How to Respond to an Income Tax Notice — A CA's Complete Guide
A CA's guide to income tax notices under Sections 139(9), 143(1), 143(2), 148, and 245. Includes response timelines, document checklist, and what happens if you ignore a notice.
Harun Raaj
Chartered Accountant · Harun Raaj & Associates
Don't Panic — Understand the Type First
Receiving an income tax notice is not automatically bad. Many notices are routine — defect in return, tax refund adjustment, or a simple request for information. The response required, urgency, and consequences differ drastically by notice type.
All notices are issued electronically and available on the e-Filing portal under Pending Actions → e-Proceedings. Physical notices are secondary.
Section 139(9) — Defective Return Notice
What it means: Your return has a technical defect — wrong ITR form, incomplete details, mismatch between tax paid and computed, or missing schedules.
Response deadline: Correct and refile within 15 days (extendable on written request). If no response: return treated as invalid — as if never filed.
Common triggers:
- Filed ITR-1 but had capital gains (should have been ITR-2)
- Left mandatory fields blank
- Tax payable per computation does not match self-assessment tax paid
Section 143(1) — Intimation After Processing
An intimation auto-generated by CPC after processing your return. Three outcomes: no demand/refund match; demand raised (department computed higher tax); refund reduced.
Response: Pay demand or file rectification under Section 154 within 30 days from the date of intimation.
Section 143(2) — Scrutiny Notice
What it means: Your return is selected for scrutiny assessment. The Assessing Officer has specific questions about income, deductions, or transactions.
Key rule: The notice must be served within 3 months from the end of the financial year in which the return was filed — notices beyond this are invalid.
Common triggers: High deductions, large cash deposits, AIS mismatch, significant capital gains, foreign transactions.
Response: Submit documents and explanations via e-Proceedings within the specified time (typically 15-30 days). A CA's assistance is strongly recommended.
Section 148 — Notice for Income Escaping Assessment
What it means: The AO believes income was not disclosed. Initiates reassessment proceedings under Section 147.
Time limits (post Finance Act 2021 amendments):
- Up to 3 years from end of AY (escaped income ≤ ₹50 lakh)
- Up to 10 years from end of AY (escaped income > ₹50 lakh)
Response: File a return of income within 3 months from the date of the notice.
Section 245 — Refund Adjusted Against Demand
The department proposes to set off your refund against an outstanding demand from a previous year.
Response: Within 30 days, agree or disagree with supporting documents (proof of payment or dispute).
Step-by-Step Response Process
- Log in to incometax.gov.in → Pending Actions → e-Proceedings
- Note the section, assessment year, specific query, and deadline
- Gather supporting documents (Form 16, bank statements, investment proofs, capital gains statements)
- Draft a factual response — each query answered with specific document references
- Upload via e-Proceedings and save the acknowledgement
What Happens If You Ignore a Notice?
- Section 139(9): Return treated as invalid
- Section 143(2): Ex-parte assessment under Section 144 — large demand based on AO's estimates
- Section 148: Return treated as not filed; assessed on AO's best judgment
- Section 245: Refund adjusted without consent
For scrutiny and reassessment notices, engage a CA immediately. Our litigation team drafts comprehensive written submissions backed by case law and CBDT circulars.
Frequently Asked Questions
What should I do first when I receive an income tax notice?
Read the notice carefully to identify the section it is issued under — this determines the nature of the demand and your response options. Check the DIN (Document Identification Number) on the e-filing portal to verify authenticity. Notices under Section 143(1) are automated intimations; Section 148 notices require a full response with legal implications. Never ignore a notice — non-response can lead to ex parte assessment.
What is the time limit for responding to an income tax notice?
It varies by section. Section 143(1) intimations typically require response within 30 days. Section 142(1) notices specify a date (usually 15–30 days). Section 148 reassessment notices require filing a return within the date specified. Section 148A(b) notices (show cause before reassessment) allow at least 7 days but usually 15–30 days. Missing the deadline can result in best-judgment assessment under Section 144.
Can I respond to an income tax notice without a CA?
For Section 143(1) intimations and Section 245 refund set-offs, the e-filing portal provides a structured response workflow — but the framing of your reply, document selection, and what you leave unsaid can significantly affect your exposure. An unguided response may inadvertently expand the scope of the assessment or waive your right to contest. For notices under Sections 148 (reassessment), 263 (revision), or 271 (penalty), professional representation under Section 288 is essential, not merely advisable. We recommend a CA review before responding to any notice, regardless of how routine it appears.
What is a demand notice under Section 156?
A notice under Section 156 is a demand for tax, interest, penalty, or any other amount payable under the Act. It is issued after an assessment order is passed. The amount must be paid within 30 days unless you file an appeal under Section 246A to the CIT(Appeals) or apply to the Assessing Officer for stay under Section 220(6).
Can I get an income tax notice for a previous year even after filing correctly?
Yes. The Assessing Officer can issue a notice under Section 148 for reassessment if there is reason to believe income has escaped assessment. For AY 2022-23 onwards, the time limit is 3 years from the end of the assessment year (extendable to 10 years if escaped income exceeds ₹50 lakh), per the Finance Act, 2021 amendments.
I'm CA Harun Raaj, Visakhapatnam. If any of this affects you or your business, reach out — I'd be glad to help.
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See Also
Frequently Asked Questions
What should I do if I receive a Section 139 9 defective return notice from income tax?+
If you receive a Section 139(9) defective return notice, you must correct and refile your return within 15 days (extendable on written request). The notice indicates your return has a technical defect such as wrong ITR form, incomplete details, or missing schedules. If you don't respond, your return will be treated as invalid.
How long do I have to respond to a Section 143 2 scrutiny assessment notice?+
Under Section 143(2), you must respond to a scrutiny notice within the specified time frame (typically 15-30 days as per the notice). However, the notice itself must be served within 3 months from the end of the financial year in which you filed your return — notices served beyond this deadline are invalid.
What is the difference between Section 143 1 intimation and Section 143 2 scrutiny notice?+
Section 143(1) intimation is an auto-generated notice from CPC after processing your return, showing no demand/refund match, a demand raised, or reduced refund. Section 143(2) is a scrutiny notice where your return is selected for assessment and the Assessing Officer has specific questions about income, deductions, or transactions.
What are the time limits for Section 148 reassessment notice for escaped income?+
Under Section 148 (post Finance Act 2021), reassessment notices can be issued up to 3 years from the end of the assessment year if escaped income is ≤₹50 lakh, and up to 10 years from the end of the assessment year if escaped income exceeds ₹50 lakh. You must file a return of income within 3 months from the date of notice.
Where can I access and view my income tax e-proceedings and notices online?+
All income tax notices are issued electronically and available on the e-Filing portal. You can access them under Pending Actions → e-Proceedings. Physical notices are secondary to the electronic notices available on the portal.
How do I respond to a Section 143 1 intimation with a tax demand?+
Under Section 143(1), if the department has raised a demand (computed higher tax than your return), you can either pay the demand or file a rectification request under Section 154 within 30 days from the date of intimation.
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