Understanding Notice Under Section 143(1): Income tax is a necessary form of tax levied by the central government on the income earned by the citizens and businesses in a particular financial year. The proceeds collected from income tax are spent on different public welfare activities. The Government uses the money collected from tax for providing better transport and medical facilities to the public.
The Centralised Processing Centre or CPC verifies the tax return that is filed by the taxpayers online on the income tax portal. After the return is verified and processed by the CPC, the income tax department issues the notification of the same to the taxpayer under section 143 (1).
If the tax return is not processed for some reason, then the income tax department issues a notice which says “communication of proposed adjustments” under section 143 (1) (A). If a taxpayer receives such notice, he/she should not panic because the notice comes with a 30 days time limit for response.
If a person receives a return notice under section 143 (1) (A), and the details mentioned in such notice is valid, then he/she has to agree to the notice and file a revised return. In this article, we will discuss in detail the tax return notice under section 143 (1) and section 143 (1) (A).
Return Notice Under Section 143 (1)
The notice that is issued under section 143 (1) is nothing but an intimation of the return filed by the taxpayer. When a taxpayer files a return, his/her return is processed by the Centralised Processing Centre. On the successful validation of the return statement, the taxpayer is notified through the issuance of notice under section 143 (1).
The notice issued by the income tax department under section 143 (1) does one of the following works:
- The notice can state that the return filed by the taxpayer matches the assessment and is validated successfully by the AO. In such a case, no further action is required by the taxpayer.
- Suppose the amount of tax paid by the taxpayer is more than the tax amount. The notice in such cases might intimate a refund of the excess amount into the taxpayer’s bank account as mentioned in the return statement.
- If the taxpayer has underpaid the tax amount, the notice intimates a demand for the tax amount due. The taxpayer has to pay the due amount within 30 days without fail.
Return Notice Under Section 143 (1)(A)
The income tax department issues notice under section 143 (1) (A) when a person’s return statement does not satisfy the statement present with the AO. When a person does not disclose certain facts regarding his/her income, the IT department issues a mismatch notice under section 143 (1) (A). If you ever receive a notice regarding facts mismatch, you need not worry because the notice comes with a time limit of 30 days to respond. One has to respond to the notice for clarifying the mismatch of facts and filing a revised return.
Types And Time Limit of Notice Under Section 143 (1)
Basically, there are three types of return notices issued by the income tax department under section 143 (1). The types are as follows:
- The first type of notice is confirmation notice. Under this notice, it is mentioned that the IT department has successfully validated the details of the return filed by the taxpayer. In simple words, his/her tax has been successfully filed.
- The second notice that can be issued under section 143 (1) is a refund notice. Under the refund notice, the income tax department states to refund the excess amount of money paid by a taxpayer against tax return.
- The third notice is a demand notice, under which it states to pay the amount of tax due against the taxpayer’s tax return. Here the AO finds a deficit in the tax amount deposited by the taxpayer and demands the amount be deposited.
The notice under section 143 (1) is issued before the expiry of one year from the end of the financial year in which it was filed. The intimation under section 143 (1) is sent to the e-mail id of the taxpayer as mentioned on the return statement.
Document With Return Notice Under Section 143(1)
So far, we have discussed the notice under section 143 (1), Now let’s see what documents are attached with the notice issued by the IT department.
The first part of the document attached with the notice under section 143 (1) contains details of the taxpayer including, Name, address, PAN number, ITR type, Assessment year, E-filing acknowledgement number, communication reference number and Date of an order. The date of order is when the intimation was passed under section 143(1) by the CPC.
The second part of the document contains the tax computation as conducted by the income tax department. It shows the taxpayer’s income under various heads, and the deductions claimed, the taxable income, tax paid, tax due, advance tax, etc. It shows all this information in two columns. One column is for the details provided by the taxpayer, and the other column is for the details as computed under section 143(1). A taxpayer must always check the TDS claimed, advance tax and self-assessment of tax to avoid error in computation.
A taxpayer might notice minor differences in calculations, but one should not worry as the differences might occur due to rounding of the tax amount.
Section 288 (A) and 288 (B) of the Income-tax act deals with the rounding off of tax. According to section 288 (A) of the income tax act, the total tax computed under various sections shall be rounded to the nearest ₹10. For the purpose of rounding off, the paise in the tax amount is ignored. If the last digit of the tax amount is equal to or greater than 5, then the amount should be increased to the next higher multiple of 10. In contrast, if the last digit of the tax amount is less than 5, then the amount should be reduced to the nearest multiple of 10. For example, if the tax amount is ₹75,684, then the tax amount shall be rounded off to ₹75,680. If the tax amount is ₹68,636, then as per section 288(A), it shall be rounded off to ₹68,640.
As per section 288(B), the rounding off of the tax shall be done only to the total amount of the tax computed or refundable. The rounding off under this section cannot be done to the tax computed under several heads. The same procedure is followed to round off tax under section 288(B) as under section 288(A) of the income tax act.
In The End…
Filing of tax return is the duty of every citizen. The proceeds of the tax return are used for various public welfare activities, including the construction of roads, hospitals, providing education and many more. One should not avoid paying tax and should file the return on time.