All taxpayers in the taxable income category must submit their income tax returns each year. When the taxpayer has filed their tax returns, the income tax department processes the tax return and makes sure there are no mistakes. It's possible to file a summary assessment as per section 143 (1) of the Income Tax Act without calling the assessee in case of slight errors in the income tax return (ITR).
Additionally, the IT department sends an income tax notice or Letter of Intimation to an assessee as per section 143 of the Income Tax Act. If a taxpayer receives the notice, he or they may try to comprehend the notice regarding income tax and follow the directions the tax official provides. According to section 143 (1) in the Income Tax Act, let's look at an income tax notice.
Did you know?
From 1997 to 98, the income tax department collected total tax money worth ₹ 1,392.26 crores. In 2007–08 it rose to ₹5,889.09 crores, which was a tremendous increase, but the data for the upcoming years' was even more shocking.
Also Read: Everything You Need to Know About Surcharge on Income Tax
Section 143 (1) Of the Income Tax Act
The assessee may receive an intimation notice by the income tax department under section 143 (1) in the following situations:
- If the assessee paid an additional amount, the refund amount is included within the notification. It is important to note that the income tax department initiates refunds only if the amount is more than ₹100. If the refund amount is lower than that, no refund is possible.
- If the taxpayer cannot pay the amount, they may receive a letter of section 143 (1). The letter will include the exact amount payable and a copy of a challan.
- If the tax has been paid and accounted for by the assessor and the assessing officer, there is no notification. In such a case, the acknowledgement is sent in the form of an intimation notice.
Response to an Income Tax Notification in Section 143 (1)
When you receive the notice, you must confirm that the letter is about your return. Also, check whether the information is relevant to your financial year.
After you've confirmed that the information is relevant to you and your most recent return, try to spot any errors within your return. The errors can be corrected by filing a revised tax return and logging on to the official tax website to file it.
However, you may request online corrections in section 154 (1) if you aren't satisfied with the suggestions made to you by computer systems.
Time Limit
Taxpayers can receive the tax due under section 143 (1) notification within a year after the close of the fiscal year in which they submitted an income tax return. For instance, if a taxpayer submitted returns for 2020-21, he should receive a notification on or before March 31st 2022.
What if the assessee doesn't receive a notification before the deadline expires? This means that there are no adjustments for the taxpayer to make.
The tax notice 143 (1) is sent to the assessee stating the amount due and the total amount refund payable to the taxpayer. If there isn't an amount payable or refundable, the acknowledgement of the tax return is considered to be an intimation. The taxpayer must be aware that just because he received a notice from the income tax division, that doesn't suggest that it is a requirement that the taxpayer shows up before authorities in person. It is sufficient for the notice recipient to respond to it either in electronic or physical mode.
Suppose the taxpayer wishes to amend the income tax return after receiving a section 143 (1) income tax note. In that case, The taxpayer must be aware that the deadline to revise the return is 15 days after receiving the notice. If the taxpayer does not respond within that timeframe to the income tax notice under section 143(1). The revenue tax returns will then be processed following the adjustments specified in the income tax notice 143 (1).
The Eight-Step Procedure
This is the procedure for responding to the income tax notice as per the IT Act.
Step 1: Log in to your account through the official income tax department e-filing website
Step 2: Click the tab "E-proceedings", then select the "E-assessment".
Step 3: Go to "Prima Facie Adjustment u/s 143(1)(a)"
Step 4: Here, you will look up the income tax notice 143 (1) details. Click the "Submit" button to begin sharing the response.
Also Read: Income Tax in India: Basics, Slabs and E-filing Process 2022
Step 5: After you hit "Submit", the website will list all matches the automatic system detected. Choose the drop-down selection next to the word "Response" button. Now, provide your response.
Step 6: In case there is an explanation specific to the inconsistency, mention it in the comments section.
Step 7: Provide supporting documents to explain the entries that are not matching before filing your response
Step 8: Click the button 'Submit., You will receive a message right after the system successfully receives your submission.
Centralised Processing Centre
The tax department faced problems with delays in processing income tax returns. The reason was the rapid growth in the volume of tax returns. The Finance Act 2008 amendments got into action to enable the CBDT Central Board of Direct Taxes (CBDT). The aim was to centralise the process of tax returns in order to speed up the process and assess if the taxpayers correctly paid the taxes. Taxpayers receive all refunds or payments due on time.
The income tax department considered suggestions from the technical advisory group. Later, it acted accordingly. The conclusion was that the CPC (in Bangalore) would manage the e-return and paper filings, and there won't be any interference from taxpayers. Finally, it started operating without jurisdiction. The CPC project proved to be a success for the taxpayers.
It allowed citizens to prepare their tax returns more quickly and without hassle. This relieves the burden on the tax department because the initial assessment was now automatic. It allowed tax officials and the tax department to concentrate on more important things than simple administration. So, it was a win-win situation for all.
Notification in the Context of Section 143(1)
It would help if you verified these things:
- It should pertain to the return you filed.
- The info in the letter should match the year in question as you described within the correspondence.
- Verify the PAN address, acknowledgement or reference number for e-filing and name assessment year.
If there are any errors from the person's filing, you can correct them. You must file a revised tax return through the e-filing income tax site. However, if you feel there are no errors in filing your electronic returns and you've received the notice incorrectly, you can file a grievance. You can conveniently submit the grievance online through the website. You can also call your assessor.
Contact the income tax ombudsman if you fail to receive a satisfactory reply from the assessor or CPC. If you accept the change and the income tax department makes a tax request, you must pay the tax balance.
Conclusion
Humans are prone to error. However, it is crucial to correct these mistakes at the earliest time possible. The income tax department may discover a mistake in the information on your IT return. In this case, the error could be classified as income concealment, and you could face an additional penalty along with interest due to delaying tax payments.
Therefore it is crucial to make changes to your tax return when you realise any errors on the initial return. You must pay the self-assessment tax if the revision results in more tax to be paid. If you receive an income tax refund, you will be informed as per the Income Tax Act under section 143 (1) when it is due.
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