29 Dec 2021
65 Views

What is Section 142(1) of Income Tax Act?

A notice under Section 142(1) of the Income Tax Act is often served to taxpayers in order to request specific documents and information or to analyse a case more thoroughly. When a person receives a notification under this section, it is usually the first step in a preliminary examination into any differences discovered by an Assessing Officer, who may demand the taxpayer to provide additional proof or information. This notice may be delivered to an assessee before or after their tax return is assessed. It is important for taxpayers to remember that ignoring notices from the Tax Department is not a good idea.

When the return has already been submitted, the notice may be sent to the assessee, requesting additional information and documents to complete the procedure. Before ending the procedure, the taxpayer would be given time to submit the relevant documentation and a fair chance to be heard.

Objective of Section 142(1) of Income Tax Act

The Assessing Officer may serve a notice under Income Tax Section 142 with the following goals in mind:

 

  • To provide a return of income with respect to which an individual is liable to be assessed, where they have not filed their return of income within the reasonable time allowed (which may include returns with regard to their own income or income of another individual for which they are liable to be assessed), for example, in the case of a legal guardian or a deceased person.

  • To produce any papers or accounts that the Assessing Officer may request in order to make a fair assessment.

  • To provide written information on items such as the assessee's statements, such as an account of their assets and obligations for a specific date.

  • It is regarded as mandatory to comply with the notice under Section 142(1) of Income Tax Act.

How to Submit your ITR under Section 142(1) Online?

During the online submission of a response to an Income Tax Notice, keep the following crucial points in mind:

 

  • The notice under Section 142(1) of Income Tax Act would be sent to the taxpayer's e-filing account on the e-filing ITR portal.

  • The Assessing Officer would use Digital Signatures to sign any notices or interactions.

  • The documents or proofs indicated in the Assessing Officer's Income Tax Notice must be presented by the end of business hours on the due date.

  • Unless an extension is granted in exceptional circumstances, the option for submitting requested papers will be terminated seven days after the proceedings are completed.

  • Only under exceptional instances would manual submission of papers be permitted, such as:

  1. To look through the books of accounts.

  2. When it is necessary to conduct third-party investigations.

  3. To interrogate the witnesses.

  4. To hold a personal hearing once the taxpayer has sought one to explain their case or condition.

What are the Consequences of Ignoring the Notice u/s 142(1)?

  • If a taxpayer who gets a notification under Section 142(1) fails to respond within the specified period, the Assessing Officer will make changes based on the information available to him and close the assessment.

  • As a result of failing to respond to the notice and submit the documentation sought on time, the taxpayer would have no other option except to appeal the Assessing Officer's decision under Section 246 of the Income Tax Act.

  • The Assessing Officer, on the other hand, has the authority to treat ignorance of answer as a wilful failure to respond and impose a penalty of ₹10,000 per failing under Section 272A. If the taxpayer fails to comply with any notification made under Section 142(1), Section 143(2), or a direction issued under Section 142, the penalty will be imposed.

Can you get a wrong notice under Section 142(1) from the IT Department?

It is unusual to get an incorrect notice from ITD, although it is possible that the PAN listed in the notice is incorrect.

Frequently Asked Questions (FAQs)

  • ✔️What should I do if I receive a 142(1) notice from the Income Tax Department?

    When the assessee fails to file a return or fails to produce required documents as requested by the A.O., a notice under section 142(1) is issued. When a notice is received, an assessee must file his return within the time frame given in the notice, and if documents and information are requested, the assessee must produce them and provide them to the A.O. within the time frame specified.

  • ✔️What should I expect after filing my ITR under section 142(1)?

    Following the submission of your ITR under section 142(1), you will receive a notice under section 143(2) for scrutiny assessment if A.O requests any information from the documents and information you submitted. If the return is filed in accordance with section, no further action will be taken.

  • ✔️What would happen if I filed a return under Sections 142(1), 153, and 148 without receiving any notice?

    To begin with, no return can be filed under these sections without receiving notice, and if the return has been filed and the particulars are correct, there is no need to be concerned. If you make a mistake while filing the return, a revised return can be filed under section 139(5) if the time limit for filing the revised return has not expired.

  • ✔️When can 142 (1) notification be issued?

    There are two situations in which a notice under section 142(1) can be issued: If you've already filed your return but the assessing officer needs more information or papers; or If you have not yet filed your return, but the assessing officer requires it, you must do so.

  • ✔️Is it possible to receive an incorrect notice ?

    It is unusual to get an incorrect notice from ITD, although it is possible that the PAN listed in the notice is incorrect.