Once you have filed your tax return, the Income Tax Department (ITD) processes it and makes adjustments for any errors, incorrect claims or discrepancy in the documents furnished. Often people make a minute error or miss a detail while filing their ITR resulting in a notice from the ITD. But not all such notices are a cause of worry. We have decoded six important sections for your understanding.
1. Processing of return [Section 143 (1)]
Every tax return filed is processed for any incorrect claims or arithmetical errors, thereafter, an Intimation is generated by the Centralized Processing Centre (CPC).
You may receive such intimation in the following cases:
- Demand : Where any tax or interest is found payable by you. If the such demand is justifiably payable, you should make the payment within 30 days. However, If you think that the demand has been incorrectly raised, you need to get the demand corrected.
- Refund : Where any tax or interest is found refundable to you. Such refund will be transferred to the bank account. If it is not credited, you may request reissue of refund
- No demand or refund : Where your return calculation matches the ITD’s computationNo action is needed as this implies that the ITR has been processed without any discrepancies.
2. Defective return notice [Section 139(9)]
You may receive such notice if your return is considered to be defective by the Assessing Officer (AO) because of incomplete, inconsistent or incorrect information in the income tax return or the schedules. In response to notice under section 139(9) you have to e-file a revised return by logging into the Income tax efiling website. The defect should be rectified within 15 days of receipt, failure of which will lead to the return being considered invalid.
3. Inquiry notice under section 142(1)
Such a notice is received if your return has been taken up for assessment by the AO because of either of the following:
- You have not filed your ITR within the time allowed or before the end of the relevant Assessment Year (AY)
You have failed to furnish satisfactory accounts, information or documents in support of your return
4. Scrutiny Assessment notice [Section 143 (2)]
You may receive such notice if the AO wants to ensure that you have not understated your income, computed excessive loss or under-paid the tax. On receipt of such notice, you may be required to provide clarification by physically attending the office/ getting representation or producing evidence in support of the return.
5. Assessment / Reassessment notice [Section 148]
You may receive such notice if the AO has reason to believe that any income chargeable to tax has escaped assessment for any year and he wants to reassess the income or re-compute the loss, as the case maybe. On receipt of such notice, you will be required to file your return for the relevant AY (even though it has already been furnished earlier under section 139 or 142(1))
6. Set off notice [section 245]
You may receive such an intimation if the AO wants to set off the amount to be refunded to you against the tax payable by you. Note that this is received when a tax demand is pending from the ITD and you have claimed a refund from them in an earlier AY. On receipt of such notice, you have to respond to the Outstanding Tax Demand by logging into the Income tax efiling website.
Tanvi Loond is the founder of Insta C.A.
She is an experienced Chartered Accountant (ICAI) and has graduated from Delhi University with a degree in Commerce (Honours). Her prior experience includes positions at Deloitte & Touche and Ernst & Young. She has consulted across industries and is passionate about everything technology related. She makes written contributions to various business and financial journals.