INCOME TAX NOTICE
Income Tax Notice- The Income Tax Department has notified various ITR forms for different Taxpayers who are based on the source of income of different taxpayers. This is to create a simple tax structure in our country. Based on the source of income, a taxpayer chooses ITR form and file his/her return. The return is required to be filed every year subsequent to the year of income. Now the details of PAN and Aadhaar card is mandatorily required to be furnished with the department while filing the ITR return. There are various forms like ITR 1, ITR 2, ITR 3, ITR 4, ITR 5, ITR 6 and ITR 7 which is required to be filed by the different taxpayer. However, it is to be noted that it is not mandatory to file the return by all taxpayers, this is only the certain individual having threshold income more than as prescribed under the Income Tax Act who are required to submit the Income-tax return.
The return must be filed before the due date in order to avoid late fees and penalties. Further, aforesaid forms are designed for different taxpayers and it shall be processed by the Income-tax department accordingly. Once the Assesses or the Taxpayer files his/her Income Tax return, the same then processed by the department on their own in accordance with the Income Tax Act, 1961 and in case discrepancy arises or noticed by the department the same shall be intimated to Assesses through an Income Tax Notice. Various Income Tax notices are being defined under the Income Tax Act 1961. All the notices as may be issued under the Act by the Income-tax department are as follows:
Notice under Section 142(1) of the Income Tax Act, 1961
If Assessee has not furnished the return of income within the prescribed under Section 139(1), then Assessing Officer may issue a notice requiring him to furnish the Return of Income within the specified in the notice under section 142(1)(i) of Income Tax Act 1961.
The aforesaid notice may be issued even after the end of the Assessment Year. The Concerned Assessing Officer may issue a notice under Section 142(1)(i) for required books of accounts of Assessee for a maximum period of 3 years. Notice of this Section may be issued whether the Assessee has filed Return of Income or not.
Objectives of the Notice:
The following are the objectives of serving a notice under Section 142(1) by the Assessing Officer:
- To furnish requisite return of income with respect to which an individual is assessable, where they have not filed their return of income within the reasonable time allowed (which may include return in regard to their own income or income of another individual for which they are liable to be assessable), for example, in the case of a legal guardian or deceased person.
- To produce documents or accounts which the Assessing Officer may require to make an accurate assessment.
- To furnish information in writing on matters including the Assessee statements, for instance, an account of their assets and liabilities for a particular date.
Note: A penalty of Rs. 10,000/- can be levied for each such failure.
Income-tax Intimation under Section 143(1) of Income Tax Act 1961
Under Section 143 (1) (a) Income Tax Department issue) an intimation order to Assessee against an income tax return filed by him for an assessment year. It contains following information:
- Details of Assessee like Name and Address;
- Details of Acknowledgement number or filing date and others
- Number of Refunds order
- Calculation of Tax as provided in the Return of Income
- Tax as Computed under section 143(1)
Preliminary Assessment under Section 143(1) of Income Tax Act 1961
The process of Preliminary Assessment of Income Tax returns has already been made completely computerized by the Income Tax Department. Once the return is being filed a computerized acknowledgment is generated and automatically sent to the registered email of the Taxpayer and in case of any discrepancy in return the system will itself intimate the taxpayer about such error or any discrepancy.
Notice of Scrutiny Assessment under Section 143(2) of Income Tax Act 1961
Notice shall be served within 6 months from the end of the financial year in which Return of Income is filed.
The notice under Section 143(2) need not be necessarily issued by the jurisdictional Assessing Officer. As per the Finance Act, 2016 the prescribed income tax authority can issue the notice under Section 143(2) in electronic form. Notice can be signed by the prescribed Authority. Prescribed Authority is ITO and above officers designated by CBDT to issue the notice centrally.
As per Finance Act, 2016 the “hearing” in assessment/reassessment proceeding can be through communications of data and documents through electronic mode. If Return of Income is not filed under 143(2) cannot be issued and consequently assessment under 143(3) is not possible.
Scrutiny Assessment under Section 143(3) of Income Tax Act 1961
Notice of Scrutiny Assessment under Section 143(3) of the Income Tax Act 1961 where Income Tax Department is under observation that the income furnished is not correct and the information about the income has been concealed by the Assessee. It is to be noted that the Income tax notice under this section is to be issued by the Income Tax Department within a period of 6 months of the relevant assessment year to which the tax return relates. The same is to be replied within the time as provided under the Income Tax Notice as issued under this provision. One has to submit the response within the stipulated otherwise it shall deemed to be invalid
Notice for Defective Return under Section 139(9) of Income Tax Act 1961
An Income tax return filed by the Assessee is said to be defective if any of the following conditions is not satisfied:
- Annexures, statement and columns in the return are duly filed in
- Proof of TDS, Advance Tax or self-assessment is attached
- Statement of computation of income is attached
- Audit report is attached
- Profit & loss account or income or expenditure account and Balance Sheet etc
NOTE: If the Assessing Officer considers that return is defective, he may intimate the defect within 15 days. If not rectified within the time allowed, it is treated as invalid return.
A defective or incomplete return filed 139(9) cannot be revised. However, the defect can be removed.
Assessment or Re-assessment Notice under Section 148 of Income Tax Act 1961
A notice under Section 148 is issued if the Income Tax Department is of the view that the Assessee has escaped his income. Here the notice is being issued where the proper officer will ask the Assessee to send the Income tax return filed by him with proper explanations, the proper return is to be filed within the time as may be specified under the Income tax notice. The Income Tax Department can also specify the format in which the information is to be provided. The notice issued by an income tax officer shall specify the reason of issuance of the notice. The Assessee must proper explanation alongwith all details in order to avoid any legal action which may be taken by an officer in accordance with the power as provided under the Income Tax Act 1961.
Section 149(1): Time limit for issue of Notice under Section 148 of Income Tax Act 1961
|If the escaped income is less than 1,00,000||Up to 4 years from the end of the relevant assessment year|
|If the escaped income is more than or equal to 1,00,000||Beyond 4 years but up to 6 years end of the assessment year|
|Person has any asset located outside India||4 year but no more than 16 years.|
Notice of Demand under Section 156 of Income Tax Act 1961
Under Section 156 of Income Tax Act 1961, the return as filed by the Assessee is being checked Income Tax Department that whether the income declaraed and tax paid by the Assessee is in accordance with the Income Tax Act 1961. The intimation shall be sent to the Assessee in case the Income Tax Department is of the vide that the Tax paid by the Assessee is incorrect or not in accordance with the Income Tax Act 1961.
Intimation to set off Demand and Refunds under Section 245 of Income Tax Act 1961
The notice under this section is being issued in cases where the proper officer of Income Tax Department is of the view that there is any demand of tax is being outstanding against the Assessee in previous years. Under Section 245, the adjustment of refund and demand can be made only after a proper notice is given to the taxpayer and an opportunity will be given to the Assessee to correct any mistake which might have occurred in the raising or adjusting of the demand.
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