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:
- Demand is correct
- Demand is partially correct
- Disagree with demand
How to Respond to Outstanding Tax Demand Notice?
- Login to Income Tax Portal
Login to the e-Filing portal using your user ID and password.
- Response to Outstanding Demand
Click Pending Actions > Response to Outstanding Demand to view a list of your outstanding demands from the dashboard.
- Pay Now
- Submit Response
On the Response to Outstanding Amount page, click Submit Response to submit a response to an outstanding demand.
- 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 Now.
- Successful Payment
On successful payment, a success message is displayed along with a Transaction ID.
- 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.
- Enter Required Details
Select Yes, Already paid and Challan has CIN. Click Add Challan Details.
- 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.
- 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.
- 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.
- 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)
- 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.
- 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.
- 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
- Login to the e-Filing portal
- Click on Services > Response to Outstanding Demand from the dashboard
- On the Response to Outstanding Demand page, enter the PAN of the assessee and click on the option to search
- From the list of responses submitted by the assessee whose PAN you entered, click View on the particular notice to view the response submitted by the assessee
Consequences of delay
- Interest u/s 220(2) – Interest at a rate of one percent per month or part of the month will be payable after the expiry of 30 days. Such interest shall be payable by the assessee even if the AO has approved the application for an extension of the time period.
- Penalty u/s 221 – AO can impose a penalty up to the amount of demand in the demand notice. Provided, a reasonable opportunity of being heard is given to the assessee. If the assessee proves that the default was for good and sufficient reasons, no penalty shall be levied.
If the assessee disagrees with the tax demand notice then he can challenge the same to the next higher authority.
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.
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.
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).
You can reprint / regenerate your challan from your respective bank account using Net Banking or visiting the bank branch.