26 Nov 2021
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What is Section 143(1) Income Tax Notice?

Everyone falling under the taxable income group must file an income tax return every financial year. Once the taxpayer files his/her returns, the Income Tax Department would process the return and ensure there are no errors. A summary assessment can be completed under Section 143(1) of Income Tax Act without calling the assessee in case of minor errors in the income tax returns. Furthermore, the IT Department sends an Income Tax Notice or Letter of Intimation to the assessee under Section 143 of Income Tax Act. If a taxpayer receives this notice, he or she can try to understand the Income Tax Notice and comply with the requests shared by the Tax Officer.

Let’s understand what an Income Tax Notice is under Section 143(1) of the Income Tax Act.

When is Section 143(1) Tax Notice Issued?

According to Section 143(1) of Income Tax Act, a letter of intimation can be issued during the summary assessment of the ITR. The issuance of Section 143(1) notice is wholly computerised and requires no human intervention. Unlike a scrutiny assessment, the Income Tax Department would not call the taxpayer for more information or documents during this summary assessment.

Summary Assessment Under Section 143(1) of the Income Tax Act

An Income Tax Notice will be issued under Section 143(1) in any of the following cases after the computerised verification of the filed income tax return:

 

  • Any arithmetic error

  • An incorrect claim

  • Disallowance of the claimed loss

  • Disallowance of the expenditure mentioned in the audit report but not considered while computing the total income

  • Disallowance of deductions claimed under Sections 10AA, 80-IAB, 80-IE, 80-ID, and/or 80-IC since the ITR is furnished post the due date mentioned under Section 139(1)

  • Addition of income appearing in Form 26AS, Form 16A, or Form 16 that has not been included while evaluating the total income in the return

  • Inconsistent information with another entry of the same or some other return

  • Information required to support an entry/claim has not been provided

  • If a deduction exceeds the stipulated limit

Responding to the Income Tax Notice

When you get the letter of intimation, it is best to verify whether the notice pertains to your return and whether the data is relevant to the financial year. Once you have confirmed that it is pertinent to you and your latest return, you must try to identify the errors in your ITR. These errors can be rectified by filing a revised return. So, log into the official income tax e-filing website and file a revised return.

However, you can apply for the online rectification under Section 154(1) if you disagree with the adjustments suggested by the computer system.

Time Limit

A taxpayer can assess a Section 143(1) notice within a year from the end of the financial year in which the income tax return is filed. For example, if a taxpayer has filed returns for the year 2020-21, he must receive a letter of intimation by March 31, 2022. If the assessee does not receive a notice before the expiry date, it means that no adjustments are required to be made by the taxpayer.

Process of Responding to the Income Tax Notice Under Section 143(1)

Responding to the income tax notice is imperative. As per Section 143(1) of Income Tax Act, your ITR will be processed only after you make the requested adjustments in the letter of intimation.

Here’s the process of responding to the Income Tax Notice under Section 143 of the Income Tax Act.

 

Step 1: Log into your account on the official Income Tax Department e-filing website

 

Step 2: Click on the ‘E-Proceedings’ tab and select the e-assessment

 

Step 3: Go to Prima Facie Adjustment u/s 143(1)(a)

 

Step 4: Here, you can see the details mentioned in the Income Tax Notice. Click on the ‘Submit’ button to start the process of sharing a response

 

Step 5: Once you click on ‘Submit’, the website will provide you with a list of all mismatches identified by the computerised system. Click on the drop-down option provided next to the ‘Response’ and submit a response.

 

Step 6: If you have any specific explanation for a mismatch, include the same in the remarks section

 

Step 7: Share supporting documents regarding the mismatched entries before you submit your response

 

Step 8: Click on the ‘Submit’ button. Once the response is successfully submitted, you will receive an acknowledgement.

FAQs on Section 143(1) of Income Tax Act

  • ✔️What is the preliminary assessment?

    Preliminary Assessment a.k.a. Summary Assessment is a process of assessing income tax returns via a computerised system. It notifies the taxpayer of arithmetic errors, incorrect claims, disallowance of claimed losses, deductions that exceed the threshold, and more.

  • ✔️How does CPC process returns?

    The CPC processes returns to ensure that there are no basic errors in the file. It then generates an intimation under Section 143(1).

  • ✔️What are tax adjustments?

    Assessees can deduct certain expenses, contributions, payments, and more from their total income. The process of deducting income tax exemptions is called tax adjustment. 

  • ✔️What is Section 143(1) intimation?

    Section 143(1) intimation is a notice generated by a computer system, which points out the basic errors in your income tax returns.

  • ✔️Can I revise my ITR after Section 143(1) notice?

    Yes, you can revise your income tax returns after receiving a letter of intimation under Section 143(1) of the Income Tax Act.