What is a demand notice received from the Income Tax Department??
Income tax department sends notices, demands on various reasons such as non-filing of IT return, Late filing of IT returns, Wrong filing of It return. The department sends notices either by post or by email or both. When a person files his/her IT return for the income earned by him/her, the department assesses the details filed by the assessee. If the officer finds any discrepancy in the figures, he sends a notice to the assessee seeking clarifications. The client is given a said period of time to submit a response to the officer.
In another case when the assessee files the return and the officer assesses the details and he feels the amounts reported in return are satisfactory, he sends a communication intimation to the client quoting that all the details reported by you are successfully processed.
Hence when a client gets any notice from the Income-tax department, there is nothing to be panic about. It may be just a communication reference or it may be towards some clarifications. we at chennaitaxconsultants.com have experienced experts to handle the notices and we will reply to the respective notices based on the requirements asked by the officer.
Here are the types of Notices/Demands that Income Tax Department sends to the clients.
- Intimation Notice U/s 143(1) : This is the commonly notice the department sends to every assessee after filing the IT return. In this notice, the department compares the reported figures on ITR along with figures computed by the department. The difference may be zero or there may be some difference which the officer arises based on his calculations. In refund cases, the officer agrees to pay more refund than the amount reported in ITR subject to if the computation of both client & ITO agrees. The excess amount is called interest that the department pays for the time delay between the return filed and officers computes. If the client gets a demand seeking payment of extra taxes, that means there are certain deductions/expenses which the client has claimed but it is not allowed under the income tax act. In that case, the client must file a revised return and submit the response to the department within the said time limit.
- Defective return Notice U/s 139(1) : When the assessee files an ITR which doesn’t contain the necessary or correct information, the officer treats it as a defective return and asks the client to file a proper revised return with correct information.
- Scrutiny Notice U/s 142(2) : When the Officer feels unsatisfied with the documents and information submitted by the taxpayer, the department serves notice U/s to a client to appear and produce necessary documents or information to the officer. The client may go personally to attend the scrutiny assessment or he can appoint an Authorised representative to appear on his behalf.
- Demand Notice U/s 156: The income tax department issues this notice when there is any outstanding tax liability, interest or fine due. The client is given a time period to pay the arrears or the client may appear and give clarifications if the demand is wrongly raised.
Hope this article gave you certain knowledge regarding income tax demands and notices. We at chennaitaxconsultants.com thank you for your valuable time for reading our blogs.