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Income Tax Notices 2019-01-08T11:13:57+00:00

Income Tax Notices

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Reasons for getting Income tax notices

  • Non-filing of Income Tax Returns by the taxpayer.
  • Mismatch in tax rates and tax amount.
  • High value transactions done by the person during the year.
  • Investment in the name of spouse and children made with a view to evade tax.
  • In case of Scrutiny assessment.

Types of Income tax notices

a. Defective ITR – In case the Income-tax department finds any error, discrepancy or any missing information in ITR filed by the person, the department issues a notice u/s 139(9). For this purpose, the department compares the details provided in the ITR and those available with the department.
In these cases the assessee is allowed a time of 15 days to correct the defect, else the ITR filed shall be treated as an Invalid return.

b. Non-filing of ITR – In case an assessee has not filed the ITR, the department issues notice u/s 142(1) to require him to furnish the ITR. Further, in the case where the return has been filed, notice u/s 142(1) is issued to call for further details and documents from the assessee and to take a particular case under assessment. This notice is generally issued when information is missing from the taxpayer’s end and an inquiry is sought to be made.

c. Intimation of ITR processing – Notice/Intimation u/s 143(1) is just an intimation to the taxpayer for ITR processed by the income tax department. It communicates arithmetical mistakes or changes to be done. This notice/intimation u/s 143(1) is generated by the computer on the basis of any mathematical error or any incorrect tax claim.

d. Scrutiny Assessment notice – In case Assessing Officer is of the view that the assessee has understated the income, computed excessive loss or had underpaid the tax, the Assessing officer sends notice u/s 143(2) for Scrutiny assessment and to require the assessee to represent before the assessing officer to clear the facts, make written submissions for providing details or produce evidence to substantiate the income/profits/gains/losses.
e. Demand Notice – Section 56 notice is issued by the Income Tax Department when any tax, interest, penalty, fine or any other sum is payable in consequence of any order passed. The section 156 notice of demand specifies the sum which is payable.

How to deal with Income Tax Notices

  • The assessee must CHECK THE REASONS for the notice in case of receipt of any notice from the income tax department

  • The assessee must CHECK THE VALIDITY for the notice. If it is served later than it is considered invalid.

  • Start collecting documents which are asked by the income tax department.

  • All the response should be given on time further some extension for the time can also be asked.

  • Take professional Advice: We at UnfoldingTax are happy to help.