After filing your Income Tax Return, you may receive some notices from the tax department. Understanding the meaning of those notices and giving appropriate response is very important for every taxpayer.
This guide will help deal with two different category of notices:
A) Notice under section 143(1)
B) Notice under section 143(1)(a)
A) Notice under Section 143(1) and its Response
Three types of notices can be sent to you u/s 143(1):
Intimation where the notice is to be simply considered as preliminary assessment of your returns since the AO has found the return filed by you to be matching with his computation under section 143(1).
A refund notice where the AO’s computation shows excessive tax paid by you.
A demand notice where the AO’s analysis shows shortfall in your tax payment.
The notice will ask you to pay up the tax due within 30days.
Time limit for the notice to be served is up to 1 year after completion of relevant
Assessment Year. Notice is sent after the expiry of one year from the end of the Financial Year in which the return is filed.
How to reply to notice received under section 143(1)?
If details provided by you in your tax return
are verified by the Income Tax department and no discrepancies are found then the notice will serve as final assessment
of the return. All you need to do is to take a print out of the notice and keep it safely
with your tax related documents.
If you are getting a refund, wait for the cheque or direct transfer of cash into your account. However, if you do not receive a return due to wrong information being furnished at the time
of filing return then you need to send a request for reissue of refund. Click here to know how you can send a request for reissue of refund.
If there is a tax demand then this intimation becomes notice of demand u/s 1 e otce says case of Demand, this intimation may be treated as Notice of demand u/s 156. Accordingly,
you are requested to pay the entire dead t days of recet of ts tato
B) Notice under Section 143(1)(a) and its Response
In the AY 2017-18, several taxpayers have received this notice. The income Tax department sends this notice seeking a response to the errors/ incorrect claims/ inconsistencies which attract adjustment(s) under Section 143(1)(a) of the I-T Act.
A number of taxpayers who had filed their returns for AY 2017-18 have received emails from the Central Processing Centre (CPC) seeking clarification under section 143(1)(a) of the I-T Act to the mismatch between the income and deduction when compared to Form 16, Form 16A or Form 26AS.
Recipient of the mail is given a time period of 30 days from the date of receiving the intimation to send a response. If the recipient fails to respond, the return is processed after making necessary adjustment(s) u/s 143(1)(a), without providing any further opportunities in this matter.
Procedure for Response to CPC against Proposed Adjustment u/s 143(1)(a) of the Income Tax Act,1961
Before we understand the process to send a response, let’s first look at some common reason for which taxpayers are getting this notice.
Various Reasons for Receiving the Notice
If you have claimed investments under section 80C or HRA that are not mentioned in your Form 16, you are likely to receive an email from the department asking you to explain the mismatch.
Open the notice and scroll down to Page 2 to understand the difference –
The mismatch is due to an extra deduction of Rs.1,01,000 that's not in the Form 16.
If you look at entry no. 1 & 2, we can deduce the following:
In return it shows Income from salary as Gross Salary less allowances/exemptions
But if we see Form 26AS, it shows in general Gross Salary as income and TDS next to it.
Due to this, you can see the difference in income.
If you look at entry no. 3, the additional mismatch of Rs 5,227 is due to an extra deduction that's not present in the Form 16.
Taxpayers who have also had savings bank account interest or income from fixed deposits or house property that's not included in the Form 16 may also get this email.
Time limit for revision of return
If you want to revise the return against this notice received then, it must be within 15 days of agreeing with the demand.
Consequences of not responding to notice within 30 Days
The tax return will be processed after making necessary adjustments mentioned in the 143(1)(a) communication.
Process to Respond
1. Log in to the Income Tax Department website www.incometaxindiaefilling.gov.in
2. Go to “E-Proceeding” Tab and choose “E-Assessment/Proceedings”
3. Click on “Prima Facie Adjustment u/s 143(1)(a)”
4. Now you can click on “Reference ID” link to see the notice received to you on mail.
5. If you want to directly submit the response, click on “Submit”.
6. Now you can see a list of all the mismatches which were mentioned in your intimation notice received on email.
Click on the dropdown under the column “Response” and choose any of the two responses.
Agree to addition: If you have forgotten to include income from fixed deposits etc. that are mentioned in your Form 26AS, select this option.
If you agree with the demand then you must file a revised return within 15 days.
Disagree to addition: If you have added allowances/deductions in your tax return directly and have necessary proofs for it, then select this option.
Now when you disagree, you'll see a section open where you can select from a list of reasons of disagreement.
Fill in the details as mentioned below –
- TAN: TAN of the employer (available in the Form 16)
- Deduction made under section: Enter 192 if you have made a deduction against salary income
- Amount paid/credited by deductor: Check your Form 16 Part A for this number
- Nature of Receipt as per deductor: Salary (If income earned is from salary)
- Income/Gross Receipt as per return: Enter the income after taking the deduction into account.
- Head of Income/Schedule under which reported in the return: 1 (accepts only numeric value)
- Reason: Select the appropriate reason and submit response against your intimation –
If mismatch has occurred due to HRA, select the option “Allowances exempt claimed in return but not in Form 16”
If the mismatch has occurred due to section 80 deductions, select the option “Deductions claimed in the return but not in Form 16”
- Justification/Remarks: If you have anything specific to explain regarding the calculations or amounts considered in calculation, do mention such details there.
Note: You will have to attach the supporting documents regarding the amounts of discrepancy before you submit your response. (e.g., rent receipts, life insurance statement, home loan interest certificate, Form 16, Form 16A etc.)
7. Click on “Submit”. Once you submit your response, you will see an acknowledgement screen.