Income tax notices: Taxpayers may receive several types of income tax notices, but not all of them apply to individuals.
Income tax notices: If any mistake is found in the filed Income Tax Return (ITR), the Income Tax Department sends notices to the taxpayers. Based on the mistake and your action regarding the notice, the tax department initiates proceedings against you. Therefore, it is important to understand the circumstances under which you can be sent an income tax notice and it is equally important to understand the reason behind sending the notice. This will help you respond to such a notice when you receive it.
Although taxpayers may receive several types of income tax notices, not all of them apply to individuals. Here are some of the tax notices that a salaried individual can get if errors are found in their ITR:
1. Section 143(1)(a) tax notice
This tax notice is called an Intimation Notice (Intimation Under Section 143(1) of Income Tax Act) and is sent when the tax department has successfully processed the ITR filed by the taxpayer. This intimation notice will indicate whether the calculations submitted in the ITR have been accepted by the Income Tax Department or not. If there is any difference between the calculations filed by you in the return and the calculations done by the tax department, the reason for the same will also be mentioned in the intimation notice.
Possible reasons for receiving a 143(1) mismatch intimation notice: Such intimations can be issued in case of ITRs filed under section 139(1)/139(5) as well as ITRs filed in response to notices issued under section 142(1). A taxpayer may receive a mismatch intimation notice due to differences between the ITR filed by the taxpayer and the income calculated as per section 143(1), arithmetical errors, any incorrect claims, incorrect calculation of interest under section 234A/B/C, mismatch of tax return details when compared with Form 26AS, etc.
Time limit to respond to such notices: You need to take action only if there is a difference between your ITR calculation and the tax department’s calculation. If the intimation notice is issued for a refund or there is no mismatch between your ITR calculation and that of the tax department, you need not respond to the intimation. Taxpayers receiving an intimation under section 143(1)(a) are required to file their response within 30 days from the date of issue of the intimation.
2. Defective Notice Under Section 139(9)
The Income Tax Department may issue a notice under Section 139(9) to you for incomplete or incorrect information provided in the ITR you have filed. An ITR can be considered defective for several reasons. For example, using the wrong ITR form to file the ITR.
Some of the common reasons for getting a Defective Return Notice include: Claiming HRA in the ITR but having no HRA component in the salary breakup, claiming TDS on income while filing the ITR but not reporting the relevant income, for example, not declaring FD interest in the ITR but claiming the TDS deducted on such FD.
When can a Defective ITR Notice be issued?
This notice can be issued within nine months from the end of the financial year in which the ITR is filed. For ITRs filed for financial year 2023-24, the defective ITR notice can be issued on or before December 31, 2025.
Time limit to respond to defective ITR notice: “If your return is found to be defective, you will have 15 days from the date of receipt of the notice or the time limit mentioned in the notice to rectify the defect in your filed return. However, you can request for an extension of the same.
3. Notice under Section 142(1) of Income Tax Act
This tax notice is also known as an inquiry before assessment or reassessment notice. If no ITR has been filed under section 139(1), a notice to file ITR under section 142(1) can be issued to the person.
Possible reasons behind this notice: The reason behind issuing this notice is that the tax department wants clarification on why you did not file ITR despite having proof of income above the basic exemption limit. You have to answer all the questions asked by the income tax department and provide necessary details and documents to support the claims made in your submitted ITR. There is no time limit for issuing such a notice.
Time limit to respond to notice: Taxpayers have to respond to the notice within the time limit given in the notice which is generally 15 days.
4. Section 143 (2): This notice is known as scrutiny assessment notice. This notice is sent when the tax department wants to make a detailed assessment of the ITR submitted and wants to verify the genuineness of all the claims (income and deductions) made by you.
Possible reasons behind this notice: A notice under section 143(2) can be issued to the taxpayer for the purpose of conducting a scrutiny assessment under section 143(3). Scrutiny assessment is a detailed assessment which is done to verify the genuineness of various claims, deductions, etc. made by the taxpayer in the ITR submitted by him.
Time limit to respond: Usually 15 days are given to respond to such a notice, however, the time limit to respond to such a notice is mentioned in the notice itself. On receiving this notice, you have to submit your response by uploading the required documents.
5. Section 148
Section 148: This notice is sent when there is income that has escaped assessment. This notice is issued when the assessing officer (AO) has any evidence to show that the taxpayer’s income has escaped assessment in the previous year. The tax department issues a notice under section 148 before issuing a show-cause notice under 148A (b) to ask why the case should not be selected for reassessment.
After receiving a response from the taxpayer or if there is no response from the taxpayer, the income tax department passes its order under section 148A (d), stating whether it is a fit case for reassessment or not.
When can such a notice be issued: Notice under section 148 can be issued within 3 years and 3 months from the end of the relevant assessment year, if the income escaped assessment does not exceed Rs 50 lakh. However, if the income escaped assessment is more than Rs 50 lakh, reassessment can be done for 5 years and 3 months for the relevant assessment year.
Time limit to respond: The taxpayer has to respond to the notice within the time limit given in the notice which is generally 30 days.
6. Section 245: Under this section, the income tax department can set off income tax refund from the current year against any tax dues from a previous year. This adjustment is only done if there is income tax dues or tax refund due in the current year.
Possible reason behind this notice: If you have any tax dues from a previous year that you have not settled or paid, you may be sent this notice.
When can this notice be issued: There is no time limit for sending this notice.
Time limit to respond: The intimation notice has a time limit, which is usually 30 days. If you have any objection to this notice, or you have already paid the tax amount due, then provide proof of tax payment in your response.
Apart from this, some other notices that taxpayers can get include…
Section 154: If any mistake is found in the claims made in the return after the acceptance of ITR by the Income Tax Authority, then the Income Tax Authority can issue a notice under Section 154 to rectify these mistakes.
Section 263: If the Commissioner of Income-tax (CIT) finds that any order passed by his subordinate officer is erroneous, and is detrimental to the interest of the government, then within 12 months from the end of the year in which the erroneous order was passed, the CIT can issue a notice under Section 263 to modify the order passed by his subordinate officer.
Section 131 (1A): If the Principal Director General, Director General, Principal Director, Director, Assistant Director, Deputy Director etc. have any reason to suspect that income has been concealed, then a notice is issued under section 131 (1A). The taxpayer has to file his reply within the time limit given in the notice, which is usually 30 days.
