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- What is Section 142(1) of the Income Tax Act?
- How to Deal With a Notice Under Section 142(1) of the Income Tax Act?
- How to Respond to a Notice Under Section 142(1) of the Income Tax Act?
- What are the Consequences of Non-Compliance with the Directives Listed on the Notice Under Section 142(1) of the Income Tax Act?
- Conclusion
- FAQS - FREQUENTLY ASKED QUESTIONS
After the end of every financial year, every taxpayer whose income is above the basic exemption limit must mandatorily file their income tax returns before the specified due date. Once the income tax returns are filed, assessing officers take them up for verification.During the assessment and verification process, if the officers find any discrepancy or omission, they may raise a notice under section 142(1) of the Income Tax Act . Once a notice is raised, taxpayers must respond to them within the allotted time. Failing to respond can lead to significant consequences.Here is everything you need to know about notices under section 142(1) of the Income Tax Act and how you should respond to them.
What is Section 142(1) of the Income Tax Act?
Section 142(1) of the Income Tax Act empowers assessing officers (AOs) to issue notices to taxpayers who have not filed income tax returns within the stipulated due date, requesting them to file the returns within the specified time limit.The provisions of section 142(1) of the Income Tax Act also enable assessing officers to issue notices requesting taxpayers to produce additional information, statements of accounts, a statement of all assets and liabilities, or other documents for accurate assessment and scrutiny of the income tax returns.
How to Deal With a Notice Under Section 142(1) of the Income Tax Act?
If you receive a notice under section 142(1) of the Income Tax Act from your assessing officer, you must respond to it within the specified time limit. Usually, assessing officers give taxpayers 30 days from the date of receipt of the notice to file a response. However, the officers have the power to shorten or extend the time limit if they see fit.If the notice under section 142(1) was served due to non-filing of the income tax return within the original due date, then the ideal way to deal with it would be to file the return and submit a copy of the ITR-V acknowledgement as a response to the notice by logging into your income tax e-filing portal.On the other hand, if the notice was served due to the need for additional information or supporting documents, you must submit an electronic response along with the necessary documents and information by logging into your income tax e-filing portal . Also Read: Section 80CCF - Eligibility & Deductions Under 80CCF
How to Respond to a Notice Under Section 142(1) of the Income Tax Act?
Now that you are aware of how to deal with a notice under section 142(1) of the Income Tax Act, let us look at the step-by-step process you need to follow to submit an electronic response.
- Step 1: Visit the Income Tax India e-filing portal.
- Step 2: Log into your account using your credentials.
- Step 3: Under the ‘Pending Actions’ tab on the homepage, click on ‘e-Proceedings’.
- Step 4: Click on the ‘View Notices’ option.
- Step 5: Click on ‘Submit Response’.
- Step 6: Under ‘Select Response Type for Notice’, click on ‘Full Response’ or ‘Partial Response’.
- Step 7: In addition to your written response, you can also attach documents to support your claim. However, the documents must be in the following formats: PDF, Comma-Separated Values (CSV), or Excel.
- Step 8: Once you have uploaded all the necessary documents, click ‘Continue’ and submit your response.
Once your response is submitted, you will receive an acknowledgement for it. Also, you will be notified if there are any further developments. Also Read: Section 234B & 234C: Understanding Interest and Penalties on Advance Tax and Its Calculation
What are the Consequences of Non-Compliance with the Directives Listed on the Notice Under Section 142(1) of the Income Tax Act?
Failing to file a response to a notice under section 142(1) of the Income Tax Act within the specified due date can have major consequences. Here is an overview of what can happen if you do not respond to the notice.
- The assessment of your income tax return will be made on a ‘Best Judgement Assessment’ basis under section 144 of the Income Tax Act. The assessing officer will assess your income and tax liability using the information they have and their best judgement.
- A penalty under section 271(1)(b) of the Income Tax Act amounting to Rs. 10,000 may be imposed.
- Prosecution under section 276D of the Income Tax Act may be initiated, which may result in imprisonment of up to a year without or with a fine.
- A warrant for searching the premises may be issued under section 132 of the Income Tax Act.
Conclusion
A notice under section 142(1) of the Income Tax Act is something that all taxpayers must take seriously. Any delays in filing a response to the notice within the specified time limit can have consequences. Fortunately, responding to such notices is simple and can be done electronically by logging into your Income Tax India e-filing portal.Ready to make the most of your money? Start your tax planning journey now!
FAQS - FREQUENTLY ASKED QUESTIONS
Who issues a notice under section 142(1) of the Income Tax Act ?
An assessing officer is authorised to issue a notice under section 142(1) of the Income Tax Act.
When is a notice under section 142(1) of the Income Tax Act issued ?
A notice under section 142(1) of the Income Tax Act may be issued if the assessing officer feels that an income return is defective or has certain details missing. The assessing officer may also send a notice under this section if you have not filed your income tax return within the specified due date.
What should I do if I receive a notice under section 142(1) of the Income Tax Act ?
If you have received a notice under section 142(1) of the Income Tax Act, you must respond to it within the specified time frame, which is usually 30 days from the date of receipt. You can file a response electronically by logging into your income tax e-filing portal.
What happens after I submit my response to a notice under section 142(1) of the Income Tax Act ?
Once you submit a response to a notice under section 142(1) of the Income Tax Act, the assessing officer will scrutinise the same and close the action if satisfied. If not, the officer may request more information or clarification.
Is there a maximum time limit for issuing a notice under section 142(1) of the Income Tax Act ?
No. There is no maximum time limit for issuing a notice under section 142(1) of the Income Tax Act. In fact, it can be issued even after the assessment year ends.
What happens if I do not comply with the directives listed on a notice under section 142(1) of the Income Tax Act ?
If you do not comply with the directives listed on a notice under section 142(1) of the Income Tax Act, you will be liable to pay a penalty of Rs. 10,000. You may also be prosecuted under section 276D, with imprisonment of up to a year with or without a fine.
Can I file a partial response to a notice under section 142(1) of the Income Tax Act ?
Yes. You may file a partial response to a notice raised under section 142(1) of the Income Tax Act. However, this may lead to the assessing officer sending another notice calling for more information or clarification.
Does the assessing officer have any other additional powers when serving a notice under section 142(1) of the Income Tax Act ?
Yes. Section 142(1) of the Income Tax Act also empowers assessing officers to request that taxpayers get their accounts audited by a Chartered Accountant or their stock valued by a Cost and Works Accountant.
What is the limit on the number of years of information that an assessing officer can request under section 142(1) of the Income Tax Act ?
An assessing officer cannot request that taxpayers submit information or documents that are older than 3 years.
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
