Income Tax Notice Replies
An income tax notice under Section 143(2) is issued if the tax officer was not satisfied with the documents and information that was submitted by the taxpayer. This type of income tax notice is issued by the Income Tax Department when any tax, interest, fine, or any other sum is owed by the taxpayer.
Through this notice, the taxpayer is required to respond to the questionnaire issued along with the documents required by the income tax department. The assessing officer is supposed to service this notice within 6 months after the completion of the assessment year to which it pertains.
Types of Income Tax Notice
Notice under Section 156
Reason: It is issued by the Assessing Officer (AO) against the outstanding amount, interest, penalty, etc.
Steps to be Taken: The assessee has to deposit the amount within 30 days after receiving the notice. However, in special cases, the time limit can be reduced to less than 30 days.
Notices under Section 145(1)
Reason: Notice under this section is a traditional practice by the IT department, it states that ITR has been successfully processed. This can be sent by the IT department from the end of the financial year to the end of the year in which return has been filed.
Steps to be Taken: No response required from the assessee unless he has made any mistake in the ITR. If there is any outstanding amount or missing information, that should be corrected immediately to avoid any penalty.
Notice under Section 245
Reason: Primarily an intimation that department is adjusting assessee’s previous year tax payables with the current year’s refund. No time limit for issuance of notice under this section.
Steps to be Taken: Assessee has to reply according to the notice within 30 days. If he fails to respond within the stipulated time, the adjustments will be made automatically.
Notices under Section 142(1) & 143 (2)
Reason: Notice u/s 142(1) issued by the IT department only when AO needs some kind of verification, clarification and reassessment. Notice u/s 143(2) issued when AO is not satisfied with assessee response for notice u/s 142(1).
Steps to be Taken: For 142(1), assessee has to reply within stipulated time and for 143(2) he may need to be present before AO personally or through a representative.
Notice under Section 148 - Show cause notice
Reason: When AO feels that assessee has not disclosed all sources of income with the intention to evade taxes.
If amount withheld is less than Rs 1 lakh, notice issued within four years from the end of the assessment year. If amount withheld is greater than Rs 1 lakh or related to property situated outside India, notice under Section 148 can be issued within six years.
Steps to be Taken: The assessee is required to produce the details of information within the time limit specified by the AO.