Intimation Under Section 143(1) of Income Tax Act

Intimation Under Section 143(1) of Income Tax Act

All the income tax returns filed by the taxpayers are first processed online at the Centralised Processing Centre (CPC). After processing the return, the income tax department then issues intimation under section 143(1) to the taxpayers informing them about the results

When Section 143(1) Tax Notice is Issued?

A tax notice under Section 143(1) of the Income Tax Act can be issued to begin a summary assessment without calling the taxpayer. Section 143(1) notices are issued based on computerized processing of tax returns without any human interface. In a summary assessment, the Income Tax Department would not call for additional information or documents as requested in a scrutiny assessment.

Summary Assessment under Section 143(1)

1. Any arithmetical error in the return;
2. An incorrect claim, if such claim is apparently wrong in the tax return filed;
3. Disallowance of loss claimed, if return of the previous year for which set off of loss is claimed was furnished beyond the due date for filing income tax return;
4. Dissallowance of expenditure indicated in the audit report but not taken into account in computing the total income in the return (applicable from AY2017-18);
5. Disallowance of deduction claimed under Section 10AA, 80-IA, 80-IAB, 80-IC, 80-ID, or 80-IE, if the return is furnished beyond the due date specified under Section 139(1).
6. Addition of income appearing in Form 26AS or Form 16A or Form 16 which has not been included in computing the total income in the return;
7. Information with is inconsistent with another entry of the same or some other return;
8. Information required to substantiate an entry which has not been provided like donation information;
9. If any deduction exceeds the statutory limit allowed;

Responding to Tax Notice

Additional tax is payable by the assessee, after making adjustments mentioned below and giving credit to the taxes and interest paid. In such a case, the taxpayer will be asked to pay the amount due within 30 days. Tax is refundable to the assessee, after making adjustments mentioned below and giving credit to the taxes and interest paid.

There is an increase/decrease in the loss declared by the assessee and no tax or interest is payable by the assessee and no interest is refundable to the assessee.

Time Limit

Assessment under section 143(1) can be made within a period of one year from the end of the financial year in which the return of income is filed. Thus the intimation for tax or interest due under Section 143(1) should not be sent after the expiry of one year from the end of the financial year in which return is filed.

Process for Responding to Income Tax Notice under Section 143(1)

1. The tax notice u/s 143(1) will be sent to the assessee specifying the sum determined to be payable by, or the amount of refund due to the taxpayer.
2. In case there is no sum payable or refundable, the acknowledgement of the return of income will be deemed to be the intimation.
3. The taxpayer should note that merely because notice is received from the income tax department, it does not mean that it is mandatory for the taxpayer to appear in person before the authorities.
4. In many cases, it shall be sufficient if the person receiving the notice furnishes a response to it in the physical or electronic mode.
5. If the taxpayer would like to revise the income tax return after receiving a notice under Section 143(1), the assessee must be aware that the deadline for revising the return is 15 days from the date of the notice.
6. If the taxpayer fails to respond in a timely manner to the income tax notice u/s Section 143(1), the income tax return will be processed after making necessary adjustments mentioned in the income tax notice.