Question 1

What are the most common income tax notices and what do they mean?

Accepted Answer

Section 143(1): intimation — processing order, not a scrutiny notice; typically about mismatches in computation. Section 143(2): scrutiny notice — your return has been selected for audit; respond within the specified date. Section 148A: before reassessment — AO provides information suggesting escaped income; you respond within 15 days. Section 131: summons for production of documents or appearance — must comply. Section 156: tax demand notice — 30 days to pay or appeal. Section 245: adjustment of refund against demand — respond if the demand is disputed.

Question 2

What is the Section 143(1) intimation and what action is required?

Accepted Answer

Section 143(1) intimation is issued by the Centralised Processing Centre (CPC) within 9 months of filing. It covers: arithmetic errors in the return, incorrect claims not matching Form 26AS/AIS, and disallowances for specific deductions. If the intimation shows additional demand: verify against Form 26AS and AIS to identify the mismatch; file a rectification application under Section 154 within 4 years if the error is in the CPC's processing. If the demand is valid: pay via Challan 280. The intimation is not an assessment order — no appeal lies.

Question 3

How do I respond to a Section 142(1) notice?

Accepted Answer

Section 142(1): AO issues this before completing the assessment to requisition: (a) return of income (if not filed); (b) production of accounts and documents; (c) questionnaire asking specific questions about income, deductions, and transactions. Respond within the specified time (typically 15–30 days). Documents requested are usually: bank statements, stock register, ledgers, sales registers, supporting for deductions claimed, and valuation reports for assets acquired. Delayed or incomplete response leads to best judgment assessment under Section 144.

Question 4

What is a Section 148A notice and how is it different from a Section 148 notice?

Accepted Answer

Section 148A (introduced by Finance Act 2021): preliminary inquiry before reopening assessment. The AO must: (a) provide information to the taxpayer about the alleged escaped income; (b) hear the taxpayer's response (within 15 days); (c) obtain prior approval from the designated authority; (d) pass a reasoned order under Section 148A(d) before issuing notice under Section 148. This is a pre-notice stage — challenge the Section 148A(d) order itself before filing the ITR under Section 148. The 3-year limitation for Section 148A applies from the end of the relevant assessment year.

Question 5

What is the response protocol when a notice arrives?

Accepted Answer

Immediately: (a) verify the notice is genuine by checking the Income Tax Department portal under 'Pending Actions' — phishing notices are common; (b) check the relevant section, AY, and response deadline; (c) do not respond without CA review — responses are admissions and create a paper trail. The CA's role: analyse the AO's basis for the notice, prepare a factual and legal response, compile supporting documents, file the response on the e-proceedings portal under Section 133(6)/142(1)/143(2). For GSTN/MCA notices: similar protocol — verify authenticity on the respective department portal.

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