How to respond to a Notice u/s 142(1)?

Have you ever received a notice from the Income Tax Department?

Receiving a notice does not always mean that there’s a problem. Understanding why you received the notice and what to do next is crucial for ensuring a smooth resolution.

Let’s understand one of the notices issued by the ITD, i.e., the notice issued under section 142(1).

Why is this notice issued?

You might receive this notice for reasons such as,

  1. You haven’t filed the ITR within the due date, or,
  2. You have filed the ITR, but, the assessing officer (AO) still wants to verify accounts, and documents or request further information, notes, and workings. This generally happens when AO finds some details missing or a mismatch in your ITR.

What action to take if the notice is issued?

Make sure that you file your return or produce the requested documents within the time limit mentioned in the notice.

How can one respond to the notice?

The reply to the notice can be submitted online by following these simple steps:

  1. Log in to the Income tax e-filing portal.
  2. Select Pending Action
  3. Click on E-Proceeding
  4. Choose the View Notices
  5. Submit a Response to proceed ahead to the new page.
  6. Click on the Select Response type for Notice
  7. Select between Partial response and Full Response and submit your reply accordingly.

Read about the penalty on account of failure to comply with the notice.

Let’s understand it better with an example-

Muskan is a self-employed consultant who filed her income tax return for FY 2021-22 before the due date, claiming deductions for expenses incurred on her business. The Income Tax Department found some discrepancies in the return filed. Upon investigation, they found that the deductions were excessively claimed and hence issued a notice under Section 142(1) asking Muskan to provide the necessary information and documents to verify the expenses claimed.

In this case, Muskan has to respond to the notice and provide the necessary information and documents within the time prescribed in the notice.

The AO will assess Muskan’s reply and he shall issue an intimation for the same.

Have further questions? Shoot’em here!

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