Mr. Alok Verma, a 65-year-old retired engineer living in the city of Prayagraj, recently found himself in a perplexing situation. He received a formal notice from the Income Tax Department concerning some investments he had made back in 1998. The notice demanded that he furnish copies of his Income Tax Returns (ITRs) for the assessment years 1998-99 and 1999-2000 to validate the source of funds for those investments. Mr. Verma was given a very short deadline of 15 days to respond.

Panic set in as he realised that these returns were filed manually over two decades ago. The paperwork, if it still existed, was likely lost during multiple house moves over the years. The concept of a digital income tax portal didn’t exist back then, so there was no online repository to fall back on. He was worried about the severe consequences of non-compliance, including heavy penalties and potential legal action. His case highlights a common problem faced by many individuals who are suddenly required to produce very old financial documents for legal or tax-related scrutiny.

Advice in such cases

Receiving a notice for old records can be daunting, but a structured approach can help manage the situation effectively.

• Do not panic. Read the notice carefully to understand exactly what is being asked and for which specific years.
• Begin by searching your old files, cupboards, and any storage spaces where you might have kept financial documents. Look for ITR acknowledgements, full return forms, bank passbooks, or any related correspondence.
• Contact the jurisdictional Assessing Officer (AO) of the Income Tax Department. You can find this information on the notice itself. It is possible to request copies of your old returns from their records, although the availability of such old physical files is not guaranteed.
• Prepare a written application to the AO, formally requesting the required documents and also seeking an extension of the deadline to file your reply. This shows your intent to comply.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.

Applicable Sections of Law

This situation is primarily governed by the Income Tax Act, 1961, and the associated rules. The new criminal laws like the Bharatiya Nyaya Sanhita (BNS) are not directly applicable unless there are allegations of criminal activity like fraud or forgery.

• Section 148 of the Income Tax Act, 1961: This section empowers the Income Tax Department to issue a notice for reassessment if an Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment.
• Section 147 of the Income Tax Act, 1961: This deals with the assessment or reassessment of income that has escaped assessment. The time limits for reopening such cases are specified under Section 149.
• Section 139 of the Income Tax Act, 1961: This section mandates the filing of income tax returns.
• Public Records: ITRs are considered public records held by the department, but accessing very old physical records can be a significant challenge.

If you are the complainant

In a scenario where you require someone else’s ITRs for a legal proceeding (e.g., a maintenance case, property dispute), you cannot directly obtain them from the Income Tax Department due to privacy rules. The correct procedure is through the court.

• File an application in the court where your case is pending, requesting the court to direct the other party to produce their ITRs.
• If the other party fails to produce them, you can request the court to issue a summons to the relevant Income Tax Officer to produce the documents.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.

If you are the victim

If you are the one who has received the notice from the tax authorities and are struggling to find the documents, you are the responding party or ‘victim’ of the circumstance.

• Immediately start gathering any secondary evidence you can find. This includes old bank statements, property sale deeds, investment certificates, or any document that can help reconstruct your financial situation for the required period.
• Draft a detailed, honest reply to the notice. Explain the efforts you have made to find the documents and the reasons for their non-availability (e.g., passage of time, relocation).
• Submit all the secondary evidence you have gathered along with your reply. The goal is to cooperate and provide as much information as possible.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.

How the police behave in such cases

Typically, the police have no role in matters related to income tax notices and assessments. This is a civil matter handled exclusively by the Income Tax Department. Police involvement would only occur if the Income Tax Department, after its investigation, finds evidence of a serious criminal offense such as willful tax evasion, forgery of documents, or money laundering. In such rare cases, the IT department might file a complaint, leading to an investigation by the police’s Economic Offences Wing (EOW) or another specialized agency. For a standard notice asking for old records, you will only be dealing with Income Tax officials.

FAQs people normally have

Can the Income Tax Department really open a case that is so old?
Yes, under specific provisions of the Income Tax Act, such as those concerning income escaping assessment, especially in cases involving assets located outside India or large amounts of concealed income, the department can reopen cases that are several years old.

What happens if I simply cannot find any documents from that period?
If you genuinely cannot find the documents, you must communicate this clearly in your written reply to the Assessing Officer. Your reply should detail your attempts to locate the documents. Providing circumstantial and secondary evidence can help your case. An honest and cooperative stance is always better than ignoring the notice.

Were ITRs not stored digitally in the 1990s?
No. The e-filing of income tax returns was introduced much later. In the 1990s and early 2000s, all returns were filed physically at designated tax offices, and record-keeping was entirely manual.

What evidence is required?

To respond to the tax notice effectively, you should try to gather the following:

• A copy of the notice received from the Income Tax Department.
• Any ITR acknowledgement slips from the relevant years, as these were issued as proof of filing.
• Bank passbooks or statements for the period in question.
• Documents related to the purchase or sale of property, shares, or other investments.
• Rent receipts or agreements if you are claiming deductions.
• Any correspondence with the Income Tax Department from that period.

How long will the investigation take?

The timeline for such proceedings can vary. After you submit your reply, the Assessing Officer will review it. They may accept your explanation or ask for more information, which could involve one or more hearings. The entire process of reassessment, from the issuance of the notice to the passing of the final assessment order, can take anywhere from a few months to over a year, depending on the complexity of the case and the workload of the department.

Advocate Sudhir Rao, Supreme Court of India