• HDFC securities
• 19 Jul 2018
• e-Tax

Filing of Income Tax Return correctly is important. Even the slightest of mistake or omission of income or any other omission in the income tax return can lead to Income Tax Notice.

 

There can be many reasons for which the I-T department can send a notice. If you get one, don’t panic, stay calm and then decide to respond to the notice as a clarification to the query. An Income Tax Notice can be a simple query based or even a scrutiny notice.

 

There are specific sections under which you may get a notice from the I-T department. You simply 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.

 

Below is the list of Tax notices – why do you get them and what needs to be done to comply with them:

 

Notice under section 139(9) – Notice for a defective return

 

Any tax payable in the return or any missing information like Profit and Loss or Balance Sheet in ITR4 is left blank then it leads to making the return “defective”. Tax Return should only be filed with a 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. Or at times if you have filed your tax return in wrong ITR form. Means if you have income from salary and capital gains you should file it under Form ITR 2 and not under ITR 1. Choosing the right form as per the income source is a must. In this case, 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. The deadline is normally within 15 days of intimation, failing which the original return will be treated as an invalid return.

 

Section 131(1A): Inspection of Income (concealment of income)

 

At times if the Assessing Officer (AO) is of the opinion that one has concealed income while filing of the income tax return then the AO can send income tax notice u/s 131(1A). This notice is basically an intimation that AO wants to investigate the matter. Here, the AO 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.

 

Intimation u/s 143(1)

 

Intimation u/s 143(1) is a notice which is 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 available with Department of Income Tax. In this case, this is the acknowledgment of Department of Income Tax of the same.

 

In case of 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 e proceedings section in your account or file rectification return to correct the data in your tax return.

 

Notice under section 142(1) – Inquiry notice before assessment

 

This kind of notice is issued by DIT to gather some information –8 if a tax return has been filed earlier or may be any documentary proof against the claims made. This notice is issued before the assessment of the return.

 

Notice under section 143(2) – Notice for the commencement of scrutiny proceedings

 

In this kind of notice, 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 to the notice if mentioned.

 

Notice under section 148 – Notice to commence reassessment proceedings

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 – Intimation to set off of demands and refunds

 

It is basically an intimation and not a notice from the Income Tax department. It is usually issued when the tax refund (full/partial) for an assessment year is adjusted against any tax demand which is due from the taxpayer.

 

Above mentioned notices are common in nature. 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's better to file properly and carefully.

 

The tax return filed should be in sync with 26 AS tax credit statement linked with your PAN.