	Sent by client  ref. of particular page nos.	Remarks of client		My Remarks
Notice  U/S 263
Any other notice of hearing and notice of adjournment, reasons and application for adjournment sought earlier, if any.
Assessment order  or other order in respect of which the CIT has issued notice with high lights about matter covered in notice u/s 263. Connected orders, if any e.g. original assessment orders, revision order, set aside orders etc, if any.
Copy of requisition issued by the AO highlighting enquiry about matters covered in SCN u/s 263.
Order of CIT(A)/ ITAT on similar or related issue for the same year or any other year with highlights.
Relevant details on the issues covered under SCN of the CIT as filed before the AO
Relevant details on the issues covered under SCN of the CIT  which were not filed before the AO.
Written submissions and documents filed before AO on relevant issues.
Written submissions and documents filed before CIT (A) / CIT on relevant issues for the same year or any other year.
Details of hearings ( dates) and matters discussed with AO.
In case the assessment order is not speaking on related issues, provide a note from the representative who attended assessment proceedings about discussions which he had with the AO. In case of need a declaration from him may be obtained.
Computation of income, revised computation of income etc. filed before AO.
Annual Report,
Tax audit report.
Any  other or additional documents, evidences which assessee intend to file and rely.
About issues  in SCN issued by CIT for   each issue:
Any earlier order of ITAT/ HC/ SC in favor of assessee with present status. Any earlier order of CIT(A) which has attained finality as department did not file appeal. In your case or any other case known to you. Any earlier order of AO in favor of assessee which has attained finality.
Any opinion taken or departmental note prepared at stage of planning to prefer such claims.
Any other information which you consider relevant.

Note:

The documents/ sheets, relevant paragraphs, matters relevant to the appeal to be represented may be highlighted/ flagged.

A brief note / summary may be provided.  

Regards,

Yours sincerely,

Request from readers:

Readers are requested to send their feedback and comments to share their knowledge and experience.