Enquiry form
The Income Tax Department sends the notices for various reasons like not filing the income tax returns, any defect while filing the returns, or other instances where the tax department is requiring any additional documents or information.
Nothing is frightening or alarming about the notice that is received. But the taxpayer has to first understand the notice, the nature of the notice, the requestor’s order in the notice, and take steps to comply.
Let us understand the various types of notices or intimations issued by the Income Tax Department.
Notice under Section 142(1) is usually served to call upon documents and details from the tax payers, and to take a particular case under assessment. The basic purpose is to inquire the details of the assessee before making assessment under the Act. It can be related to ‘Preliminary Investigation’ before starting the assessment.
Three types of notices can be sent under section 143(1): 1.Intimation where the notice is to be simply considered as final assessment of your returns since the AO has found the return filed by you to be matching with his computation under section 143(1). 2. A refund notice, where the officer’s computation shows amount excessively paid by the assessee. 3. Demand Notice where the officer’s computation shows shortfall in your tax payment. The notice will ask you to pay up the tax due within 30days. No intimation under this sub-section shall be sent after the expiry of one year from the end of the financial year in which the return is made
Where any tax, interest, penalty, fine or any other sum is payable in consequence of any order passed, the AO shall serve upon the assessee a notice of demand, specifying the sum do payable. The notice of demand is received in the cases where assessment has been made in respect to assessee. Generally, notice of demand is not received to every assessee for regular payment of taxes. Assessee on his own pays the taxes with self-assessment. The tax so demanded is payable, generally within 30 days of the service of notice of demand, which may be reduced by the AO with prior approval of JCIT. In case of delay in payment of tax, the assessee shall be deemed to be in default and liable to pay simple interest u/s 220(2) @ 1% for every month or part thereof from the end of the period allowed u/s 156, further penalty u/s 221(1) may be imposed.
This notice is basically sent after notice u/s 142(1) has already been sent. It means AO was not satisfied with the produced documents or may be AO has not received any documents. If you get Notice under Section 143(2) it means your return has been selected for detailed scrutiny by your Assessing Officer.
If AO has reasons to believe that any income chargeable to tax has escaped assessments, he may assess or reassess such income, which is chargeable to tax and has escaped assessment. To initiate proceedings under Sec 147, the AO is required to have a reason necessarily. The onus of stating the reasons is on AO. Also, Notice under Sec 147 cannot be sent in regard to the income involving matters which are the subject matter of any appeal, reference or revision. This tangible reason should give him a belief that there is income which has expected assessment. The Supreme Court has clarified that the act nowhere states that the beliefs or reasons of AO should ultimately proved to be escaped income in order to be valid reason. Even though if the contention of the AO shall stand invalid in any case but the beliefs were reasonable on his part, the Notice and such assessment shall stand valid.
If the assessing officer has reason to believe that tax has not been paid for the previous years and he wants to set off the current year refund against that demand, a notice under Section 245 can be issued. However, the adjustment of demand and refund could be done only if you have been provided proper notice and an opportunity to be heard. The timeline to respond to the notice is 30 days from the day of receipt of the notice. If you do not respond within the aforesaid timeline, the assessing officer can consider this as consent and proceed with the assessment. Therefore, it is advisable to respond to the notice at the earliest.
Assessee is always in need of guidance wherein his tax liability gets reduced and that is when the services of tax advisors come into play. Income Tax advisors have the indepth knowledge about the Income Tax laws and rules which enables them to understand how the tax liability be reduced in complicated financial situation involving large financial transactions. Also they can guide about the tax consequence or the tax planning when a major life event takes place like death of a spouse, marriage, divorce, child birth or adoption, the purchase and sale of a new property, job loss, new business startup, inheritance and more.
The reply for the Income Tax notice should be responded to within 15 days of the intimation send by the assessing officer. For an extension, a written application can be made to the local assessing officer.
Notice 139 (9) is sent by the assessing officer if the ITR filed by the taxpayer is defective or incorrect the office will also provide the proper description of the errors and also a solution for rectifying the errors.
The Documents are required to vary with the type of Income Tax notice that is served to the taxpayer. The basic documents needed to reply to an income tax notice would be: The Income Tax Notice copy. Proof of Income source such as (Part B ) of Form 16, Salary receipts, etc. TDS certificates, Form 16 (Part A) Investment Proof if they are applicable.
Primary response can be made online, by logging in into the Income Tax profile created.
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