Notices That Can be Issued Under The Income Tax Act, 1961

Section 143(1): Intimation

When you filed your income tax return, it will get processed electronically by the central processing center (CPC). If there is any or all of the following discrepancies were noticed then an intimation under section 143(a) shall be issued which will be stated the proposed adjustment in your return:

• Any arithmetical error in the return;
• An incorrect claim, if such incorrect claim is apparent from any information in the return;
• Disallowance of loss claimed, if the return of the previous year for which set off of loss is claimed was furnished beyond the due date specified under section 139(1);
• Disallowance of expenditure indicated in the audit report but not taken in computing the total income in the return;
• Disallowance of deduction claimed under section 10AA, 80IA, 80IAB, 80IB, 80IC, 80ID or section 80IE, if the return is furnished beyond the due date specified under section 139(1)

In simple words, if any of the above-specified transaction has occurred in your return, then the adjustment shall be made in the intimation under section 143(1).

If you have not responded on such proposed adjustment mentioned in the intimation specified under section 143(1) within 30 days of service of such intimation, then such adjustment shall be made in your return and such intimation shall be deemed as notice of demand.

Section 143(2): Notice for scrutiny Assessment

If there is no adjustment has been made in the intimation under section 143(1), then to ensure that you did not:

• Understated the income
• Claimed excessive loss or
• Underpaid the taxes

Your assessing officer shall issue the notice under section 143(2) for scrutiny assessment. This assessment can be made only when you have filed your return. Under this notice, the assessing officer has issued a questionnaire that will be related to your accounts and on the basis of this, he finalized your assessment. 

Note: The time period for the issue of notice is 6 months from the end of the financial year in which the return has been filed.

Section 148: Income escaping Assessment

Where assessing officer has a reason to believe that the person has the income which he did not show in your return i.e. he has an escaped income, then his assessing officer shall issue the notice under section 148 for the assessment under section 147 as income escaping assessment.

Practically, notice under section 148 requires the person to file the return again within a period of 6 months from the date of notice or the period as mentioned in the notice, as the case may be. The assessee shall have to disclose all of his income in the return form which the notice under section 148 has been issued. 

If during the proceedings, assessing officer found any other escaped income for the same assessment year then he shall not need to issue again notice under this section. However, if it relates to any other assessment year then he shall issue a fresh notice under section 148.

Section 142(1)(ii): Details of accounts

For the purpose of issuing the notice under section 148, the assessing officer may send the assessee one more notice under section 142(1)(ii) in which he requires the details of the accounts. He can ask for the details of maximum for 3 financial years prior to the previous year. The notice can be issued irrespective of the fact whether the assessee has filed his return of income or not.

Section 142(1)(1): Filing of return of Income

Where the person has not filed his return of income within the due date as specified under section 139 of the income tax act, 1961, then at any time after the due date, the assessing officer may send the notice to the assessee and ask for the filing of return within the period as specified in the notice. Although, the due date for the filing of return is 31st July or 30th September of the assessment year, as the case may be. However, the assessee can still file his belated return within the period of the last date of the assessment year i.e. 31st March and after that, he cannot except where the notice under section 142(10(i) has been issued.

In simple words, even after the last date for which the return can be filed, the assessing officer may send the notice under this section and requires the assessee to file the income tax return.

So, if you did not file the return till 31st March of the assessment year then you may request your assessing officer to issue the notice under this section so that you can file the return.

Section 245: Adjustment of a refund with your demand

If the person has filed his return of income claiming the refund and he has also pending the outstanding demand related to any previous financial years then the assessing officer may send the notice to such person and inform him to pay the outstanding amount of demand otherwise the claimed amount of refund shall be adjusted with this demand.

139(9): Notice for Defective Return 

The assess has filed the return of income as per the provisions of income tax act, 1961 but such return has not been accompanied with the documents as specified in this section, then the assessing officer shall issue the notice under section 139(9) and requires him to rectify the defect within the period of 15 days from the date of issue of such notice. You may refer to our previous articles in which we have explained in detail the documents required to be accompanied by the return of income.

If he has not rectified the return then the original return filed by him shall be considered as invalid. That means, it shall be deemed that the assessee has not even filed his return of income.