Income Tax Notice
The notices are sent by the Income Tax Department for a number of reasons, including failure to file income tax returns, errors made in filing returns, and other situations where the tax department needs more information or documents.
The notice that is received is neither frightful nor concerning. However, the taxpayer must first comprehend the notice, its purpose, and the requestor's instructions before acting to comply.
IndiaFilings provides families and businesses with a full range of services to assist them in keeping up with compliances. If you receive an income tax notice, get in touch with an IndiaFilings tax expert to better understand it and decide what to do.
Let's examine the numerous notices or notifications that the Income Tax Department issues.
Types of Income Tax Notice
|
Type of Notice |
Description |
|
Notice u/s 143(1) - Intimation |
This is one of the most commonly received income tax notices. The income tax department sends this notice seeking a response to the errors/ incorrect claims/ inconsistencies in an income tax return that was filed.If an individual wants to revise the return after receiving this notice, it must be done within 15 days.Else, the tax return will be processed after making the necessary adjustments mentioned in the 143(1) tax notice. |
|
Notice u/s 142(1) - Inquiry |
This notice is addressed to the assessee when the return is already filed and further details and documents are required from the assessee to complete the process.This notice can also be sent to necessitate a taxpayer to provide additional documents and information. |
|
Notice u/s 139(1) - Defective Return |
An income tax notice under Section 139(1) would be issued if the income tax return filed does not contain all necessary information or incorrect information. If tax notice under Section 139(1) is issued, you should rectify the defect in the return within 15 days. |
|
Notice u/s 143(2) - Scrutiny |
An income tax notice under Section 143(2) is issued if the tax officer was not satisfied with the documents and information that was submitted by the taxpayer.Taxpayers who receive notice under Section 142(2) have been selected for detailed scrutiny by the Income Tax department and will have to submit additional information. |
|
Notice u/s 156 - Demand Notice |
This type of income tax notice is issued by the Income Tax Department when any tax, interest, fine, or any other sum is owed by the taxpayer.All demand tax notice will stipulate the sum which is outstanding and due from the taxpayer. |
|
Notice Under Section 245 |
If the officer has reason to believe that tax has not been paid for the previous years and he wants to set off the current year's refund against that demand, a notice u/s 245 can be issued.However, the adjustment of demand and refund could be done only if the individual has been provided proper notice and an opportunity to be heard. The recipient has to respond to the notice is 30 days from the day of receipt of the notice.If the individual does not respond within the specified timeline, the assessing officer can consider this as consent and proceed with the assessment.Therefore, it is advisable to respond to the notice at the earliest. |
|
Notice Under Section 148 |
The officer may have a reason to believe that you have not disclosed your income correctly and therefore, you have paid lower taxes.Or the individual may not have filed his return at all, even if you must have filed it as per law. This is termed as income escaping assessment. Under these circumstances, the assessing officer is entitled to assess or reassess the income, according to the case.Before making such an assessment or reassessment, the assessing officer should serve a notice to the assessee asking him to furnish his return of income.The notice issued for this purpose is issued under the provisions of Section 148. |
Service of Income Tax Notice
The Income Tax Act of 1961 established the rules for the delivery or transmission of a copy to the recipient of a notice, summons, order, or other communication in any manner permitted by the Act. Here are the many methods for serving the Income Tax Notice.
Recipient of the Notice: Income tax notices are sent to the individual directly, but to the guardian if they are intended for a minor. The name listed on the face of the return may become important in situations when the status of the assessee is entwined with the identity of the assessee, even though inaccurate descriptions of the assessee are typically correctable.
Service by Post: A registered mail service can be used to process the income tax notice's service. According to Section 27 of the General Clauses Act of 1897, the service must be started by correctly addressing, prepaying for, and mailing a letter containing the document through registered mail. The address, a representative, an employee, or any other authorized person may receive this delivery.
Service by Affixture: In case a defendant refuses to sign the acknowledgment or where the officer is not able to find the defendant, then the office has to affix a copy of the summons or notice or requisition order on the outer door or any other noticeable part of the residence where the defendant is residing or pursuing the business activities.
HUFs and the Partnership Firm: If an officer learns of the whole split of any HUF, the assessing officer may record the information and serve notices to the HUF's manager. Notices regarding the income of the firm or the association may be served on any staff who were former partners or the members of the association that are subject to taxation if the relevant person is deceased. If the relevant person is deceased, then the notice will be served to all adults who were firm or other Association of Persons.
Closed Business:The assessing officer must give notification to the person whose income is subject to assessment when a business is closed. Any members who have been a part of the firm throughout discontinuance will receive notice in the case of the firm or an association of persons. The notice will be delivered to the director or the chief executive officer of a corporation.
Documents required to reply to an Income Tax Notice
What documents are required to reply to an Income Tax Notice?
The Documents are required to vary with the type of Income Tax notice that is served to the taxpayer. The basic documents needed to reply to an income tax notice would be:
- The Income Tax Notice copy.
- Proof of Income source such as (Part B ) of Form 16, Salary receipts, etc.
- TDS certificates, Form 16 (Part A)
- Investment Proof if they are applicable.
But it is always better to review the notice from the Tax experts only. Therefore, once the Income-tax notice copy is uploaded, the tax experts will review the same and come up with the best probable solution. Based on this you can ask for the necessary documents. You can send a copy of the Income Tax Notice and questions to sales@indiafilings.com.
Checklist for Income Tax Notice
step:1 After the intimation notice under Section 143 (1) is received of the Income Tax Act,1961 the taxpayer has to make a reply within 30 days from the date when the notice is served.
step:2 If the taxpayer fails to respond within the time that is prescribed then the Income Tax Returns will be processed with the necessary adjustments without providing any opportunity to taxpayers.
step:3 Once the notice is received then the taxpayer should cross-check the name, address, and PAN number, mentioned in the notice.
step:4 Similarly, it is necessary to cross-check the assessment year that is mentioned and verify the e filing acknowledgment number.
step:5 Revised returns can be filed only when the taxpayer has made mistake in the original ITR filing. When the taxpayer has opted to revise the return it has to be filed within 15 days.
step:6 The rectification return can be filed only when the taxpayer has found any fault or error in the order that is sent by the Income Tax Department.
step:7 On-Page 2 of the notice that is issued you can understand the reason for which the notice has been issued. It also shows the difference of the mentioned income in the returns that file and Form 16/16A/ 26AS.
step:8 If the intimation notice demands the taxpayers to pay an additional tax amount i.e demand notice then it has to be treated as the notice of demand u/s 156.
step:9 On receiving this notice of the demand the taxpayer has to respond within 30 days to avoid the !% of the interest per month from the 30 days expiry period and a penalty is also imposed by the assessing officer.
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