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Demand Notice under section 156 of Income Tax Act, 1961

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Laxmi Navlani

Income Tax
IT Notice
Notice u/s 156
Last updated on July 24th, 2021

What is the Outstanding Tax Demand Notice Taxpayers receive u/s 156?

The assessee may receive a outstanding tax demand notice under section 156 of Income Tax Act. This notice specifies the amount payable if the assessing officer raises any demand for tax, interest, penalty, fine, or any other sum as per the provision of Income Tax Act, 1961. Notice for sum payable u/s 143(1), 200A (1), 206CB (1), etc., shall be deemed to be Demand Notice u/s 156. Assessee has to pay the amount specified in the notice within 30 days of receipt of the notice. The only prerequisite to submit a response to such a notice is to be registered as a taxpayer on the e-Filing portal. A Registered user can submit a response from the portal itself.

Response to Outstanding Tax Demand Notice under section 156 of Income Tax Act

For submitting the response there are three options available with a taxpayer as below:

How to Respond to Outstanding Tax Demand Notice?

  1. Login to Income Tax Portal

    Login to the e-Filing portal using your user ID and password.www.incometax.gov.in - Login

  2. Response to Outstanding Demand

    Click Pending Actions > Response to Outstanding Demand to view a list of your outstanding demands from the dashboard.www.incometax.gov.in - Respond to Outstanding Tax Demand Notice Option from Dashboard

  3. Pay Now

    www.incometax.gov.in - Pay Outstanding Tax Amount

  4. Submit Response

    On the Response to Outstanding Amount page, click Submit Response to submit a response to an outstanding demand. www.incometax.gov.in - Submit Response

  5. Option 1 – Submit response if Demand is correct and you have not paid already

    On the Response to Outstanding Amount page, select the Demand is Correct option and the disclaimer Once you submit the response as Demand is correct, then you cannot Disagree with Demand later on. Moreover, On the same page, select Not paid yet option and click Pay Nowwww.incometax.gov.in - Responding to Outstanding Tax Demand Notice using Option 1

  6. Successful Payment

    On successful payment, a success message is displayed along with a Transaction ID.

  7. Option 2 – Submit response if Demand is correct and you have paid already

    On Response to Outstanding Amount page, select the Demand is Correct option and the disclaimer Once you submit the response as Demand is correct, the you cannot Disagree with Demand later on.www.incometax.gov.in - Responding to Outstanding Tax Demand Notice using Option 2

  8. Enter Required Details

    Select Yes, Already paid and Challan has CIN. Click Add Challan Details.www.incometax.gov.in - Add Challan Details

  9. Add Challan Details

    To add the challan details, select Type of Payment (minor head), enter Challan Amount, BSR Code, Serial Number and select Date of Payment. Click Attachment to upload the copy of the challan (PDF) and click Save.www.incometax.gov.in - Enter Challan Details

  10. Submit the Response

    After entering the Challan details, click Submit to submit the response and the details of challan entered. On successful validation, a success message is displayed along with a Transaction ID. Please keep a note of the Transaction ID for future reference.www.incometax.gov.in - Response to Outstanding Tax Demand Recorded

  11. Option 3 – Submit response if you Disagree with the demand (Either in full or in Part)

    On Response to Outstanding Amount page, select Disagree with the demand (Either in full or in Part) option. Click Add Reasons. www.incometax.gov.in - Responding to Outstanding Tax Demand Notice using Option 3

  12. Select Reason for Disagreement

    To select the reason(s) for your disagreement, select from the options and click Apply. (You can select one or more options)www.incometax.gov.in - Add Reason for Disagreement of Outstanding Tax Demand

  13. Enter Details

    After selecting the appropriate reasons for your disagreement, select each reason you listed on the Response to Outstanding Amount page and enter the appropriate details for each reason.www.incometax.gov.in - Response from Assessee

  14. Pay if you Partially Disagree

    After submission of details for all the reasons listed, click Pay Now to pay the remaining outstanding amount available in the payment summary (if you partially disagree). After payment, you will be taken to the Response to Outstanding Amount page, click Submit to submit your response.

  15. Confirm Submission

    Click Confirm to confirm your submission. On successful submission, a success message is displayed along with a Transaction ID. Please keep a note of the Transaction ID for future reference.

Time limit to respond

As per Section 220, amount shall be paid within a period of 30 days from the date of service of notice. However, in some cases, time period of 30 days may be reduced by the assessing officer with prior approval of joint commissioner.

An assessee can also make an application to the AO to extend the time for payment or allow payment by installment, provided application should be made before expiry of thirty days.

Check Responded Submitted Response of Outstanding Tax Demand

www.incometax.gov.in - Enter PAN of the Client
www.incometax.gov.in - View Response Submitted by Assessee

Consequences of delay

FAQs

What will happen if I disagree with a tax demand notice?

If the assessee disagrees with the tax demand notice then he can challenge the same to the next higher authority.

Where can I find my demand notice online?

You can log in to the Income Tax Site and then select the option “Respond to Outstanding Tax Demand” in the e-File tab, and you can check the tax demand notice.

What is the meaning of assessee in default?

If the assessee does not pay the amount specified in the demand notice within 30 days of service of notice then the assessee becomes assessee in default.

Why do I need to submit response to an outstanding demand?

The Income Tax Department may find some Outstanding Tax demand against your PAN. In order to confirm if the stated demand is correct, an opportunity is given to you to respond. If you do not respond to it, the demand will be confirmed and will be adjusted against your refund (if any) or show as demand payable against your PAN ( in case, no refund is due).

What if I do not have the copy of the challan to be attached? Where can I find it?

You can reprint / regenerate your challan from your respective bank account using Net Banking or visiting the bank branch.

Got Questions? Ask Away!

  1. Hi @emmy

    You can follow the steps given to submit a response to the IT Department

    • Firstly, login to the income tax efiling portal using your ID and password
    • Click on e-File > Response to Outstanding Demand
    • Click on the Option to “Submit” if you wish to respond to this notice.
    • Clicking on submit would take you to a different screen where you will be asked to choose from one of the 4 options as shown below.
    1. Demand is correct
    2. Demand is partially correct
    3. Disagree with Demand
    4. Demand is not correct but agree for adjustment
    • Select the applicable option and submit

    Hope this helps!