I have received a notice from IT Dept. In the subject it says, 'Non filing of Income Tax Return'. And it lists transaction in year 2009 'Transfer of immovable property'. I have been unemployed since 2006 and hence have not filed my IT return since then. In 2009, I sold some of the Shares which I had bought in 2004 and purchased a property worth Rs. 7 Lacs. and registered the same as per the rules, paying the stamp duty. I am wondering why the notice is sent to me and what I should do. Any advice is appreciated.
Notice is sent because IT Department wanted to know the source of your income and how you have purchased the property. Since you have sold your shares there must be LTCG on shares, which are exempt but give details in your Income Tax return. It will solve your case.
Since you have stopped filling of income tax return, the department has a right to know your current status. More over they are armed with the information of your purchase of immovable property without having any declared source of income, give rise to their suspicion which you need to clarify. Now only course of action available with you is to file a reply to the notice. Since it is not a notice asking you to file a return, a reply should suffice. Your reply should be exhaustive, elaborate giving full particulars of your income for the year, whether or not taxable and declaring complete source of investment. Once satisfied, the AO may close the inquiry and you may need not to file the return. If not satisfied with the explanation, he may ask you to file the return by issuing a notice.