When you file the return under section 139, then to verify the correctness of the particulars mentioned in the income tax return, your assessing officer may issue income tax demand notice. Where the Income-tax department satisfies that return has been filed and taxes have been paid as per the provisions of the Act, rules, and regulation made thereunder, only then it will be accepted.
In cases, where the assessment has been finalized and it results that the assessee has not paid the taxes or short paid the taxes or wrongly claimed the refund then, the Assessing Officer shall issue assessment order along with the tax demand notice which is required to be paid within 30 days or the time prescribed in the notice as the case may be.
Although, in cases where assesse didn’t file his return then also, the assessing officer may assess his return as per their best of his judgment and accordingly calculate tax and send assessment order along with the tax demand notice.
In this article, we will discuss how the assessee shall deal with the income tax demand notice when he accepts the demand or partially accept the demand or disagree with the demand.
Procedure for Responding to Income-tax demand Notice
Step 1: Log in to your account with the ID and password at the website Incometaxindiaefiling
Step 2: Go to E-file and then click on Respond to the Outstanding Demand, Where you can see the following options:
- Assessment Year
- Section Code
- The date on which demand raised
- Demand Notification Number
- Outstanding demand amount
- Uploaded By
- Rectification Rights
- Response- Submit and view
Step 3: Go to the option Submit for the relevant Assessment year and where you have to click on any one of the following:
- Demand is Correct or
- Demand is partially correct
- Disagree with the demand
Now, in each of the above cases, a further separate process will have to be followed
Case1: Demand is Correct
Where the assessee click on the option demand is correct, one pop up will be shown which states that you are confirming that the demand is correct and after you cannot disagree with the demand.
Assess will have to click on the submit option
Then a success message will be shown on the screen
Where any refund has been due to the assessee relating to any previous years then the demand may be adjusted with such refund due or otherwise, the assessee will have to immediately make the payment of the demand.
Case2: Demand is partially correct
When the assessee clicks on this option, a screen will be displayed showing the 2 fields regarding the amount to be shown as the correct demand amount and incorrect demand amount.
Once, the assessee has entered the fields, he also has to explain the reason why the departments’ calculation of demand is partially correct.
Now, the reason, for departments calculation is partially correct, is any of the following:
Demand has already been paid: Where the demand has already been paid, then assessed has to entered the challan details in which the demand has been paid like BSR Code, Date of payment, the serial number of the challan and challan amount. The assessee may also enter other comments in the Remarks option.
Demand has been reduced by rectification or revision order: Where the demand has been reduced against the order passed in rectification or revision then the assessee will have to enter the date of passing of the order, demand amount, Details of the order, etc.
Demand has been reduced under any appeal although the appeal effect has yet to be given by the department: In this case, the assessee will have to attach the reference number of the order and date of order
The assessee has been filed a stay petition during any appeal: Assess will have to mention the date of filing of an appeal, on which authority, an appeal was pending, stay petition filing date, etc.
Rectification return under section 154 or the revision return under section 139(5) has been filed by the assessee: In such cases, the assessee shall have to enter the following:
- Specify under which section the assessee has filed the return
- E filing Acknowledgment Number
- Challan copy of the amount paid in this return
- TDS Certificate
Where the rectification has already been filed with the Assessing Officer: Where the assessee has already filed the return then mentioned the date of filing of rectified return and other comments etc.
Case3: Disagree with the demand
When the assessee chooses this option then he has to mention the reason why is he disagree with the calculation of the demand.
Once you mentioned the reason the click on the submit option.
As and when you click on the submit option, a screen will be displayed as success along with one transaction Id
If the assessee wants then he can again view his reply by click on the view option under Response Tab.
I hope this article will help you to respond to any income tax demand notice under the income tax act when you accept the demand or partially accepts the demand or disagree with the demand.