It is very common to receive a notice from the Income Tax Department. These notices create a sense of panic amongst assessees. But to say the least, a lot of such notices are sent in the normal course of processing tax returns. It might be for routine inquiry or a request for clarification. So there is absolutely no need to panic in the first place.
Steps to deal with Income Tax Notice
- Don’t ignore the notice
A lot of these notices can be attended by sincere communication. If you ignore it, you might end up paying penalty along with your income tax payments.
- Check the notice for your basic details
Check PAN name, assessment year, assessing officer and income tax ward details. Make sure that the notice is intended for you only.
- Preserve the notice
Whether received physically or via email preserve it. Because the notice contains the date of order and/or communication for further communication with the IT Department.
- Identify the reason for the notice
In most of the cases, you would be able to identify the reason just by casually reading it. These reasons could be a mismatch in TDS or defect in return etc.
- Check the validity of the notice
There are certain time limits prescribed by the IT department, subject to which any notice can be issued by the department. Check a section mentioned in the notice in pursuance of which the notice has been issued. For example, a notice under section 143(3) for scrutiny assessment has to be served within six months of the end of the financial year in which the return was filed. So, if the notice is served later than this period, it will be considered invalid.
- Provide Supporting
The department would ask you to provide the supporting to support your defense. So the best way to respond to notice is with the help of supporting documents.
- In time response
Even if you are unable to gather all the supporting documents, you should write the same to the office.
- Take professional help
In case of serious matters involving scrutiny assessment, income concealment, etc take professional help from a Chartered Accountant.
Common reasons for Notice and their resolution
| Section | Reason for Notice | Probable resolution |
|---|---|---|
| 139(9) |
For filing a defective return |
Identify the defect mentioned in “Annexure A” and submit a return in response to the notice of defective return u/s 139(9). |
| 142 |
For not filing the income tax return or for the scrutiny of a documents & accounts in support of the return filed. |
File the return within the time limit mentioned in the notice. |
| Submit a proper response if you are not required to file a return. | ||
|
Present before assessing officer with books of accounts and supporting documents if demanded by Assessing Officer. |
||
| 143(1) |
For adjustment or additional tax demand if an error or incorrect information is detected in the return. |
Pay outstanding tax dues if any. |
|
Correct the errors and file rectification return u/s 154 if required. |
||
| 143(2) |
For scrutiny assessment after a detailed inquiry by assessing officer. |
Your case has been selected for scrutiny and you should provide all the relevant information, pieces of evidence as demanded by IT authorities. |
| 148 |
For reassessment, if the officer believes some income has escaped assessment. |
Provide all the relevant information, evidence as demanded by IT authorities. |
| 156 |
For dues (tax, interest, penalty, fine or any other sum) payable by the assessee)
|
Submit a response to a notice from e-filing account. |
|
Pay tax if you agree. |
||
|
Provide a reason if you don’t agree with the demand. |
||
| 245 |
For adjustment of a refund with any demand due |
Your refund has already been adjusted against outstanding tax demand so no further action required. |
FAQs
Assessing Officer is of the opinion that tax payer are concealing the income or likely to conceal income then tax payer will receive notice u/s 131(1A). This notice is basically intimation that AO is initiating an enquiry or investigate into the matter. The AO should expect the attendance of tax payer and books of accounts, statement of all bank accounts, details of all properties acquired during the financial year.
This is a detailed assessment and is referred to as scrutiny assessment. The scrutiny is carried out to confirm the correctness and genuineness of various claims, deductions, etc., made by the taxpayer in the return.
Login to your account on the e-filing website by entering your credentials: User ID (PAN), password, and captcha code.
Click on the ‘e-file’ tab and select ‘Response to outstanding Tax Demand’ option.
Hey @TeamQuicko
What is the time limit in which I need to respond to the notice under section 139(9)?
How can I respond to the notice received online?
How much time it will take to process the refund once response to notice u/s 139(9) is filed?
Hey @HarshitShah
It is very common to receive a notice from the Income Tax Department. The notice sent to you might be a routine inquiry or a request for clarification. There is no need to worry when you get a notice from the Income Tax Department. You will have 15 days time in which you will need to respond to the notice/file revised ITR.
Hope this helps!
Hey @SonalYadav
You can login to your account on the Income Tax e-filing website by entering your credentials i.e. User ID (PAN), password, and captcha code.
Next, you need to click on the ‘e-file’ tab and select ‘Response to outstanding Tax Demand’ option.
Hope this helps!
Hey @ViraajAhuja47
In case of any defects in the Income Tax Return, Assessing Office can issue notice u/s 139(9). If you have filed a return within 15 days of issue of notice, then it will generally take 60 days to process the return once it is sent for processing.
Hope this helps!
Hey @HarishMehta
It is mentioned in the notice that in case one does not respond in the stipulated time, the return will be processed by restricting the credit for the TDS proportionately.
To give an example: There are 2 incomes mentioned in Form 26AS as below:
Salary from A - 100000 & TDS deducted - 10000
Salary from B - 200000 & TDS deducted - 20000
In case you have not reported either of the above income in ITR then you may receive a notice for the mismatch.
Thus, in the above example if you don’t respond in the time, then ITD will add the income of both of the above but will not give the credit of TDS not mentioned in ITR and process the return.
Hence, it is always advisable to respond to the Income Tax Notice in the given time period.
Hope this helps!
Hi @Shweta_Saini ,
Notice u/s 144(1) is issued in the following cases:
-When ITR is not filed within due date by a taxpayer
-When a taxpayer fails to provide a response to an inquiry of AO (Assessing Officer) for filed ITR,
-When a taxpayer fails to provide a response to assessment notice for filing ITR.
Here, AO can assess the total income or loss of a taxpayer based on the information gathered by them. AO usually gives the taxpayer an opportunity to present their case and provide necessary documents. Hence response to 144(1) can be given after looking at the cause of the notice and with supporting documents.
Attention XXXXX4061X, Your PAN has been flagged for not filing of ITR for A.Y-2020-21. Please file your ITR or submit online response under e-Campaign tab on Compliance Portal (CP). Access CP by logging into e-filing portal (My Account) - ITD
Please help i want to avoid any problems
Hey @SreeSSXP
Since you had high value transactions and ITR has not been filed for AY 2020-21, ITD has flagged your PAN. Thus, you have to file ITR before March 31, 2021 and respond to the transactions on IT Portal.
You can reach out to us on help@quicko.com or alternatively get in touch with us at +91-7575831310 so someone from our team can get in touch with you for process, pricing and discounts?