When can you receive a notice from the Income Tax Department?

By now you would have probably received a notification email from your company HR or from your local income tax filing support firm reminding that it’s time to start collecting your documents for filing the income tax return for the current fiscal year. In this article we will discuss some notices that you can receive from the IT department. For starters let’s get familiar with the procedure followed by the IT department. First of all the details that you file regarding your income, investments and tax exemptions are verified by the income tax department with the details obtained as per your PAN records. The IT Department, after verification of the documents submitted, can send you a notice seeking clarification on the details provided if they suspect any discrepancy in the proofs submitted for tax evasion. These notices can be sent under various sections of the Income Tax Act, depending on the type of clarification required. Ignoring these notices may lead to paying of a fine apart from the interest on the tax amount due. You also have the provision to appeal against the notice if the demand for the payment is not correct as per your data. Let’s go through the sections under the Income Tax Act under which these notices can be sent. Notice under Section 131 (1A) The notice is sent when the assessing officer in the Income Tax Department suspects that you have concealed a part of your income while filing of IT returns. You may be asked to submit further documents to verify your income source and your investment details for the current financial year. Notice under Section 142 (1) Sometimes you may receive a notice under section 142 (1), stating that you have not filed your income tax returns within a given financial year. This is a scrutiny notice, on receiving this notice you will have to file the IT return within the specified time in the notice along with the interest under section 234A. Further the department can also ask for a penalty of Rs.5000. which would be different in every case. In case, you have already filed your IT returns within the stipulated time, simply produce the documents to support your claim in front of the assessing officer. Notice under Section 143 (1) A notice is sent to the taxpayer under section 143 (1) for two reasons (i) As an acknowledgement by the assessing officer that the return filed by you has been assessed and found matching with his computation of your tax or (ii) As an intimation of any calculation error observed while computing the tax. In this case the department dose a thorough check of the ITR filed by you, and sends a notice in case of any technical error in the ITR. For example: If an assesse claims excess deduction, over the specified limit. In the former scenario, there is nothing you have to do. However, in case of the latter, you have to remit the excess tax amount or file the application under section 154 for the rectification. The notice should not be ignored as non-payment of excess of tax amount may lead to a fine. The notices of the IT Department should not be ignored or taken lightly by the assessee, not responding to these notices can lead to penalties and litigation expenses at later stage. Courtesy for the article goes to Bank Bazaar. Thanks for reading for this article. Please feel free to write to us, We want to hear it all!Suggestions? Complaints? Feedback? Requests?  at [info@taxmantra.com] or call us at +91 88208208 11. We would be more than happy to assist you.