The Most Common Notice in the Income Tax Act – 1961

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The Most Common Notice in the Income Tax Act – 1961

Everything is getting online and in digital mode as far as compliance with the Income Tax Act – 1961 is concerned. Lot many taxpayers are receiving online notices. All such notices mentions the section in which it is issued. Here is a brief discussion about all such common notices received by the taxpayers and the action that is expected from the taxpayers in all such cases.

 

 

  1. Notice under Section 133(6):
    Income Tax Department have power to verify or cross verify various transactions & dealing. Notice u/s 133(6) is issued to the taxpayers by the department to seek information of other assessee. Income Taax Department cannot make random enquiry without due authorization. However, case specific enquiry can always be done by the Authorities. This is one of the most common notice for seeking third party information’s
  2. Notice under Section 156:
    One of the most common instance is notice u/s 156. It is issued by the jurisdictional Assessing Officer (AO) for the outstanding amount, interest, penalty etc of the taxpayers. Against such notice, assessee has to deposit the amount within 30 days after receiving the notice. In some special cases, the time limit can be reduced to even less than 30 days.
  3. Notice under Section 143(1):
    This is not a notice but an intimation of the fact that the assessee has filed the income tax return and the same is processed by the IT department. After every return filing, the intimation is issued by the CPC, Bengalurur. After the intimation is received, taxpaeys must compare the intimation received vis a vis ITR filed and note any discrepancies is there. If it is correctly processed then there is no need to do anything. However, if it is not processed correctly, taxpayers may file rectification application u/s 154 to make necessary corrections.
  4. Notice under Section 142(1) & 143(2):
    Section 142(1) are the sections which empowers IT Authorities to seek information for verification, clarification, assessment or reassessment. Notice u/s 143(2) is issued when AO is not satisfied with assessee response for notice u/s 142(1) and by issuing notice u/s 143(2), AO seeks further information/ Documents.  Whenever such notices are received, assessee must file the reply within stipulated time & make required representation & submission. Such notices are self explanatory and the details sought is also mentioned therein.
  5. Notice under Section 148 – show cause notice:
    This is a notice which is issued by the jurisdictional AO if they have information in their possession which leads to a belief that assessee has not disclosed income fully or has concealed their income. Technically, it is referred to as the income escaping assessment. It may be noted that if amount of such income is less anticipated at less than one lakh then notice can be issued within 4 years from the end of the relevant assessment year. However, If such amount escaping assessment is anticipated to be more than one lakh then or it is related to property situated outside India then notice can be issued within 6 years from the end of the relevant assessment year. If the assessee receive any such notice u/s 148 then the assessee is required to produce the details of information within the time limit specified by the AO and may be required to file the return of income in response to notice u/s 148. Assessee can seek the reason for issuance of notice u/s 148.
  6. Notice under Section 245:
    This is one of the most common notice now a days. It is issued s as to inform the assessee that department is adjusting earlier years year’s tax pliability of the taxpayers with the current year’s refund. There is no time limit for issuance of notice under this section. Asessees are given an opportunity before such adjustment. Assessee must reply to the notice within 30 days if they have objections to such adjustment. If there is no objections then assessee need not reply &, the adjustments will be done automatically by the department. Objection could be for the reason that the taxpayers have already paid the demand but the same is not adjusted by the department, the demand earlier was wrongly raised, etc.

 

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