Resolving Tax Notices for NRIs - Income Tax & FEMA Cases

#1High Value Transaction - AIS Mismatch

High Value Transaction Notice - NRI Mutual Fund Redemptions

NRI received notice for multiple mutual fund redemptions above ₹10L flagged under Annual Information Statement. Established residential status, TDS credit, and DTAA exemption claim.

Outcome:No tax demand. Refund of excess TDS obtained.
NRImutual fundAISTDS refundDTAAresidential statushigh value transaction
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#2Reassessment - Section 147 read with Section 144 / Appeal - Section 250 / Unexplained Money - Section 69A

NRI Non-Filer, Hyderabad - Section 69A Cash Deposit Addition - ₹29.5L Deleted at CIT(A)

A Non-Resident Indian was reassessed for AY 2020-21 after CBDT's Insight Portal flagged significant cash deposits and a property purchase with no ITR on record. The Assessing Officer rejected the explanation that the cash deposits were family gifts and treated ₹29.5L as unexplained money under Section 69A. We were engaged to appeal the assessment order before CIT(Appeals)-10, Hyderabad.

Outcome:CIT(A) allowed the appeal in full. Addition of ₹29.5L under Section 69A deleted. Section 271AAC penalty proceedings consequently fall away.
Section 148Section 147Section 69ASection 115BBESection 271AACSection 250CIT appealNRInon-filercash depositsfamily giftunexplained moneyAY 2020-21Hyderabadproperty purchasebanking trail
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#3Reassessment – Section 147

NRI Reassessment Notice: ₹29.50 Lakh Section 69A Addition Deleted

An NRI received a Section 147 reassessment notice (issued when the Income Tax Department believes income may have escaped assessment) in which ₹29.50 lakh was added under Section 69A (applies when money or valuable assets are treated as unexplained). The matter was challenged in appeal.

Outcome:Addition of ₹29.50 lakh under Section 69A deleted. Revised assessed income became NIL.
NRI Tax NoticeSection 147Section 69ASection 144Section 250Reassessment ProceedingsCIT(A) AppealUnexplained MoneyIncome Tax NoticeNRI TaxationAY 2020-21
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#4Reassessment – Section 148

NRI Section 148 Notice for Property Sale Closed Without Any Tax Addition

An NRI received a Section 148 reassessment notice (issued when the Income Tax Department believes income may have escaped assessment) after the department identified a property sale of ₹79.05 lakh. The reassessment concluded without any addition after the available information and supporting documents were examined.

Outcome:Reassessment completed with NIL addition and NIL assessed income.
Section 148Section 148ASection 147Section 144NRI Tax NoticeProperty SaleIncome Tax ReassessmentNon-Filer NoticeProperty TransactionFaceless AssessmentAY 2018-19
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#5Reassessment - Section 148

Section 148 Reassessment - NRI Property Sale, Hyderabad

NRI based in USA received a Section 148 notice for an apartment sold in 2019 where capital gains were reportedly not declared. We computed indexed capital gains, filed revised ITR, and responded to notice.

Outcome:Reassessment dropped. Tax liability reduced by 60% through indexation.
Section 148NRIproperty salecapital gainsindexationreassessmentUSA
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Resolving Tax Notices for NRIs - Income Tax & FEMA Cases

Non-Resident Indians receive tax notices for property sales, undeclared foreign remittances, and bank account compliance gaps - often without warning. SMACAS represents NRIs across the USA, UK, Gulf, and Australia through Power of Attorney, handling all proceedings in India without requiring the client to travel.

Frequently Asked Questions

What happens if an NRI ignores an income tax notice in India?

Ignoring a tax notice leads to an ex-parte assessment - the AO passes an order without hearing the NRI - often resulting in maximum tax demand plus interest and penalty. The department can then attach Indian bank accounts, property, or mutual fund holdings. Responding through an authorised CA representative is critical even if the NRI is abroad.

Can an NRI receive a Section 148 reassessment notice for a property sold in India?

Yes. Property sales are reported by registrars to the Income Tax Department. If the NRI did not file an ITR for the year of sale or if the declared sale value appears below the circle rate, a Section 148 notice can be issued for up to 10 years from the assessment year. Proper capital gains computation and timely ITR filing prevents reassessment.

What is an NRI's obligation under FEMA for funds held in India?

NRIs must convert resident savings accounts to NRO accounts within a reasonable period of acquiring NRI status. Repatriation of funds above USD 1 million per year requires CA certificate in Form 15CA/15CB. Failure to comply can result in FEMA penalty notices from the Enforcement Directorate.

I am an NRI in the USA - can a CA in India represent me for a tax notice?

Yes. SMACAS represents NRIs located abroad through a Power of Attorney. The NRI grants PoA to the firm, and we handle all correspondence, appearance before the AO, and filing of replies on their behalf. Most matters are resolved without the NRI needing to travel to India.

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