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What is Intimation u/s 143(1)?

Estimated Read Time: 7 min

Intimation u/s 143(1) is a notice sent by the I-T department to all the tax filers informing them about the result of the preliminary assessment of their tax return. In this guide by H&R Block, you will learn what this tax notice means and how you need to respond to it.

How to respond to intimation u/s 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 the notice u/s 143(1) states that the taxpayer needs to pay more tax, then this information shouldn’t be considered mere intimation but a demand of such tax due. Hence, the intimation notice in this case becomes notice of demand u/s 156.

Types of notices you can receive under section 143(1)

3 types of notices can be sent to you u/s 143(1) by the Income Tax Department:

  • No demand & no refund: 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).
  • Refund: A refund notice where the Assessment Officer’s (AO) computation shows excessive tax paid by you.
  • Demand: 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 30 days.

[ Read: Types of Notices ]

Time Limit for Issue of Notice u/s 143(1)

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.

[ Read: Notice of Adjustment u/s 143(1)(a) ]

Consequences of not responding to order u/s 143(1)

  • As discussed earlier, you need to respond only if there is a refund or demand of tax.
  • If you do not respond to this notice, it may delay your tax refund or tax department may send you a notice of demand u/s 156 and may also initiate recovery proceeding after 30 days if any additional taxes is payable by you.

Section 143(1) of income tax act

How is Preliminary Assessment conducted?

  • After you have filed your tax return, the Central Processing Centre of the Income Tax Department conducts a preliminary assessment of your return.
  • The process is completely automated and the notice under Section 143(1) is computer-generated. At CPC, the data you provide in your tax return is verified with the Income Tax Department’s own record.
  • Based on the outcome of assessment, the intimation notice can be of three types as explained below.

What is Notice under section 143(1)(a) of Income Tax?

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.

In the AY 2017-18, several taxpayers have received this notice. A number of taxpayers who had filed their returns for AY 2017-18 had received emails from the Central Processing Centre (CPC) seeking clarification under Section 143(1)(a) of the I-T Act for 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.

Various Reasons for Receiving Notice under section 143(1)(a)

Let’s look at some of the most common reason why tax payers are getting this notice

Example 1: 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 –

adjustments u/s 143(1)(a)
The mismatch is due to an extra deduction of Rs.1,01,000 that’s not in the Form 16.

 

Example-2:

u/s 143(1)(a)

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.

 

Example-3:

adjustments u/s 143(1)(a) of income tax act
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.

[ Read: Reasons for receiving other tax notices ]

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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.

Procedure for Responding to CPC against Proposed Adjustment u/s 143(1)(a) of the Income Tax Act,1961

  • Log in to the Income Tax Department website (1)
    adjustment u/s 143(1)(a) - step 1
  • Go to “E-Proceeding” Tab and choose “E-Assessment/Proceeding

    section 143(1)(a) of income tax step 2

 

  • Click on “Prima Facie Adjustment u/s 143(1)(a)”

    Prima Facie adjustment u/s 143(1)(a)

 

  • Now you can click on “Reference ID” link to see the notice received to you on mail.

    reference id step 4

 

  • If you want to directly submit the response, click on “Submit”.

    click submit button for e-adjustment

 

  • Now you can see a list of all the mismatches which were mentioned in your intimation notice received on email.

    e-assessment reasons

 

  • 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.
  1. Fill in the details as mentioned below: TAN of the employer (available in the Form 16)
  2. Deduction made under section: Enter 192 if you have made a deduction against salary income
  3. Amount paid/credited by deductor: Check your Form 16 Part A for this number
  4. Nature of Receipt as per deductor: Salary (If income earned is from salary)
  5. Income/Gross Receipt as per return: Enter the income after taking the deduction into account.
  6. Head of Income/Schedule under which reported in the return: 1 (accepts only numeric value)
  7. 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”
  8. 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.)

  •  Click on “Submit”. Once you submit your response, you will see an acknowledgement screen.

adjustment reasons

How H&R Block can help you?

Receiving a scrutiny notice is never a pleasant experience and failure to respond to it correctly can result in further proceedings or penalties.  To ensure any notices you receive are handled with care and attention to detail, consult your personal tax experts at H&R Block India to get instant tax notice assistance.

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CA Shreya Oturkar
Shreya is a tax advisor at H&R Block (India) with intensive experience in SME taxation and audit. She holds an advanced post graduate qualification in accounting and is highly skilled in financial analysis and reporting. Apart from her professional achievements, Shreya is a talented artist with a flair for free-hand sketching!

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