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Important Notices under Section 143

What would be your first reaction, if you receive a tax notice from the Income Tax Department? You might get worried about it and wonder, why did you receive a tax notice after filing the Income Tax Return in the correct manner. Well, don’t get worked up, as we will tell you all about tax notices that a taxpayer receives under section 143 and how to respond to these notices.

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Intimation under Section 143(1)

Once the Income Tax Return is filed by the taxpayer, it gets electronically processed by the Central Processing Centre or CPC. After the ITR is successfully processed by CPC an intimation under Section 143(1) is sent to the taxpayer under following circumstances: –

 

  • ·        If there is some tax liability, that is supposed to be paid by the taxpayer
  • ·        When a refund is determined
  • ·        When there is no refund or demand for it, but there is an increase or reduction in the amount of loss

Intimation Under Section 143(2)

The purpose of an intimation under this section is to notify the taxpayer, that the return filed by him/her is under scrutiny. A taxpayer must remember that the section under which the notice has been issued and the section under which the return will be scrutinised are different

.Notice under Section 143(2) is generally issued, under the following conditions: –

  • ·        If the taxpayer understated the income;
  • ·        If the assessee claimed excessive loss; or
  • ·        If the taxpayer paid less taxes than his/her tax liability

In case a taxpayer receives an intimation under the above-mentioned section, then he/she is required to respond to the questionnaire issued along with the documents provided to the Income Tax Department.

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