Article Brief
Understand the different types of income-tax notices, their implications, and how to respond effectively to ensure compliance and avoid penalties.
Income-tax notices are issued by authorities under the Income-tax Act to ensure compliance. These notices can be issued at various stages: pre-assessment, during assessment, and post-assessment. Understanding the key types of notices, their purposes, issuance timing, prescribed time limits, and consequences of non-compliance is crucial for taxpayers.
Key Notices under the Income-tax Act
Notice u/s 142(1)
- Purpose: For making an assessment.
- When Issued: The return under Section 139 is due but not filed or after the return is filed, if the same is taken under scrutiny.
- Time Limit:
- After the due date of filing the return, if the return is not filed,.
- for getting information- during the assessment or reassessment proceedings
Notice u/s 143(1) for prima-facie adjustment
- Purpose: To process the return filed under section 139 or in response to a notice under section 142(1).
- When Issued: After the return is filed.
- Time Limit: Before the return is processed
Notice u/s 143(2)
- Purpose: To ensure the taxpayer has not understated income or claimed excessive losses or deductions.
- When Issued: After a return is filed.
- Time Limit: Within three months from the end of the financial year in which the return is furnished.
Notice u/s 144
- Purpose: To make a best judgment assessment.
- When Issued: When the taxpayer fails to file a return, comply with a notice under section 142(1), or section 143(2).
- Time Limit: Before the timeline prescribed for the completion of the assessment.
Notice u/s 144B
- Purpose: To conduct faceless assessments.
- When Issued: For cases selected for faceless assessment.
- Time Limit: After the return is selected for scrutiny,.
Notice u/s 148
- Purpose: To reassess or recompute income or loss
- When Issued: Before making a reassessment under Section 147.
- Time Limit: Within three years from the end of the relevant assessment year; up to ten years if the escaped income exceeds INR 50 lakh.
Notice u/s 154
- Purpose: To rectify any mistake apparent from the record.
- When Issued: Upon identifying an apparent mistake in the record.
- Time Limit: Within four years from the end of the financial year in which the order sought to be amended was passed.
Notice u/s 156
- Purpose: To demand payment of tax, interest, penalty, fine, or any other sum payable.
- When Issued: After any order resulting in a payable sum is passed.
- Time Limit- with the date of the order resulting in tax demand.
Notice u/s 133(6)
- Purpose: To require any person or entity to furnish information or documents.
- When Issued: During an inquiry or proceeding under the Act.
Conclusion:
Income-tax notices serve various purposes, from gathering information to ensuring compliance and reassessing escaped income. Understanding the implications of these notices, the prescribed timelines, and the consequences of non-compliance is essential for taxpayers to avoid additional liabilities and penalties. Click here to book your FREE tax assessment call
Disclaimer:
The article is only for educational purposes and is not to be construed as tax advice. The relevant provisions of the Income-tax Act may be referred to, for complete understanding.
