To respond to a tax notice, you need to first understand the type of notice you have received and the reason for it. Once you understand the notice, you can start to prepare your response.
Here are some general tips for responding to a tax notice:
Notice u/s 143(1) – Intimation | This is one of the most received income tax notices. The income tax department sends this notice seeking a response to the errors/ incorrect claims/ conflicts in ITR that were filed. If a specific person wants to revise the return after receiving this notice, it must be done generally within 15 days. Otherwise, the tax return will be processed after making the necessary adjustments mentioned in the 143(1)-tax notice. |
Notice u/s 142(1) – Inquiry | This notice is addressed to the assesses when the return is already filed, and supplementary details and documents are required from the assesses to complete the process. This notice can also be sent to demand a taxpayer to provide extra documents and information. |
Notice u/s 139(1) – Defective Return | An income tax notice under Section 139(1) would be followed if the ITR filed does not contain all required data or improper information. If a tax notice under Section 139(1) is issued, you should resolve the fault in the return within 15 days. |
Notice u/s 143(2) – Scrutiny | An income tax notice under Section 143(2) is followed if the tax officer remains not satisfied with the files and report that was submitted by the taxpayer. Taxpayers who get notice under Section 142(2) have been selected for specified scrutiny by the Income Tax department and will have to submit additional information. |
Notice u/s 156 – Demand Notice | This type of income tax notice is followed by the Income Tax Department when any tax, interest, penalty, or any other sum is owed by the taxpayer. All mandate tax notices will require the sum which is due and outstanding from the taxpayer. |
Notice Under Section 245 | If the officer has a purpose to believe that tax has not been paid for the previous years and he wants to establish the current year’s refund against that demand, a notice under Section 245 can be issued. However, the adjustment of demand and refund could be done only if the individual has been provided proper notice and an opportunity to be heard. The recipient must respond to the notice 21 / 30 days from the day of receipt of the notice. If the individual does not respond within the specified timeline, the assessing officer can consider this as consent and proceed with the judgment. Therefore, it is advisable to respond to the notice at the earliest. |
Notice Under Section 148 | The officer may have reason to believe that you have not released your income correctly and therefore, you have paid lower taxes. Or the individual may not have filed his return at all, even if you must have filed it as per law. This is called an income escaping assessment. Under these situations, the assessing officer is permitted to assess or reassess the income, according to the case. Before making such a valuation or re-evaluation, the assessing officer should serve a notice to the assessed asking him to furnish his return of income. The notice issued for this purpose is issued under the provisions of Section 148. |
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