Notice - People will get surprised or rather gets scared once they hear the word notice or receive the notice irrespective of the source.
Same way, Income Tax Notice is one such notice where taxpayer gets surprised without understanding the type of Income Tax Notice and reasons for the same.
Below are the list of common types of notices issued by the Income Tax Department:-
1. Section 139(9) - Defective Income Tax Return
In this case, the Assessing Officer (AO) is of the opinion that ITR filed by the assessee is defective. AO also shares the proper error description along with the probable solution to rectify the same. The defect u/s 139(9) can be because of the wrong ITR filed, wrong or non declaration of Income as per Form 26AS, missing information, incomplete return etc.
The Assessee is given an opportunity to respond within 15 days from the date of intimation and if he don't respond within stipulated time, the AO will consider the return invalid and proceed for assessment.
Assessee may agree or disagree with the observation of the AO. If you can agree, you can file a return after rectifying the defect in the return.
2. Section 142(1) - Inquiry before Assessment
The Assessee will get a notice a preliminary enquiry in case the return is not filed on time. Alternatively, if the AO would like to go through the documentary proof to verify your claim in Income Tax Return the he may ask you to furnish the documents for assessment purpose. The time limit to serve the notice u/s 142(1) is before the end of the relevant assessment year.
3. Section 143(2) - Follow up to the notice u/s 142(1)
If the AO is not satisfied with the response of the assessee or assessee fail to provide the documents against Income Tax Notice u/s 142(1) as explained, then assessee will receive notice u/s 143(2).
There are two types of scrutiny notices namely, namely Limited Scrutiny and Detailed Scrutiny Notices. The AO will upload the notice in the Income Tax Portal and the assessee either by himself or through a authorized representative can file the reply. Physical submission of the reply by visiting to the Assessing Officer has been done away and it will be E-Assessment Only.
4. Section 148 - Income Escaped Assessment
Even after assessment, if the AO is of the opinion that some Income of the assessee escaped assessment then Income Tax notice u/s 148 can be issued. An assessee may be asked to file the Income Tax return for the relevant assessment, reassessment or re-computation.
The notice can be served within 4 years / 6 years / 16 years from the end of the relevant assessment year.
5. Section 156 - Notice of Demand
If any penalty, tax, fine or any other amount is due from the taxpayer to the Income Tax Department then Income Tax notice u/s 156 is served. Normally this notice is served after the assessment of ITR. The taxpayer can deposit the amount payable within 30 days from the date of the Income Tax notice. There is no time limit to serve this notice. Income tax notice u/s 143(1) and 200A are also referred as Notice of Demand.
6. Section 245 - Refund Adjusted against the Tax Demand
It is basically an Intimation from the Income Tax Department. This notice is issued when the tax refund (full/partial) for an assessment year is adjusted against the tax demand due from the taxpayer.
The assessment year of refund and tax demand can be different. There is no time limit to serve or send Income Tax Notice / Intimation u/s 245.
7. Section 131(1A) - Income is concealed or likely to be concealed
If the AO is of the opinion that the assessee is concealing the Income or likely to conceal Income then you will receive Income Tax notice u/s 131(1A). This notice is basically an intimation that AO is initiating an enquiry or investigate into the matter.
The assessing office can impound the books of account or other documents by providing reasons for the same. There is no specific time limit to serve this notice.
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