Income Tax Notice: Know when and to whom the notice of section 143(1) comes, what to do if it comes

Income Tax Notice: Know when and to whom the notice of section 143(1) comes, what to do if it comes

 After you file the income tax return (I-T return), the department sends an intimation notice. If you pay more or less tax, then in both these circumstances the IT department sends an intimation notice.

Intimation notice is in case of short tax payment to the taxpayer to pay the balance amount and settle the issue. If someone sends an amount more than the tax, then in that case the Income Tax Department refunds the remaining amount in the concerned person’s account.

What to do if intimation notice comes

If you have received an intimation notice and you have paid less tax, deposit the balance amount of tax. So that your monthly salary comes in full and there is no deduction in TDS. For example, if according to your income you had to pay income tax of one lakh rupees, but you have deposited 90 thousand, then you can deposit the remaining amount again. On the other hand, if you have filled more than the fixed amount, then the refund will come to your linked bank account.

What is intimation notice under section 143(1)?

People have to file their income tax return on or before 31st July of the year. After filing the return, the tax department processes the return. During this process the IT department may find various discrepancies, such as data, calculations etc. In such cases the department will send a notice, also known as intimation notice under section 143(1).

This notice is sent to the registered email ID of the tax payer. An SMS is also sent to the registered mobile number informing that the intimation notice has been sent to the registered email ID.

An income tax notice under Section 143(1) will be issued in any of the following scenarios after automated verification of tax return filed:

1. Any arithmetical error in the return;

2. An incorrect claim, if such claim is apparently wrong in the tax return filed;

3. Disallowance of loss claimed, if return of the previous year for which set off of loss is claimed was furnished beyond the due date for filing income tax return;

4. Dissallowance of expenditure indicated in the audit report but not taken into account in computing the total income in the return (applicable from AY2017-18);

5. Disallowance of deduction claimed under Section 10AA, 80-IA, 80-IAB, 80-IC, 80-ID, or 80-IE, if the return is furnished beyond the due date specified under sec 139(1)

6. Addition of income appearing in form 26as or Form 16A or Form 16 which has not been included in computing the total income in the return;

7. Information with is inconsistent with another entry of the same or some other return;

8. Information required to substantiate an entry which has not been provided like donation information;

9. If any deduction exceeds the statutory limit allowed;

Time Limit

Assessment under section 143(1) can be made within a period of one year from the end of the financial year in which the return of income is filed. Thus the intimation for tax or interest due under Section 143(1) should not be sent after the expiry of one year from the end of the financial year in which return is filed.

Process for Responding to Income Tax Notice under Section 143(1)

The tax notice u/s 143(1) will be sent to the assessee specifying the sum determined to be payable by, or the amount of refund due to the taxpayer. In case there is no sum payable or refundable, the acknowledgement of the return of income will be deemed to be the intimation.

The taxpayer should note that merely because notice is received from the income tax department, it does not mean that it is mandatory for the taxpayer to appear in person before the authorities. In many cases, it shall be sufficient if the person receiving the notice furnishes a response to it in the physical or electronic mode.

If the taxpayer would like to revise the income tax return after receiving a notice under Section 143(1), the assessee must be aware that the deadline for revising the return is 15 days from the date of the notice. If the taxpayer fails to respond in a timely manner to the income tax notice u/s Section 143(1), the income tax return will be processed after making necessary adjustments mentioned in the income tax notice.

To respond to an income tax notice under Section 143(1), follow the steps below:

Step 1: Log in to your account on the Income Tax Department E-Filing website.

Step 2: Click on the E-Proceedings tab and select E-Assessment/Proceedings.

Step 3: Select Prima Facie Adjustment u/s 143(1)(a).

Step 4: You will see the details of the notice received. Click on Submit to being the process of submitting the response.

Step 5: You will now see the list of all mismatches identified. Click on the drop-down next to the Response to submit a response to the mismatch.

Step 6: In case you have any specific information or explanation, enter the same in the justification or remarks.

Step 7: Submit any supporting documents regarding the amounts of discrepancy before you submit your response.

Step 8: Click on “Submit”. Once the response is submitted, an acknowledgement will be provided.