Income Tax Notice: Check and Authenticate Online

For taxpayers who honestly pay the taxes, receiving an income tax notice can cause anxiety and tension. However, often most of them are regular and easily manageable. Filing an ITR is always on the to-do list of a taxpayer; however, it is not always the end of your tax journey. In today's data-driven tax system, receiving the tax notice is not a big issue, not because you are wrong or have done something incorrect, but because the Income Tax Department has good access to your financial transactions. But here is something that you need to be concerned about. Some of the ITR notices require your additional details and need quick replies, whereas some are just for information. In this situation, before taking any step, the taxpayers need to first verify the notice. Want to know how you can do so? Then this guide is for you, it explains everything about Income tax notices, from their types to the documents required, and how to check their authenticity. So, let's start reading.

Types of Income Tax Notices

An income tax notice is a written document sent by the Income Tax Department informing the taxpayer about having an issue with his/her tax account. There are several reasons, such as the absence of certain information, filing/non-filing of the ITR, or more, for which a person can get a notice from the IT department. When an individual receives the notice from an IT department, they need to answer it on the given timeline and, with the tax officials, solve the matter. However, as stated above, not all give you panic attacks; some just ask for missing documents, an explanation of mismatched details, or more information. To provide you with a clear understanding of the income tax notices and how to respond to the different notices, let's outline the various types of them.

Notice Under Section 133(6)

Under Section 133(6) of the Income Tax Act 1961, the Income Tax Department Officials have the right to send a notice to the taxpayers to provide additional details or evidence in situations where there are misreported or understated returns. It is the E-verification Scheme 2021, enacted by the IT department, that involves calling for details from those taxpayers where the officials find a material difference between the data available in the AIS form and the ITR filed. A person can receive this notice for the following reasons:

• Despite the income being more than the exemption limit, ITR is not filed by the person.
• Income is taxable in the form of capital gains tax for NRIs, salary, and interest income, as stated in the Annual Information Statement (AIS). However, in the ITR form, the amount is not correctly mentioned.
• Significantly higher expenses in the form of travelling to a foreign country, buying an immovable property, and purchasing stocks or mutual funds, compared to the declared income in the ITR form.

How to Respond Notice u/s 133(6)?

Here is how you can respond to the notice u/s 133(6):

• First, identify the reason for getting this notice and know whether it is a mistake from the tax department or a misstatement from the taxpayer.
• After that, visit the official website of the Income Tax, using your credentials, and log in to the portal. Then, go to the pending action section, and from there click on the compliance portal, after that on E-verification.
• A form will appear on your screen, mention the details, and attach the necessary documents for detailed information.
• If the mistake is from your side (the taxpayer) and you are required to pay additional liability, then you can file the updated return u/s 139(8A). Along with the charges, also provide the clarification for the error.
• In case the notice you received is a mistake from the department, using the insights portal with supporting documents, you can reply to the notice.

Notice Under Section 142(1)

Under two circumstances, you can receive the notice under section 142(1). These are as follows:

• If you have filed your income tax return, but the tax officer needs additional documents and information.
• You have not filed your income tax return, and the tax officer wants you to file the ITR.

The information is requested by the income tax department so that the tax officer can make the right assessment. In case you do not provide a reply to this notice, you face the following consequences:

• For each notice failure, you may have to pay a penalty of Rs 10000
• Prosecution, up to one year
• Both the above-mentioned things

Intimation Under Section 143(1)

Intimation under section 143(1) is a notice from the Income Tax Department that consists of a summary of your file ITR information that has been processed further. You receive this notice from the income tax department because of the small mistakes or errors you made when filing your ITR. These are the reasons why you can get this notice:

• Making an incorrect claim, which did not match the ITR details. For instance, you have shown the deduction of rental income from the business income, which is not mentioned under income from house property.
• Expenditure disallowance is stated in the audit report but is not mentioned in the total of ITR.
• Calculation of interest, tax, late filing fees, and more.
• Any arithmetical mistake in the ITR

Once the ITR is processed successfully, the Central Processing Centre (CPC) issues an intimation under section 143(1) under any of the three reasons:

• A refund has been analysed
• Have a pending tax liability
• There is no demand or refund; however, have a reduction or increase in the loss amount.

In case there is a pending tax demand, then within nine months, it is vital to issue the intimation notice from the year-end in which the income tax return has been filed. For instance, if you have filed your ITRs for the assessment year 2024-25 on July 27, 2024, then you can receive the intimation notice before 31 December 2025. From the accounting year 2017-18, it has been mandatory to process the ITR under this section.

How to Analyse the Intimation under Section 143(1) Notice?

To analyse the intimation under section 143(1) notice, follow the below-mentioned steps:

• The intimation notice provides the complete analysis of the date mentioned in the ITR and computed under u/s 143(1).
• Analyse which line item is the reason for the additional liability
• It can be because of the error in deduction, prepaid taxes, or income.
• If it happened due to any mistake, then with a 4-year period from the end of such accounting year, you can file a rectification return u/s 154.

Notice Under Section 143(2)

This notice is issued when the income tax department finds errors or variations in the filed income tax return, whether big or small, it issues 143(2). The variations or errors in the ITR might involve over-reporting of financial losses or under-reporting of income. It is a notice for a detailed or scrutiny assessment. In simple words, this notice denotes that the income tax officials have analyzed certain issues in your filed ITR on which they need your clarification. It is done to verify the reliability and correctness of several deductions stated by the taxpayer in his/her filed ITR. With detailed scrutiny, the tax officer wants to be sure that you have not made any of the following mistakes:

• Paid less tax than your liability
• Under-reported your income
• Over-claimed loss

After receiving this notice, you need to answer the questionnaire attached with the required documents by the income tax department. After the completion of the financial year to which it is associated, within three months, the income tax officer is supposed to provide you with this notice.

For example, on 20th May 2024, Nishank filed his income tax return for the assessment year 2024-25. Here, he can receive the notice under section 143(2) within three months after the end of the associated accounting year, i.e., 30th June 2025.

How to Reply to the Notice u/s 143(2)?

You can rely the notice u/s 143(2) in the following way:

• Carefully read the notice and identify the reason for getting it. For this, you can check the annexure.
• Using a cover letter, prepare a response. Provide a detailed clarification, formally and truthfully answer all the mentioned questions in detail.
• Under e-proceeding, using your credentials, log in to your Income Tax portal. Reply to the given notice with the prepared cover letter, and do not forget to attach the requested documents.

Notice Under Section 148

Under section 148, the income tax department has the right to send a notice to the taxpayer if he/she deems that the income of the taxpayer in the filed ITR has not been properly assessed. In simple words, if the income tax officer has a valid reason to believe that the taxpayer has failed to mention some income in the ITR, he/she can send a notice to them under section 148.

Previously, the timeline to respond to the notice under section 148 was as follows:

According to the Finance Act 2021 amendment, which came into effect on 1 April 2021, the time limit within which the income tax officer can re-open the filed ITR of the taxpayer is as follows:

• In normal cases, up to three years from the end of the financial year
• Beyond three but not more than 10 years from the end of the relevant assessment year. In case the tax officer has evidence that Rs 50 lakh or more income for an accounting year has escaped assessment.

Time Limit to Issue Notice for ITR Filed Preceding to Finance Act 2021

These are the following time limit issues notice for ITR filed preceding the Finance Act 2021

• Up to 4 Years from the End of the Relevant Financial Year: A tax officer who is under the rank of Deputy Commissioner or Assistant Commissioner cannot issue the notice. Under section 148, a tax officer can only issue the ITR notice on the order of the Joint Commissioner after having valid reasons for doing so. For the financial year 2017-18, ITR notice under section 148 can only be issued till 31 March 2022 (here, the figures are assumed for the filed ITR, preceding 2021, Finance Act).
• Beyond 4 Years but up to 6 Years from the End of the Relevant Financial Year: Only the Chief Commissioner or Commissioner is authorised to issue this notice under section 148 if satisfied that income has escaped assessment. Here, the escaped income amount should be more than INR 100000. For the financial year 2017-18, this notice can be valid to issue till 31 March 2024 (here also the figures are assumed for the filed ITR preceding the 2021 Finance Act).
• Beyond 4 Years but up to 16 Years from the End of the Relevant Financial Year: Under this, the notice can be issued if the income is related to an asset situated outside India that is taxable in India, but has escaped assessment. The assets also include financial interests in any entity. For the financial year 2017-18, this notice is valid to be issued till 31 March 2034 (here the figures are assumed for the filed ITR preceding the 2021 Finance Act).

Amendment Effect in Finance Act, 2021

According to the present provisions, you can issue the ITR notice up to four, six, or 16 years under section 148, according to the case. However, the new reassessment due dates from 1 April 2021 were applicable. Confused? Through the given table, let us understand the timelines for previous accounting years after the Finance Act 2021 amendment came into force:

Here, for the assessment year 2015-16, in normal cases, the tax officer cannot issue a notice under section 148. In addition, for the accounting year 2016-17, before 31 March 2021, the notice should be issued.

Notice Under Section 245

A notice under section 245 is issued when the tax officer has a valid reason to believe that the previous year's tax has not been paid, and to balance it off, he/she wants to fix the amount with the refund of the current year. Section 245 of the Income Tax Act 1961 provides the power to the Income Tax Department to adjust the tax demand of the previous year with the refund of the current year. However, to implement this power, it is mandatory for the officer to send the notice under section 245 of the IT Act 1961 to the taxpayer and provide them time to reply to it, whether they agree with it or not.

The timeline provided to respond to the notice is one month from the day the taxpayer receives the notice. In case you fail to reply to the notice on time, the officer will consider this as your consent and proceed further with the assessment. Hence, it is advised that when you receive the notice, reply to it as early as possible.

What to Do When You Receive the Income Tax Notice Under Section 245?

When you receive the income tax notice under section 245, you should consider taking the following steps:

• Step 1: Read the notice carefully and find out the reason why you got this.
• Step 2: Check the basic details of the notice to ensure whether it is for you or someone else with the same name as yours. For this, check your name, PAN number, the mentioned address, and more. Also, do not forget to check the financial year stated in the notice.
• Step 3: Verify the mismatch in your ITR that outcome in receiving this notice.
• Step 4: To avoid prosecutions and penalties, reply to the sent notice within the given timeline.
• Step 5: Ensure that you reply to the notice with adequate information and a proper explanation.
• Step 6: Apart from this, check that the notice you received from the Income Tax Department is also shown on your online income tax account.

These are the different types of income tax notices that taxpayers often receive from the Income Tax Department under different sections. But have you ever thought about the reasons for getting these notices? Want to know? Read the next section and get your answers.

What are the Most Common Reasons for Getting an ITR Notice?

The most common reasons for which you can get an income tax notice from the Income Tax Department under different sections are as follows:

• Mismatched income tax return
• An error or mistake in your filed ITR
• Mismatch of the amount in the filed TDS report
• I forgot to submit all the requested documents
• Delayed or forgot to file the ITR on time
• When you invest in your spouse's name and forget to state the same in your ITR
• Inaccurate details on income or assets
• Done high-value transactions during the accounting year and not properly stated in the ITR
• When you earn from long-term capital gains from equity investments that are not correctly reported
• If the tax officer does a general scrutiny of your ITR
• If you used the wrong form to fill out the ITR
• If your current tax refunds can be set off against the tax liability of last year
• Self-assessment tax is still pending
• Variance in the stated income, or the taxpayer does not mention any income
• If you fail to pay taxes in the previous accounting years

Things to Do After Getting a Notice from the Income Tax Office

Under any of the above-mentioned income tax sections, if you received an ITR notice, you should follow these steps:

• Thoroughly read the notice and identify the reason for receiving it.
• To ensure the notice is for you, check the details mentioned on it. It includes your name, address, PAN card number, mobile number, and more. In addition, check the accounting years also.
• Find out if there is a variation in your ITR because of which you get the notice.
• Within the given timeframe, provide a reply to the ITR notice to avoid any prosecutions and penalties.
• Ensure that your explanation is supported by adequate information.
• Additionally, check whether the received ITR notice is also available online on your income tax account.

Legal Consequences a Person Can Face by Ignoring the Income Tax Notice

If you ignore the income tax notice sent by the income tax department, you may face penalties, fines, and legal action taken by the tax officials. Additionally, your filed income tax return can be treated as invalid. It may cause situations such as interest, penalty, loss of specific exemptions, and no more carry forward of losses. Apart from this, it may also outcome in paying additional tax liabilities or affecting your financial reputation.

Documents Required to Answer an Income Tax Notice

The documents you need to submit in reply to the notice you received from the Income Tax Department depend on their type. However, some of the documents remain common in all income tax notices. These are as follows:

• Copy of income tax notice
• If applicable, proof of investment
• Income sources proof, such as (Part B) of Form 16, salary slip, etc.
• Form 16 (Part A), TDS for NRI/ Section 195 certificate

How to Authenticate an Income Tax Notice?

Before you reply to any notice received in the name of the Income Tax Department, it is essential to verify whether it is genuine or not or is issued by the Income Tax officials. Here is how using the income tax portal, you can check the authenticity of the received notice:

• Step 1: Visit the online income tax portal and, using your credentials, log in to your account. Under the "quick links" section, click on the "authenticate order/notice issued by the ITD."
• Step 2: Using your financial year, mobile number, PAN card, document type, and issue date, you can verify your income tax notice. You can also use your Document Identification Number (DIN) and mobile number to authenticate the notice you received from ITR.
• Step 3: To authenticate the notice using the financial year, PAN number, date of issue, and mobile number, choose the correct option and mention the requested information.
• Step 4: Once you have mentioned all the details, you will receive an OTP on your registered mobile number. Enter the received OTP. After its validation, you will see your DIN and the issue date of the notice on the screen. In case of your name, no notice is issued by the income tax department, a message will be shown on your screen stating, "No details found for the given criteria."
• Step 5: Another way to check the authentication of your ITR notice is by using your mobile and DIN number.
• Step 6: Mention your mobile number and DIN number, and continue the process. On your registered mobile number, you will get an OTP. Validate the information using OTP. If the income tax department has issued an order/notice, on your screen, a success message will be displayed, i.e., "Yes, notice/order issued by the income tax authority for the details entered." In case you did not receive any message from the authority, the screen will show, "No record found for the given DIN number."

Final Thoughts

This was all about the income tax notice and how you can check and authenticate it online. The taxation system of India is no longer passive. It is now proactive, AI-driven, and automated. For Indian residents, entities, and NRIs, the best way to stay away from receiving a notice from the Income Tax Department is to maintain transparency and respond timely. Disclose your income, match your information, file returns, and properly submit your documents. You are not just filing taxes; you are also protecting your financial standing. With this, if you need more information on the income tax notice, DTAA agreement or need assistance in replying to the notice, connect with Savetaxs. We have a team of professionals who have years of expertise in national and overseas tax assignments and can help you with your tax notice. So, why take stress when you have the option to get guidance? Contact us today and solve all your doubts.

Note: This guide is for informational purposes only. The views expressed in this guide are personal and do not constitute the views of Savetaxs. Savetaxs or the author will not be responsible for any direct or indirect loss incurred by the reader for taking any decision based on the information or the contents. It is advisable to consult with either a Chartered Accountant (CA) or a professional Company Secretary (CS) from the Savetaxs team, as they are familiar with the current regulations and help you make accurate decisions and maintain accuracy throughout the whole process.