Income Tax Notice, Assessment and Appeal in India

Why notices are issued

Common triggers are a mismatch between the return and the Annual Information Statement or Form 26AS, large transactions that are not explained, non-filing, and reassessment of income that escaped assessment.

Types of notices

An intimation under Section 143(1) is a computation after processing the return. A notice under Section 143(2) begins scrutiny. Reassessment starts with proceedings under Sections 148A and 148, and a demand notice under Section 156 asks for payment.

Replying

Respond within the time stated, through the income tax e-filing portal, with supporting documents. Most assessments are now faceless and electronic, so every reply should be complete and kept on record. An extension can be requested in writing.

Appeals

An assessment order can be appealed to the Commissioner of Income Tax (Appeals) within thirty days. A stay of recovery can be requested while the appeal is pending, and a further appeal lies to the Income Tax Appellate Tribunal. Time limits are strict, so seek advice early.

Frequently asked questions

What if I missed the reply date?

File the response as soon as possible with reasons and ask for the matter to be considered. If an appeal is late, a request for condonation of delay can be made.

Is a notice always a sign of a problem?

No. Many notices ask for a clarification or a correction of a mismatch, and can be resolved with a clear reply.

Should I consult a chartered accountant or an advocate?

A chartered accountant usually prepares the figures, and an advocate can help with legal notices, reassessment questions and appeals. Many matters benefit from both.

Discuss with Advocate Aayush Agarwal

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