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Oh, NO! You've been served an IT Notice! What next?

You’re sitting on a Sunday morning on your bed. Drinking coffee and scrolling reels. And suddenly your phone flashes a notification:


What do you do now? What happens next? What does the section quoted even mean? But haven’t you already filed your taxes within the deadlines too?

Don’t worry, we are answering all these questions for you here.

First of all, do not freak out. Try to understand the nature of communication. It could also be an Intimation, which may also entail absolutely no action from your end at all.

Secondly, understand why a notice has been served. Let us take you through the various sections through which you can be served a notice

1. Intimation Under Section 143(1)

It is an official communication sent by the tax department to a you following the processing of their ITR. It notifies you about any adjustments, corrections, or modifications made to the ITR, detailing the reasons for these changes. The intimation specifies the revised tax calculation, tax liability, and potential refund, if applicable.

2. Notice Under Section 143(2)

The Notice aims to inform you that your return has been selected for scrutiny. The Assessing Officer will conduct a detailed examination to ensure that there has not occurred an understatement of income or excessive claiming of losses, or lesser payment of taxes. You are required to respond to a questionnaire and provide required documents. The Assessing Officer is supposed to service this Notice within 6 months after the completion of the Assessment Year (AY) to which it pertains, that is if you file your return on 28th June, 2023 for the AY 2022-23, the maximum time allowed to serve a notice is 30th September, 2024.

3. Notice Under Section 148

An Assessing Officer may suspect that you have not disclosed your income correctly, leading to lower taxes or not filing your return, resulting in an Income Escaping Assessment. The Officer can assess or reassess the income, depending on the case. Before making such an assessment, the Officer must serve a notice to you, which is issued under Section 148. The Finance Act 2021 Amendments have changed the time limit for re-opening the assessment.

Get in touch with us, at Sawingz, for a free advisory to understand if the Notice has been issued beyond its limit.

4. Notice Under Section 245

If the Assessing Officer suspects unpaid tax for the previous years and wants to set off the current year’s refund against that demand, a Notice under Section 245 can be issued. However, proper notice and opportunity to be heard are required. The deadline for you to respond is 30 days from receipt, and failure to respond within this timeframe may result in your consent being assumed and the assessment proceeding would begin. Thus, it is advisable to respond to the notice at the earliest.

5. Notice Under Section 142(1)

A Notice here can be issued under two circumstances:

  • If you have filed your ITR, but the Assessing Officer requires additional information; or

  • If you have not filed your return, but the assessing officer wants you to file it.

The information called for is to allow a fair assessment for you by the Assessing Officer.

So now that you’ve understood under what sections you can be served, what is the next step forward for you? Well, when you get a notice under any of the above sections, make sure to carefully read the Notice to determine why it was sent. Then examine the basic details to ensure that it was intended for you. After that, determine if there is a mismatch in your ITR that resulted in a notice being served. Finally, respond to the notice within the time frame specified. It goes without saying that you have to make sure your response is backed by adequate information.

All of this fine, by why are you feeling apprehensive? It is completely fine to feel that way and we understand this. This is why we, at Sawingz, exist. We have an Advisory Board composed of really experienced Chartered Accountants to Retired IT Officers to Lawyers who understand every nook and corner of the law, to assist you in complying with any legality thrown at you. We’ll completely cover your back from first evaluating if the Notice is valid in the first place till disposing of the same in a manner that is most beneficial to you, as an assessee.

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