Income Tax News: Without contacting the taxpayer, a summary assessment may be started by issuing a tax notice in accordance with Section 143(1) of the Income Tax Act. Notifications under Section 143(1) are generated through computerised tax return processing, devoid of any human interaction. The Income Tax Department would not request further information or documents in a summary assessment as they would in a scrutiny assessment.
Mathematical Mistakes in the Result
Following automated verification of the filed tax return, any of the following circumstances will result in the issuance of an income tax notice under Section 143(1):
- Any mathematical mistakes in the result
- An inaccurate claim, if it appears that the tax return submitted contains an improper claim
- If the previous year’s return for which the set-off of loss is claimed was provided after the deadline for submitting an income tax return, the claimed loss will be disallowed.
- disallowance of expenses listed in the audit report that were not included in determining the total revenue reported in the return (applying from AY2017–18).
- deductions claimed under Sections 10AA, 80-IA, 80-IAB, 80-IC, 80-ID, or 80-IE may be disallowed if the return is submitted after the deadline set out in Section 139(1)
- Information in conflict with another entry in the same or another return; addition of income appearing in Form 26AS, Form 16A, or Form 16 that has not been included in calculating the total income in the return
- Information needed to support an entry that has not been provided, such as donation information
- Should any deduction surpass the statutory cap permitted
Additional Tax Payment and Modifications
The assessee is required to pay additional tax following the below-mentioned modifications and crediting the taxes and interest paid. The taxpayer will be required to pay the outstanding balance within 30 days in such a scenario. After making the below-mentioned modifications and crediting the tax and interest paid, the assessee receives their refund of tax. The assessee reports a change in their loss, but they are not required to pay taxes or interest and are not eligible for a refund of interest.
Commencement of One-Year Term
A one-year term begins at the end of the fiscal year in which the income return is filed, and assessments under section 143(1) may be made within that time. Therefore, it is not appropriate to send the notice of tax or interest payable under Section 143(1) after a year has passed since the end of the financial year for which the return was filed.
Issuance of Tax Notice under Section 143(1)
The assessee will receive a tax notice under section 143(1) that will detail the amount deemed payable by or the amount of the taxpayer’s refund. If there is no amount due or refundable, the notification will be considered to be the acknowledgment of the income return.
The taxpayer should be aware that they are not required to attend in person before the authorities just because they receive a notice from the income tax department. In many instances, providing a physical or electronic response to the notice by the person receiving it will be sufficient.
Responding to Income Tax Notification under Section 143(1)
Use the procedures listed below to reply to an income tax notification under Section 143(1):
- Visit the Income Tax Department E-Filing website and log in to your account.
- Select E-Assessment/Proceedings by clicking on the E-Proceedings tab.
- Choose Prima Facie Adjustment according to 143(1)(a)
- Details of the received notice will be displayed to you. To begin the process of sending the response, click Submit.
- The list of all detected mismatches will now appear to you. To provide a reaction to the mismatch, click the drop-down menu next to the reaction.
- If you have any further information, please include it in the remarks or justification section.
- Prior to submitting your answer, send in any supporting documentation pertaining to the differences in quantities.
- Press the “Submit” button. Following submission of the response, an acknowledgement will be given.
After receiving a notice under Section 143(1), the taxpayer has 15 days from the date of the notice to amend the income tax return. The assessee must be informed of this deadline. The income tax return will be completed following the necessary changes specified in the income tax notice if the taxpayer does not reply to the income tax notice within the allotted time frame, as per Section 143(1).