TYPES OF INCOME TAX NOTCES
Section 142(1): Inquiry before assessment:
This notice is usually served to call upon documents and details from the tax payers. The basic purpose of this notice is to inquire the details of the assessee before making any assessment under the Act. The assessing officer ma ask for documents such as return of income (it may include both return in respect of his own income or other person he is liable to), any statement in writing by the asseessee.
Compliance with this notice u/s 142(1) is mandatory even if the tax payer is of the opinion that the accounts/documents requested are irrelevant.
If assessee does NOT comply with the provisions of this section:
- It may result in Best Judgement Assessment u/s 144, or
- Penalized under Sec 271(1)(b) i.e. Rs 10,000 for each failure, or
iii. Prosecution under Sec 276D which may extend up to 1 year and
with fine.
Section 139(9): Defective Income Tax Return
Following are the reasons for defective return:
- When details of taxes paid have been filled but details have not been
provided for the income disclosed.
- When tax deducted has been claimed as refund, but no income
details are provided in the return.
iii. When taxes are not paid in full.
- When balance sheet and profit & loss statements are required the maintain and arte not attached.
- The name mentioned on the income tax return does not match with
the name on the PAN card.
The asseessee is given 15 days from the date of receipt of intimation
order to respond to such notice. After 15 days AO rejects the return
filed.
Section 143(2): Scrutiny Notice:
This notice is issued when the AO is not satisfies with the documents
produced by the assessee. It is basically sent after notice u/s 142(1).
Notice u/s 143(2) cannot be issued and scrutiny assessment cannot be done if assessee has not furnished his return of income. In such cases Best Judgement is given u/s 144 by the AO
The notice might ask you to produce documents in support of deductions, exemptions, allowances, reliefs other claim of loss you have made and
provide proof of all sources of income
If assessee do NOT comply with the provisions of this section:
- It may result in Best Judgement Assessment u/s 144, or
- Penalized under Sec 271(1)(b) i.e. Rs10,000 for each failure, or
iii. Prosecution under Sec 276D which may extend up to 1 year and
with fine.
No notice under this sub-section shall be served on the assessee after the expiry of six months from the end of the financial year in which the return is furnished.
Section 143(1): Letter of Intimation:
Three types of notice can be sent u/s 143(1):
- Intimation where the notice is to be simply considered as final
assessment of your returns since the AO has found the return filed by v you to be matching with his computation under section 143(1).
- A refund notice, where the officer’s computation shows amount
excessively paid by the assessee.
iii. Demand Notice where the officer’s computation shows shortfall in
your tax payment. The notice will ask you to pay up the tax due
within 30days.
No intimation under this sub-section shall be sent after the expiry of one year from the end of the financial year in which the return is made.
Section 148: Income escaping assessment:
Notice u/s 148 is issued if AO has reasons to believe that any income
chargeable to tax has escaped assessments, he may assess or reassess such
income, which is chargeable to tax and has escaped assessment.
Section 156: Notice of Demand:
The notice of demand is received in the cases where assessment has been made in respect to assessee.
Where any tax, interest, penalty, fine or any other sum is payable in
consequence of any order passed, the AO shall serve upon the assessee a
notice of demand, specifying the sum do payable.
The amount demanded has to be paid by the assessee within 30 days afte the date of receipt of notice.
Penalty u/s 156 is:
- Interest u/s 220- Interest at the rate of 1% per month or part thereof
is payable after the expiry of the 30 days time provided under section
156 tax notice.
- Penalty u/s 221- A penalty u/s 221 may be imposed by the AO on the
assessee but it should not be more than the amount demanded in
the Demand Notice.
Section 245: Set off of refunds against tax remaining payable:
When a refund is found to be due to any person, The AO, may, in lieu of payment of the refund, set off the amount to be refunded or any part of that amount, against the sum, if any, payable under any provisions of thir Act.
Intimation in writing should be given to such person of the action to be taken under this section.
Under this notice, the AO intimates the effect of the adjustments made
with the amount due to assessee. It indicates the adjusted amount which can be either merely intimation or demand notice of lesser amount stil npayable after the adjustment.
If the person defaults in payment of the mount demanded u/s 245 of the Income Tax Act, interest levied will be 1% for every month for default in payment as per section 220(2).
-Juhi Ganantra
(Artical Assistant)
