Notices issued under the Income Tax Act- ‘A View towards its Genuine Status’

If the Income Tax Authority isn’t pleased with your ITR filing or has a question for you, the Income Tax Department may send you a notice, letter, or, in the most extreme circumstances, a summons. The Central Board of Direct Taxes now allows taxpayers to check the legality of all such letters, as any communication sent to an assessee without a Documentation Identification Number (DIN) is considered illegitimate (CBDT). Also, to promote accountability and transparency in the IT department’s operations, finance minister Nirmala Sitharaman has implemented a new rule that states that no communication with a taxpayer shall be done without a computer-generated DIN. We’ll go over these in more detail later in this article.

What is a notice under Income tax?

The Income Tax Agency issues notice for a variety of reasons, including failure in filing income tax returns, errors in filing returns, and other situations where the tax department requires further papers or information. Even if you have submitted your income tax returns before the due date, you may be shocked to get an intimation/notice from the IT department. Receiving a tax notice from the IT department isn’t always a bad thing. Calculation errors or omissions inaccurately reporting incomes might potentially result in a tax notice.

Difference between a Notice and Intimation under Income Tax Act

First and foremost, you must be aware of the distinction between intimation and a notice. Between the two, there is a razor-thin distinction. You may not urge to act on the notification because it highlights the outcome of the processing of your return or the conclusion of your assessment (although there are a few exceptions to it).

When you receive a notice, though, you must take action. The Central Board of Direct Taxes (CBDT) has announced the launch of a new program called the Centralized Communication Scheme (CCS). According to the plan, all communications will manage electronically over time.

Reasons for issuing of Income Tax Notice

To prevent receiving a Notice of Defective Return, file your Income Tax Return correctly. Tax notices might arrive for a variety of reasons. The following are some of the most prevalent causes for the issue of an Income Tax Notice:

How to check if income tax notice is true or false?

Before responding to any communication sent to you in the name of the income tax department, make sure the notification or order is real and issued by the income tax authorities. Follow these certain steps to check if the notice is fake or valid.

• Step-1- To begin, go to www.incometaxindiaefiling.gov.in, the Department’s official website.
• Step-2-Then go to the “Authenticate” tab under the “Quick Links” tab and select “Notice/order issue by ITD” from the drop-down menu.
• Step-3- When you select the ‘Notice / Order issued by ITD’ option, you will be taken to a new web page on your computer. There are two options there that will allow you to verify the validity of the notices/orders you have received. You can do so by using either the document number or the PAN assessment year, notice section, month, and year of issue, depending on your preference.
• Step-4-When you click on the document, you’ll get a document number option where you may fill in the document number.
• Step-5-If the user chooses the PAN option; they will be bring out to enter specific information, including their PAN number, assessment year, notice section, month of issuance, and year of issue. Accordingly, must fill out all of the relevant information.
• Step-6-Click ‘submit’ after entering a valid ‘captcha code’.

Types of the income tax notice

• Under section 139 (9): For a defective return, a 139(9) notice is sent. If an ITR return is lacking information, is filed on the incorrect ITR form, or the information is inconsistent with the data held by the IT department, it is considered defective. If taxpayers do not answer within 15 days, the ITR will be denied.

• Under section 143 (1): This is a warning notification. It is specified when the taxpayer pays too much tax and receives a refund, or when the taxpayer pays too little tax and the tax department informs the taxpayer of the tax liability.

• Under section 143 (a): When the income, exemptions, or deductions stated in ITR and TDS certificates of Form 16 and Form 16A or income statement Form 26AS do not match, an intimation notification is given.

• Under section 142 (1): When the assessing officer requests extra information from the taxpayer on the ITR, this notice is issued. It can also be provided if a taxpayer fails to file an ITR in a given assessment year, but the assessing officer has demanded that an ITR charge be based on preceding years. Failure to respond to a notice under Section 142(1) can result in a $10,000 fine or potential legal action.

• Under section 143(2): This is a formal order, not only a suggestion. When the IT discovers a mismatch in your ITR due to under-reporting of income or over-reporting of losses, it conducts an audit.

• Under section 148: Income Escaping Assessment is the name apt to this notice. The following is the reason for sending a notification under this section:When an evaluating officer determines that the income has not disclosed after the assessment. Before making any such assessment or reassessment, the assessing officer must first issue a notice to the assessee, requesting that he or she submit his or her income tax return.

• Under section 156: The Income-tax department delivers a demand notice to the taxpayer requesting payment of a penalty, fine, or tax. Within 30 days of receiving the order, you must pay the outstanding balance.

• Under section 245: The notice imposes against a group of refunds for taxes that are still pending. The Income Tax Notice (Section 245) is more of an intimation letter than a demand notice. This letter conveys information about the adjustment of an income tax refund against an income tax refund. Noncompliance with an Income Tax Notice might result in a penalty.

Conclusion

Subsequently, taxpayers should give proper attention to any income tax notice or intimation. On the other hand, one can also check the genuineness of the notice issued by the IT department. Taxpayers can examine whether the income tax notice they got is real or not on the new income tax portal. The income tax department hence launched a tool in October 2019 that allows people to check this.