Income Tax Notices
4 Points You Must Know About Income Tax Notices
1. Difference Between Notice and Intimation:
Every communication from the income tax department is not a notice. So, when you get any communication, first try to ascertain whether it is a notice or simply an intimation. Most of the intimations does not require any response from your side.
2. Timely Compliance:
It is of utmost importance that you timely reply to the notice. These small things work in your favour in your future course of action.
3. Reply with the help of an Expert :
In the case of income tax notice, it is better to take the help of an expert. Only an expert can understand the future consequences of the notice and guide you suitably.
4. E-Proceeding Tab of Income Tax Website:
It is a good practice to check the E-proceeding tab after login into the income tax website to check the progress or status of your notice. There are chances that you may miss the email or hard copy of the communication from the income tax department.
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FAQ`s Regarding Income Tax Notices
In a general sense, the income tax notice is a communication from the Income Tax Department regarding the return filed or liable to be filed but not filed to the taxpayer. Technically speaking, not all communications by the department is a notice. Sometimes the communication is like an intimation only with no further compliance needed from the taxpayer.
The notice under section 143(3) is not notice but an assessment order. It is the outcome of the scrutiny assessment done by the assessing officer of the income tax department.
After checking all the records and supporting documents during the scrutiny, the assessing officer will issue the assessment order. This order is issued under section 143 (3) of the income tax act. You can file an appeal against that assessment order to the higher authorities as prescribed under the income tax act.
Whenever the income tax department finds that any sum of money is due from the taxpayer because of the assessment order or otherwise, it issues a demand notice.
This demand notice is issued as per section 156 of the income tax act.
You need to pay the amount demanded within 30 days of the receipt of the notice. However, in certain situations, the department can give you even less than 30 days to pay the amount demanded.
The notice under section 143(2) is called scrutiny notice. The scrutiny notice under section 143(2) can be one of the following three types.
1. Limited Scrutiny
2. Complete Scrutiny
3. Manual Scrutiny
When scrutiny notice is issued, it means that the Income-tax officer will do checking to satisfy himself regarding the correctness of the figures mentioned in your income tax return.
He will check your expense vouchers, books of account, bank statement and other records and registers to verify your income.
After checking all the records and supporting documents, the assessing officer will issue the assessment order. Based on that order, your income will be assessed.
If you are not happy with the assessment order, you have an option to file an appeal against that order.
Section 142(1) of the income tax act deals with a notice which can be issued under the two following circumstances.
1. When you have not filed the return, but assessing directs you to file the same; or
2. You have filed the return, but the assessing officer requires specific information or documents to assess your correct income.
Section 143 (1) deals with the preliminary or summary assessment. In this assessment, no detailed scrutiny of the return of income is done. After this initial assessment, the taxpayers are informed by an intimation issued under section 143(1). This preliminary assessment is fully automatic, and the intimation is also computer- generated. In this assessment, adjustment is done related to the arithmetical error in the return or an incorrect claim apparent from the information available in the already filed return. The time limit of this assessment is nine months from the end of the relevant previous year.
Section 139 (9) deals with a “defective “ return notice. When the income tax department rejects the return of income filed by you due to specific errors in the return, it is called a defective return. The income tax department gives a time of 15 days to correct the defect found in return. The department intimates the defect details by way of defective return notice issued under section 139(9) of the income tax act.
As per the income tax act, 1961, there are the following four types of assessment.
1. Summary assessment :
Section 143 (1) of the Income-tax Act,1961 deals with preliminary or summary assessment. The computer system does it.
2. Scrutiny assessment :
Section 143(3) deals with the scrutiny assessment. The order is passed after scrutiny of the records and documents which the taxpayer produces.
3. Best judgment assessment:
Section 144 deals with best judgment assessment. This type of assessment is done based on the best judgment of the assessing officer in the absence of proper records and documents.
4. Income escaping assessment :
Section 147 deals with the above type of assessment. This type of assessment is done when the assessing officer has reasons to believe that income has escaped from the assessment. It includes reassessment.
The assessment order is an order which is done by
the assessment officer in the above types of
The income tax intimation order is a password-protected document. The default password to open the file is your PAN in lower case and your date of birth. Suppose your PAN number is AAAAA0000A and your date of birth is 01.01.1990, then the password will be aaaaa000a01011990.