What is income Tax Act 143(1)? Income Tax Notice and Response Process

All the people who have taxable income need to file an ITR in each financial year. Once the ITR has been filed, the IT Department will process the return and will check for any type of errors. In case the errors in the ITR are minute, then a summary assessment is completed without calling the assessee  under Section 143(1) of the Income Tax Act. Therefore, the most common type of tax notices  are the Income Tax Notices issued under Section 143(1) of the Income Tax Act. When a taxpayer receives an income tax notice, he needs to stay calm and go through the notice carefully. He should take adequate steps to understand the income tax notice and work according to the request made by the tax officer. In this blog, we will learn about income tax notices under Section 143(1) of the Income Tax Act.

Issuing of Income Tax Notice under Section 143(1) of the Income Tax Act

Under Section 143(1) of the Income Tax Act, an income tax notice can be issued in order to begin a summary assessment without having to call the assessee. Section 143(1) of the Income Tax Act issues notices based on the Computerised tax return processing without the need of a human interface. For a summary assessment, the assessee will not be called for additional documents or information that is required in a scrutiny assessment

Summary Assessment of Section 143(1) of the Income Tax Act

The tax notices under Section 143(1) of the Income Tax Act, can be issued in one of the following mentioned scenarios after verifying the filed ITR:

• When there is an arithmetic error in the ITR
• When an incorrect claim is made in the ITR
• When there is a disallowance of loss claimed, in case the ITR of the previous years which has set off of loss is filed after due date
• When there is a disallowance of expenditure that is depicted in the audit report but are not taken in account while computing the total income in the ITR
• When the disallowance of deductions occurs that are claimed under Sections 10AA, 80IA, 80IAB, 80IC, 80ID or 80 IE in case the ITR was submitted after the due date
• In case additional income appears in Form 26AS o Form 16A or Form 16 that is not included in calculating the total income in the ITR
• When there are more than one entries of the same name or return or when the Information that is provided is inconsistent
• In case a deduction is more than the statutory limit that has been specified

Response to a Tax Notice

It is possible that the assessee has to pay some additional tax after he has made adjustments that are mentioned above and after giving credit to the taxes and paying the interest. In this type of case, the assessee will be told to pay the due amount within 30 days. The tax can be refunded to the assessee after making necessary adjustments and giving credit to the taxes and paying the interests. There can be an increment or decrement in the loss that is declared by the taxpayer. Also, no tax or interest will be paid to the taxpayer and no refund of the interest will be made to the taxpayer.

Time Limit to Respond

An assessment under Section 143(1) of the Income Tax Act can be made under a period of one year from the ending of that financial year in which the ITR is filed. Therefore, an intimation of interest or tax that is due under Section 143(1) of the Income Tax Act can not be sent when the specified time has expired.

Process to Respond to a Tax Notice under Section 143(1) of the Income Tax Act

The assessee will receive a tax notice under Section 143(1) of the Income Tax Act. This tax notice will specify the sum that needs to be paid or the amount that will be refunded to the assessee. If there is no amount that needs to be paid or refunded, then the acknowledgement of the ITR will be deemed to the Intimation.

The taxpayer must remember that just because he received a tax notice from the IT department, he has to mandatorily appear before the tax authorities. In a lot of cases, it is sufficient enough if the taxpayer who receives the notice sends a response to the notice either in physical or electronic mode.

In case the assessee wishes to revise his ITR after he receives a tax notice under Section 143(1) of the Income Tax Act, then the assessee needs to be aware that the time limit for revising the ITR is 15 days from the date of receiving the notice. In case the assessee is unable to respond to the notice in an adequate manner and within the assigned time period, then the ITR will be processed automatically after making the essential adjustments which are mentioned in the Income tax notice:

In order to respond to the received tax notice under Section 143(1) of the Income Tax Act, the taxpayer should follow the steps that are listed below:

• Visit the official website of Income Tax Department E-filing Website and log in to your account
• Select the “E-Proceedings” tab and click on “E-Assessment/Proceedings”
• Click on Prima Facie Adjustment under Section 143(1) of the Income Tax Act
• The details of the received notice will appear on your screen. Click on “Submit” in order to start the process of submitting the response
•  Now, the list of all the mismatches that have been identified will appear. Click on the drop-down menu which is next  to Response in order to submit  a response to the mismatch identified
• If you have particular  information, then enter iit in the justification or remarks
• Then, submit supporting documents related to the amounts before you submit the response, if any
• Then, click on “Submit”. After submission of the response, an acknowledgement will be availed to you.

Conclusion

In this blog, we came to know in detail about Section 143(1) of the Income Tax Act. We also learnt about the income tax notices that are issued under Section 143(1) of the Income Tax Act and when and why they can be issued. It is also important to respond to the notices received calmly and adequately.