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Income Tax Notices: Different Types of Notices Under the Income Tax Act, 1961

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When an assessee files a tax return, the Income Tax Department examines it and issues assessment intimations, scrutiny notices, and other notices. This is true even though the assessee fails to file his income tax return. For the taxpayer, receiving a tax notice from the Income Tax Department is a key crisis. However, this is not a time to be horrified; in this case, the taxpayer must correct the error for which he received the department's notice. A taxpayer may receive a Department of Revenue Return Notice for one of the following ten reasons:

 
  • Inadequate Information Regarding LTCG from Equity
  • TDS Claimed Mismatching Form 26A
  • For Hiding Actual Income
  • Not Reporting Assets Acquired in the Name of the Spouse
  • For Filing an Improper Return
  • If You Have Done Huge Transactions

How to check if there is an Income-tax notice issued?

How to check if there is an Income-tax notice issued?

Here is a quick stepwise method to find out if you have received an Income-tax notice of intimation:

Step 1: Login / Signup on https://portal.incometaxindiaefiling.gov.in

Step 2: Go to "My Account" from the top menu

Step 3: Select "View e-Filed Returns/Forms" from the drop-down.

Step 4: Click on "Ack. No." for the concerned Assessment Year.

Step 5: If you have any of the following messages your return is subject to correction.

Under the Income-tax Act of 1961, the Income-tax Department issued notices for various reasons. The following are some of them:

Notice under Section 142(1)- Inquiry before the assessment
 

Notice under Section 142(1)- Inquiry before the assessment

In two cases, the assessing officer issues a notice under section 142 (1). To begin, the officer may request additional information and documents related to your tax returns. Second, if the officer requests that the return be filed even though it has not yet been filed. If you do not respond to Section 142(1) notice, you will face a fine of INR 10,000, a year in prison, or both if you do not respond.

The primary goal is to learn more about the assessee before assessing the Act. It could be linked to the 'Preliminary Investigation' phase of the assessment.

Notice Under Section 143(1)- Intimation Letter

Notice Under Section 143(1)- Intimation Letter

The tax department processes your ITRs online after you file and checks them. The tax department sends an intimation to all taxpayers u/s 143 following this initial assessment (1). It includes information about an additional tax liability or refund, as well as whether the loss amount stated in the return should be increased or reduced, and whether the return has been filed correctly.

Notice Under Section 143(2)- Scrutiny Notice

If the AO thinks you have filed a faulty income tax return, he will notify you under this section. Missing information, using the incorrect ITR form, submitting an incomplete return, and so on are all examples of errors.

The officer would also point out the flaw in the income tax return and suggest a solution. You have a 15-day window to respond to the notice. Your ITR will be denied if you do not respond.

The purpose of this notice is to inform the assessee that his or her tax return has been chosen for scrutiny. It's worth noting that the section under which it'll be examined differs from the one under which the notice was issued.

Notice under Section 148 - Income escaping assessment

Notice under Section 148 - Income escaping assessment

When the assessing officer (AO) has reason to believe that a taxpayer has filed his ITR on a lower income or has not filed when required by law, this notice is sent. The amount and nature of income escaped determine the time limit for sending the notice under this section.

The assessing officer has the authority to evaluate or reassess your income in these cases, depending on the facts of the case. The assessing officer should serve a notice to the assessee requesting his return of income before making such an assessment or reassessment.

Notice under Section 156 - Notice of Demand

A notice under Section 156 will be issued if the taxpayer is required to pay any type of demand to the income tax department, such as a penalty, fine, tax, or any other amount. The taxpayer must pay the due amount within 30 days of receiving the notice, which is also known as a notice of demand. This notice can be served at any time.

If the assessee fails to pay the tax on time, he or she will be considered in default and will be subject to simple interest at 1% per month or part thereof, as well as a penalty under section 221(1).

Notice Under Section 245

Notice Under Section 245

The assessing officer (AO) will issue this notice under section 245 of the Income Tax Act if it is suspected that you have not paid taxes in the previous fiscal year (FY) where you had a tax liability and the tax refund from the current FY can be used to pay off the tax liability. If you do not respond within 30 days, the AO will assume that you consent to the AO adjusting your tax refund to account for past tax liabilities and issuing your refunds after such adjustments.

Notice under Section 139- Defective Return

If the AO thinks you have filed a faulty income tax return, he will notify you under this section. Missing information, using the incorrect ITR form, submitting an incomplete return, and so on are all examples of errors. The officer would also point out the flaw in the income tax return and suggest a solution. You have a 15-day window to respond to the notice. Your ITR will be denied if you do not respond.

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