Reply to I Tax Notices
The Indian IT Department sends notices to people, if they find any kind of fault or discrepancy in Income Tax filing. Filecrat provides tax expert assistance to help you understand and respond to income tax notice.
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Reply to Income Tax Notices
Notices/ Intimations/ Summons are often sent by the Income Tax Department. Some common notices/ intimations sent are: -
- Intimation under section 143(1)
- Notice under section 142(1)
- Notice under section 143(2)
- Notice under section 144
- Notice under section 148
- Notice under section 153A
- Intimation under section 245
- Notice for initiation of Penalty proceedings
- Notice of summon under section 131
- Requisition under section 133(6)
- Other requisitions under section 133
- Notice under section 133C
Issues with Intimation under 143(1)
Intimations under section is usually received by an assessee within a few months of filing return. It compares the data filed by the assessee with the data processed by the Income Tax Department. The common mismatches that occur in this intimation are: -
- Mismatch of TDS/ TCS
- Mismatch in Deductions
- Mismatch in brought forward losses
- Mismatch in depreciation
- Minimum Alternate Tax (for Companies)
If there are mismatches in the intimation, a rectification may be filed depending on the nature or error. If the mismatch is accepted, any amount demanded should be paid within 30 days from the date of receipt of intimation.
Notice under section 142(1)
Notice under 142(1) can be sent by the Assessing Officer in the following 2 cases: -
- Where return has not been filed, the Assessing Officer may direct the assessee to file a return
- Where return has been filed, the Assessing Officer may call for information/ explanation/ copies of books of accounts etc.
On receipt of such a notice, the assessee needs to comply with the instructions given in the notice.
Notice under section 143(2)
A notice under section 143(2) may be received within 6 months from the end of the financial year in which return in furnished. This notice is sent to those who are selected for scrutiny. Usually the selection takes place randomly on the basis of certain parameters. Scrutiny is done to ascertain whether the assessee has correctly shown his income in the return. Usually a scrutiny notice is followed by notice under section 142(1) wherein various information and documents are asked for.
Notice under section 144
This notice is given to conduct best judgement assessment. This is done when the assessee has not filed return or has not complied with notices under section 142(1) and 143(2) or not complied with direction for special audit.
Notice under section 148
The Assessing Officer may serve this notice if he has reasons to believe that any income of the assessee has escaped assessment. For example, if the Assessing Officer finds out that an assessee is earning income from a certain business which is not disclosed in his return of income, the Assessing Officer will issue a notice under section 148 to the assessee. On receipt of the notice, the assessee is required to file a fresh return of income for the financial year pertaining to such notice.
Notice under section 153A
This notice is issued after a search has taken place in the premises of the assessee. This is a very stringent notice which opens assessment for several preceding years ranging from 6 years to 10 years depending on the circumstances of the case. The assessee is required to file returns for all the assessment years as mentioned in such notice.
Intimation under section 245
This is an intimation sent by the Income Tax Department to inform the assessee that certain adjustments have taken place in respect of the demand/ refund relating to an assessment year. Where the assessee does not agree with the adjustment, he must disclose the same in the income tax portal.
Notice for initiation of penalty proceedings
This is issued when after assessment is completed and penalty is levied due to concealment/ misreporting/ under-reporting of income or due to any other reason.
Notice of summon under section 131
Notice of summon under section 131 is sent to enforce attendance of any person and examine him on oath. It may also be used to compel production of books of account and documents.
Requisition under section 133(6)
The Assessing Officer or the CIT(Appeals) sends this notice when it requires any person to furnish information or furnish statement of accounts giving information which will be useful for any inquiry or proceedings under the Act. Usually this notice is sent to debtors/ creditors/ lenders of the assessee under scrutiny/ investigation.
Notice under section 133C
This notice is sent by the Income Tax Department for the purpose of verification of information in its possession relating to any person. The notice is sent to such person requiring him to furnish information/ documents relevant for any inquiry or proceeding under the Income Tax Act.
- Analysis of Income Tax Notices
- Preparation of Responses
- Consultation with our Income Tax Experts
- PAN Card
- Copy of Notice/ Intimation/ Requisition
- Copy of Profit & Loss A/c, Balance Sheet, Trial Balance (if any)
- Details relating to facts of the case
Various types of notices under Income tax Act are: -
- Notice for scrutiny
- Notice requiring the assessee to file return
- Notice in the case of search and seizure
- Notice for initiating penalty proceedings
- Notice requiring the assessee to produce documents/ information/ explanation
- Notice for assessment where Assessing Officer has reason to believe that income has escaped assessment
First check the subject to understand if it is a notice or an intimation. Next check whether your name and PAN has been given correctly. Then check the signature and designation of the officer at the end of the document to understand who the sender is. The notice will contain instructions relating to what the next course of action should be.
All notices do not need a reply. Some notices just require the assessee to file a return or to upload certain documents online. The due date is usually written in the notice itself.
You should never ignore any notice sent by the Income Tax Department. Ignoring a notice may have serious consequences including imposition of hefty fines. Usually the notice would contain appropriate instructions relating to what should be done. Contact Filecrat to handle your notices with great expertise.
The soft copy of each notice issued by the Income Tax Department is uploaded in the Income Tax Portal. You can always login to your portal and download the copy of notice from “e-Proceedings” option. It is always advisable to regularly login to your account in the Income Tax Portal to check if any notice has been issued.
A notice of scrutiny under section 143(2) is issued when an account is taken up for scrutiny. A scrutiny notice must be sent by the Income Tax Department within 6 months from the end of the financial year in which return in filed.
Usually a file is taken up for scrutiny randomly based on certain parameters. Hence any assessee may be taken up for scrutiny.
An Intimation is merely an information given by the Income Tax Department to the assessee. The assessee should respond to an intimation only if he disagrees with the same.
A Notice on the other hand always requires response from the assessee. It contains a set of instructions such as filing of return or production of documents or appearing before the income tax authority.
As per section 144, the Assessing Officer is under an obligation to make an assessment to the best of his judgment in the following cases:
- If the taxpayer fails to comply with all the terms of a notice issued under section 142(1).
- If the taxpayer fails to file the return of income as required within the due date prescribed under section 139(1) or a belated return under section 139(4) or a revised return under section 139(5).