Right from our school days, we had a notice board on which our every notice was displayed, be it regarding our class sections, exams, cultural day activities etc. Being a school kid, every notice was being read carefully and on the very same day. As we moved to the college, the eagerness of receiving a notice reduced. The notice was being read two-three days later. Further, during graduation, the notices were read may be on the last day. Graduation gives you a job, and the salary that you earn from the job is taxable. Any discrepancies in tax filing earn you a notice in return. So now according to the trend, this notice needs to be neglected, shouldn’t it? No! You shouldn’t. This notice is probably the one which requires the utmost attention of yours if you do not want to land in trouble.
You may receive any one of the following notices if there is any point of disparity in your Income Tax return filings.
Notice under Section 142(1) is usually sent to call the documents and details from the tax payers and to take a particular case under assessment. This notice can be sent to payer before or after assessment of his tax return.
By serving a notice under section 142(1), your AO may ask you to
[ Read: Understanding Notice u/s 142(1) ]
Notice u/s 143(1) is simply an intimation in response to the tax return filed by you, which will do one of the following
|Tax Payer||Assessing Officer||Status||Action|
|File Return||Assessment||Match||No action|
|Return Filed > Actual Tax payable||Refund|
|Return Filed < Actual Tax payable||Payment within 30 days of receiving demand.|
If mismatches, such as deductions claimed u/s 80C or income difference under the head ‘Income from other sources’, form 26AS used as a form for comparison of data are found in your returns and Form 16, then this computer-assisted notice under section 143(1)(a) will be sent for clarification for the same. You will need to respond to this notice within 30 days by logging onto the income tax portal and uploading the proof needed to correct the mismatch.
[ Read: Notice u/s 143(1) and u/s 143(1)(a) ]
The notices under this section can be any of the following three, the last two of which are computer-assisted:
Upon receiving this notice, you will be called for a hearing to respond to the notice. Before appearing, collect all your respective year’s return filing copy and other relevant documents on which the specific query is raised and based on the clarification given by you at the hearing, one of the following will be the results:
[ Read: Responding to Notice u/s 143(2) ]
IT Department has the power to scrutinise your tax return within 6 months from the end of the financial year in which it is filed. Notice under section 147 is a regular scrutiny assessment, and your case may get selected for this type of scrutiny based on certain pre-defined criteria. This notice does not necessarily mean that tax department believes that you have done something wrong.
You will receive notice under section 148 if you have neglected to mention an income source or calculation. If the amount highlighted is more than Rs 1 lakh, then the notice can be sent anytime within a six-year time frame and if it is less than Rs 1 lakh, then the notice can be sent anytime within four years from the end of the assessment year. So, if you are the recipient of this notice, you must ensure you file your return within the time limit specified by the assessing officer(AO).
[ Read: Understanding Notice u/s 147 and 148 ]
If there is any mistake in any order passed by the Assessing Officer, it can be rectified under section 154.
To rectify any mistake apparent from the record, an income-tax authority
This is the notice of demand issued by the Income Tax Department when any tax, interest, penalty, fine or any other sum is payable in consequence of any order passed. The notice specifies the sum which is payable against the respective consequence.
This demand notice is accompanied by an intimation notice under section 143(1) or along with the assessment order that is issued on completion of the scrutiny proceedings. Notice of Demand u/s 156 is issued in respect of every assessment order for addition to income.
Applicable to salaried individuals who were not diligent in filing their returns on time by July 31st of the assessment year. For the assessment year 2018-19, if filed from 1st August to 31st December, a fine of Rs 5,000 will be levied. If it is filed after December 31st, the individual can be fined up to Rs 10,000. Additionally, for individuals whose income is below Rs 5 lakh, they can face a penalty of Rs 1,000.
The notice served by the income tax department to the tax payer, on whom there’s an outstanding demand from earlier years and a refund is claimed in another assessment year. In such a case as per section 245, the Assessing Officer can use the refund against the tax demand which is outstanding from the taxpayer.
In simpler words, Intimation under section 245 is received when a tax demand is pending from the IT Department; and the taxpayer may have claimed a refund from IT Department in some other Assessment Year.
Under Section 245, the adjustment of refund and demand can be made only after informing to the assessee after giving an opportunity to him to correct any mistake which might have occurred in raising or adjusting of the demand.
If you have received any one of the notices and are worried about how to respond to it, get in touch with our highly qualified tax experts at H&R Block who will help you resolve the issues you face.