Filing of Income Tax Return (ITR) is important and that too even correctly is all the more important. Even slightest of mistake or income or any other omission in the income tax return can lead to income tax notice.
There can be many reasons for which I-T department can send a notice. If you get one, don’t panic, stay calm and then decide to respond the notice as the clarification to the query. An income tax notice can be a simple query based or it can even be a scrutiny notice.
There are specific sections under which you may get notices from the I-T department and you just need to understand the purpose of such notices and respond appropriately within the stipulated deadline to avoid any penalties or legal action by Income Tax Department.
Here is the list of 7 common types of income tax notices
Notice under section 139(9)
Any tax to be payable or any missing information can make the return “defective”. Tax return should only be filed with the tax refund or tax nil status. Any tax payable if cited should be paid first and then tax return should be filed with nil status. You can also receive the notice if you have filed your tax return in wrong ITR form. Means if you have income from salary and capital gains you should file in Form ITR 2 and not in ITR 1. Choosing the right form as per the income source is a must. In this case, as well notice u/s 139(9) can be issued.
On receiving such notice, one should respond within the deadline mentioned in the notice by filing the revised return u/s 139(9) in the response to the notice (generally within 15 days of intimation), failing which the original return will be treated as an invalid return.
Notice under section 131(1A)
At times if Assessing Officer is of the opinion that one has concealed the income while filing of the income tax return then AO can send income tax notice u/s 131(1A). This notice is basically an intimation that AO wants to investigate the matter and may impound the books of accounts and other documents by providing the reason for the same. There is no specific time limit to serve this notice. So don’t conceal your income. It would only mean trouble.
Notice under section 143(1)
Intimation u/s 143(1) is a notice which actually a processing statement from Department of Income Tax stating that the income, deduction and tax details filed by you are in line with records of Department of Income Tax. In this case, this is the acknowledgement of Department of Income Tax of the same.
If there is any discrepancy or mismatch, Department of Income Tax would reject the claims and reduce the tax refund claimed by the amount of mismatched or will raise the demand. In this scenario, a notice u/s 156 with tax demand is issued with the intimation.
In this case, if you disagree with the processing of the return you can either reply to the notice through the e-proceedings section in your account or file rectification return to correct the data in your tax return.
Notice under section 142(1)
This kind of notice is issued to gather some information – if the tax return has been filed earlier or may be any documentary proof required against the claims made. This notice is issued before the assessment of the return.
Notice under section 143(2)
In this kind of notice, AO may ask the assessee to produce the documentary proof of the claims to verify the same. The AO may ask the assessee to produce the supporting documents to support his claim. This has to be done in person by the assessee if asked by AO. There could be a timeline to adhere if mentioned.
Notice under section 148
Sometimes after assessment if the AO feels that some income may be skipped or concealed by the assessee in the return, the AO can reopen the case for reassessment and send notice u/s 148. Before issuing such notice AO must have valid reasons and records to justify the same and issuing such notice.
Notice under section 245
It is basically an intimation and not a notice from Income Tax department. It is usually issued when the tax refund, either full or partial, for an assessment year is adjusted against any tax demand which is due from the taxpayer.
Above mentioned notices are common in nature and it is all the more reason to file your tax return mentioning all income, deductions and tax records properly as Department of Income Tax has all your income and tax details including your investment details linked with your PAN.
Concealment of income or even missing information by mistake can lead to notice. So it is better to file properly and carefully. The tax return filed should be in sync with 26 AS tax credit statement linked with your PAN.
The article is written by Deepak Jain, chief executive officer of TaxManager.in