Income tax notices: If an error is discovered in the filed Income Tax Return (ITR), the Income Tax Department sends notices to the taxpayers. The tax department commences procedures against you based on your mistake and response to the notice. As a result, it is critical to understand the circumstances under which you may receive an income tax notice, as well as the purpose for the notice’s delivery. This will enable you respond to such a notice when it arrives.
Although taxpayers may receive several forms of income tax notices, not all of them are applicable to people.
Here are some of the tax notices that a salaried individual may receive if inaccuracies are discovered in their ITR:
- Tax notification under Section 143(1)(a)
This tax notification, known as an Intimation notification (Intimation Under Section 143(1) of the Income Tax Act), is sent after the tax department has satisfactorily processed the taxpayer’s ITR. This notice will show whether or not the computations presented in the ITR were accepted by the Income Tax Department. If there is a discrepancy between the calculations you filed in the return and the calculations done by the tax department, the cause will be stated in the notification notice.
Possible causes for obtaining a 143(1) mismatch intimation notice: Such notifications can be issued in the case of ITRs filed under sections 139(1)/139(5), as well as ITRs filed in response to notices issued under section 142(1). A taxpayer may receive a mismatch notification notice due to discrepancies between the ITR filed by the taxpayer and the income calculated under section 143(1), arithmetic errors, any incorrect claims, incorrect interest calculation under section 234A/B/C, mismatch of tax return details when compared to Form 26AS, etc.
Time limit for responding to such notices: You must take action only if your ITR calculation differs from that of the tax agency. If the intimation notice is for a refund and there is no discrepancy between your ITR calculation and that of the tax department, you do not need to respond. Taxpayers who receive an intimation under section 143(1)(a) must respond within 30 days of the intimation being issued.
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- Defective notification under Section 139(9)
The Income Tax Department may send you a notice under Section 139(9) for providing incomplete or erroneous information in the ITR you filed. An ITR may be considered faulty for a number of reasons. For example, submitting the ITR using the incorrect form.
Some of the most common reasons for receiving a Defective Return Notice include: claiming HRA in the ITR but having no HRA component in the salary breakdown, claiming TDS on income while filing the ITR but failing to report the relevant income, such as not declaring FD interest in the ITR but claiming the TDS deducted on such FD.
When will a Defective ITR Notice be issued?
This notice may be issued within nine months of the close of the fiscal year in which the ITR is lodged. The defective ITR notice can be issued on or before December 31, 2025, for ITRs submitted in fiscal year 2023-24.
Time limit to reply to defective ITR notification: “If your return is discovered to be defective, you have 15 days from the date of receipt of the notice or the time limit specified in the notice to correct the defect in your filed return. You can, however, request an extension.
- Notice under section 142(1) of the Income Tax Act
This tax notice is often referred to as an inquiry before assessment or reassessment notification. If no ITR is filed under section 139(1), the person may be issued a notice to file an ITR under section 142(1).
Possible explanations for this notice: The tax agency wants to know why you did not file ITR despite having proof of income above the basic exemption limit. You must respond to all inquiries posed by the income tax department, as well as give the relevant facts and documentation to back up the claims stated in your submitted ITR. There is no time restriction for issuing this notice.
Time limit to react to notice: Taxpayers must respond to the notice within the time restriction specified in the notice, which is typically 15 days.
- Section 143(2): This notice is referred to as a scrutiny assessment notice. This notice is provided when the tax department wishes to conduct a thorough examination of the ITR submitted and confirm the veracity of all claims (income and deductions) made by you.
Possible explanations for this notice: A notification under section 143(2) may be issued to the taxpayer for the purpose of undertaking a scrutiny assessment under section 143(3). Scrutiny assessment is a detailed assessment performed to evaluate the authenticity of numerous claims, deductions, and other items presented by the taxpayer in his ITR.
Time limit to respond: Typically, 15 days are provided to respond to such a notification; however, the time restriction is specified in the notice itself. After getting this warning, you must submit your answer by uploading the necessary papers.
- Section 148
Section 148: This notice is issued when income escapes assessment. This notice is given when the assessing officer (AO) discovers proof that the taxpayer’s income eluded assessment in the previous year. Before issuing a show-cause notice under 148A (b), the tax department sends a notice under section 148 to inquire as to why the case should not be reassessed.
After receiving a response from the taxpayer, or if there is no answer, the income tax department issues an order under section 148A (d) declaring whether the case is eligible for reassessment.
When may such a notice be issued? A notice under section 148 can be given within three years and three months of the end of the relevant assessment year if the income avoided assessment does not exceed Rs 50 lakh. However, if the income that escapes assessment exceeds Rs 50 lakh, reassessment can be done for 5 years and 3 months for the relevant assessment year.
Time limit to respond: The taxpayer must respond to the notice within the time period specified in the notice, which is typically 30 days.
- Section 245: According to this section, the income tax department may deduct an income tax refund from the current year from any previous year’s tax owed. This adjustment is only made if there are any income tax or tax refund payable in the current year.
This letter could be sent to you if you have any tax dues from a previous year that have not been settled or paid.
When can this notice be served: There is no time limit for mailing this notification.
Time restriction for responding: The intimation notification typically has a 30-day time limit. If you have any objections to this notification or have already paid the tax amount due, please include evidence of payment with your response.
Taxpayers may receive further notices such as…
Section 154: If the Income Tax Authority discovers an error in the claims made in the return after accepting the ITR, it may issue a notice under Section 154 to correct the error.
Section 263: If the Controller of Income-tax (CIT) determines that any order passed by his subordinate officer is erroneous and detrimental to the government’s interests, the CIT may issue a notice under Section 263 to modify the order passed by his subordinate officer within 12 months of the end of the year in which the erroneous order was passed.
Section 131 (1A): If the Principal Governor General, Director General, Principal Director, Director, Assistant Director, Deputy Director, or any other person has reason to believe that income has been disguised, a notification is issued under this section. The taxpayer must file his response within the time frame specified in the notification, which is typically 30 days.
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