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August 3, 2023

5 types of notices you can receive after filing ITR

5 types of notices you can receive after filing ITR

You may be surprised to receive an intimation/notice from the income tax department even if you have filed your income tax returns within the due date. You would not be sure about what it is and how to respond to it. Don’t worry, I will break it down for you to help you understand your notices. Certain notices on income tax contain information, such as an announcement of a tax obligation under section 143(1) or information for an inquiry under 142(1).

 There are 5 types of notice:

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

Or Both of the above

Intimation under Section 143(1)

As per Section 143(1), Intimation means an announcement to the ITR department IRS to the taxpayer. It is a way of letting taxpayers know about mathematical mistakes or any changes that need to be made. There’s no need to be worried because it’s simply an announcement and does not warrant any kind of order or examination issued by the Income Tax Department. The notification for ITR processed could concern:

  • If you’re eligible to receive refunds from the Income Tax Department
  • Any tax or interest rate that is due

A computer system creates this notice or notice under Section 143(1) in response to wrong tax claims or any mathematical error.

Notice Under Section 143(2)

The purpose of this notice is to notify the assesse 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 6 months after the completion of the assessment year to which it pertains.

Notice under Section 148

An assessing officer may have a reason to believe that you have not disclosed your income correctly and therefore, you have paid lower taxes. Alternatively, you may not have filed your return at all, even if you must have filed it as per law. This is termed as income escaping assessment. Under these circumstances, the assessing officer is entitled to assess or reassess your income, according to the case. Prior to making such an assessment or reassessment, the assessing officer should serve a notice to the assessee asking him to furnish his return of income. The notice issued for this purpose is issued under the provisions of Section 148.

Notice under Section 245

If the assessing officer has reason to believe that tax has not been paid for the previous years and he wants to set off the current year refund against that demand, a notice under Section 245 can be issued. However, the adjustment of demand and refund could be done only if you have been provided proper notice and an opportunity to be heard. The timeline to respond to the notice is 30 days from the day of receipt of the notice. If you do not respond within the aforesaid timeline, the assessing officer can consider this as consent and proceed with the assessment. Therefore, it is advisable to respond to the notice at the earliest.

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