Areas of Expertise

• Notice under Section 142(1)
• Notice sent under Section 139(9)
• Notice under Section 148
• Notice sent under Section 156
• Notice under Section 245
• Notice under Section 271
• Notice under Section 143(2)

Section 142(1) of the Income Tax Act – When is the Notice Issued?

The Income Tax Department may issue a Section 142(1) notice in two situations:

• If you have filed your Income Tax Return: When the department needs more details or clarification to complete the assessment.
• If you have not filed your Income Tax Return: When you miss the filing deadline, the notice serves as a reminder to submit the required information in the specified format.

Notice under Section 139(9) – Defective Return

This notice is issued by the Income Tax Department when your filed Income Tax Return (ITR) is found to be defective — meaning it has errors, inconsistencies, or missing details that need correction.

Common reasons for receiving a notice under Section 139(9):

• Mismatched TDS Details: Differences between the TDS reported in your ITR and the Form 26AS (tax credit statement).
• Incomplete or Incorrect Information: Missing details or errors in income, deductions, or other key information.
• Late Filing: Filing your return after the due date without a valid reason.

Notice under Section 148 – Income Escaping Assessment

The Income Tax Department may issue a notice under Section 148 if they believe some income was not disclosed in your tax return — meaning the income has 'escaped assessment.'

Common reasons for receiving a Section 148 notice:

• Suspected Unreported Income: Based on solid evidence, not mere suspicion.
• Evidence Linked to Taxpayer: Proof must connect directly to possible tax evasion for a specific year.
• No Reliance on Existing Information: A notice can't be issued using details already submitted by the taxpayer.
• New Discrepancies Found: Fresh data or mismatches not disclosed earlier may trigger this notice.

Notice under Section 156 – Demand for Tax Payment

A Section 156 notice informs the taxpayer about outstanding tax dues, including the principal tax amount, interest, and penalties for non-compliance, late payment, or under-reporting of income.

Common reasons for receiving a Section 156 notice:

• Outstanding Tax Liability: Demand for unpaid tax as per the assessment order.
• Tax Due on Reassessment: Additional tax identified during reassessment.
• Tax Arrears: Demand for unpaid taxes from previous assessment years.
• Interest and Penalties: Includes applicable interest and penalties for delays or non-compliance.
• Adjustment of Refunds: Tax refunds may be adjusted against pending dues, with notice issued for this adjustment.
• Post-Assessment Demand: Formal intimation of the assessed tax liability and its due date after an assessment order.
• Recovery Proceedings Warning: Failure to pay within the given timeframe may lead to recovery actions like attachment of assets or bank accounts.

Refund Adjustment Notice (Section 245)

Also called a ‘Refund Adjustment Notice,’ this is issued when the Income Tax Department adjusts your refund against pending tax demands.

• Outstanding Tax Demands: Issued when you have unpaid taxes, interest, or penalties.
• Refund Adjustment: Your eligible tax refund is adjusted to settle these outstanding dues.

Penalty Notice (Section 270A/271/272)

This notice is issued when the Income Tax Department plans to impose penalties for non-compliance with tax laws.

• Non-compliances: Issued for offences like underreporting/concealing income, not maintaining proper books, or violating tax provisions.
• Penalties Levied: The department imposes penalties under the Income Tax Act to discourage such defaults and ensure compliance.

Scrutiny Assessment Notice (Section 143(2))

Issued after the initial processing of the tax return, this notice requires the taxpayer to appear for an assessment proceeding before the assessing officer as part of the scrutiny process.

• Scrutiny Assessment: Initiated to verify the accuracy and completeness of the filed return.
• Verification of Details: The assessing officer examines the return details and addresses any discrepancies.
• Ensuring Compliance: Aims to ensure proper tax compliance and prevent underreporting or evasion.

Latest Tax Updates

New Tax Regime:

• 1. Taxpayers can choose between the old and new tax regimes.
• 2. The new regime offers lower tax rates but limits deductions and exemptions.
• 3. The choice of regime must be made before filing the return.

Other Key Updates:

• 1. Form 10-IEA: Required to opt out of the new regime for businesses and professionals.
• 2. DTVSV Scheme 2024: Enables taxpayers to settle pending tax disputes.
• 3. PAN 2.0 Project: Aims to upgrade and modernize the PAN system.

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