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Responding to Notice Received u/s 143(1)(a)

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Responding to Notice Received u/s 143(1)(a)

Recently, many taxpayers received a notice from the Income Tax Department, which claimed discrepancies, in their declared income.  If you were among the thousands who received this notice for the first time, then you probably went through a spectrum of emotions including, shock, irritation and anger leading you to eventually seek counsel to rectify the claimed discrepancy.  This entire ordeal had many tax abiding citizens cursing the Income Tax Department, as many of the recipients of the notice had not made an error when submitting their returns.

Section 143(1) Notices

Normally, whenever an individual files his/her taxes, a notice will be sent falling under one of the three following:

  1. No discrepancies are found and no further action is required.
  2. A refund notice is sent as you have paid too much or
  3. You have an outstanding amount according to the assessment order and you have thirty days to pay the amount or furnish proof to the contrary.

Reason For Clarification to Section 143(1)

It had come to the attention of the ITD that some taxpayers were using fake rental receipts and claiming deductions where there should have been none.  Moreover, some taxpayers were also claiming deductions from investments, without making them.  To combat many such problems, the ITD began sending out notices to taxpayers whose returns had the slightest variance between Form 16, Form 16A and Form 26AS.  However, this created a great deal of confusion as many people who should not have received such notices were getting them. So, the ITD made clarifications to notices issued under 143(1)(a).

If you were the recipient of this notice, you likely have claims under HRA, 80C, etc. which were not mentioned in your Form 16.  So, for example, if a source of income was mentioned in either of the three above mentioned forms, but excluded in ITR 1 form, then you may receive this notice.  Moreover, if a source of income was completely omitted in your submission, then the notice which you receive would hold true and the necessary action would need to be taken.  Resolving this issue is quite simple, as you have 30 days to reply to the notice and rectify the discrepancy or provide the requested information by going to the ITD website and following the procedures mentioned in –  How to Respond to Notice u/s 143(1) – Letter of Intimation & Notice u/s 143(1)(a).

So all those who filed returns in ITR-1 and received intimations issued under the above section, their returns will be processed based on the new instruction from the CBDT irrespective of the fact whether the taxpayer has submitted a response to the intimation or not. Also in cases where the taxpayer has already filed a revised return in response to such notices then the return will be treated as valid and dealt accordingly with the new instruction issued.

Laws, by their nature are constantly being updated and modified and the same holds true for income tax laws. So, if you find yourself in a similar situation in the future, you can take comfort that the clarification you need can be found by the tax experts at H&R Block.

Chetan Chandak
Chetan Chandak
Chetan is a Tax-Lawyer by profession and has been working with H&R block as Assistant Manager-Tax Advisory from last four years. He has more than 7 years’ experience in audit, taxation and finance fields. He specializes in personal taxation of HNIs and Top Management Executives. His major area of interest is tax litigation, tax research handling dual tax impact for ex-pat clients. He loves to travel, trek and cook.

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