Notice
Types Of Notices/Intimations
Notice Under Section 133(6)
The Income Tax Department has enacted the E-Verification Scheme 2021 which involves calling for information from those taxpayers where material difference is observed between the ITR field and data available in form AIS. The reason for such notice can be as follows
1. ITR was not filed in spite of having income exceeding the basic exemption limit as per AIS.
2. Taxable Income in the form of Salary, Interest Income, and Capital gain exists in the Annual Information Statement (AIS). However, values are not entered correctly in the ITR Form.
3. Significant higher expenditure in the form of Purchase of immovable property, Foreign travel, and Purchase of Mutual funds/stocks in comparison to the Income declared in the ITR
Notice u/s 133(6)
Steps To Respond To Notice u/s 133(6)
1. Analyse the reason for receiving such notice and identify if there was any actual misstatement from taxpayer side or error from department
2. Login to the income tax portal >> Pending Action >> Compliance Portal >> E Verification
3. Provide detailed response along with necessary attachment in the questionnaire provided
4. If the misstatement is from the taxpayer and additional liability is required to be paid, then such taxpayer can file the Updated return u/s 139(8A) along with the necessary penalty voluntarily and provide a response accordingly
5. However, if the error is from the department side you can provide the response in the insights portal along with supporting documents.
Notice Under Section 142(1)
A notice under section 142(1) can be issued under two circumstances:
If you have filed your return, but the assessing officer requires additional information and documents; or
If you have not filed your return but the assessing officer wants you to file it.
The information is called for to enable the officer to make a fair assessment. Being non-responsive to this notice has consequences,
A penalty of Rs 10,000 can be levied for each such failure
Prosecution, which may extend up to 1 year
Both of the above.’
Intimation Under Section 143(1)
After having filed your returns, it is electronically processed by the Central Processing Centre (CPC). The income is computed after making the following adjustments to the total income in return :
Any arithmetical error in the return
An incorrect claim (provided the incorrect claim is apparent from the information filed)
Disallowance of incorrectly claimed loss or expenditure
Any income which has not been included in the return
Upon successful processing of the return, an intimation under section 143(1) is issued by the CPC under any of the three instances:
There is a tax liability to be paid
A refund has been determined
There is no refund or demand, but there is an increase or reduction in the amount of loss.
In case there is a tax demand, then the intimation must be issued within nine months from the end of the year in which the return has been filed. For example, if you have filed your returns for Assessment Year (AY) 2024-25 on 27 July 2024, then an intimation can be issued anytime on or before 31st Dec 2025. Processing of returns under this section has been made mandatory from AY 2017-18.
How To Analyse The Above Notice?
1. The notice provides a comparative analysis of the date provided in the ITR and Computed u/s 143(1).
2. Identify which line item is causing such additional liability
3. It can be a mismatch in Income, Deduction or Prepaid taxes
4. If such demand is due to an error, then Rectification return u/s 154 can be filed within a period 4 years from the end of such assessment year
5. If demand is accurate, then it can be paid off using the link provided
Notice Under Section 143(2)
The purpose of this notice is to notify the assessee that the return filed has been picked for scrutiny. It is pertinent to note that the section under which it will be scrutinized is different from the one in which the notice has been issued. Via detailed scrutiny, the assessing officer intends to be assured that you have not done any of the following:
- Understated your income
- Claimed excessive loss
- Paid lesser taxes
Through this notice, the taxpayer is required to respond to the questionnaire issued along with the documents required by the income tax department. The assessing officer is supposed to service this notice within 3 months after the completion of the assessment year to which it pertains.
For instance, Rohit filed his return on 20th May 2024 for the AY 2024-25. Here notice under section 143(2) can be issued to Rohit within 3 months after completion of the AY to which it pertains, i.e. 31th July 2025.
How To Respond To Notice u/s 143(2)
- Carefully go through the notice and identify the reason why such notice has been issued, which will be provided in the Annexure.
- Prepare a response under a cover letter, providing a detailed explanation in a legitimate manner and answering truthfully to all the questions provided in detail.
- Log in to your Income tax portal under e-proceeding, provide the response to such notice with the cover letter and also attach the necessary documents as requested.