Reply to Income Tax Notice (143(1), 142(1), 148)

Receiving an income tax notice is rarely a reason to panic. Most notices are routine intimation, auto-generated to flag a mismatch, and can be resolved online with a clarification. Some notices, however, are the start of a scrutiny or demand proceeding and require a more formal response. This guide explains the four most common notices, what they ask for, how to reply, and the timelines to follow.

Types of notices

The income tax department issues a wide range of notices, but 90% of taxpayer responses fall under four sections of the Income Tax Act.

Section 143(1) — intimation of assessment

Section 143(1) is a summary assessment done by the Centralised Processing Centre (CPC) without human intervention. The CPC compares your filed return with Form 26AS, AIS, and other databases, and either accepts the return as filed or flags a mismatch.

The intimation is sent as a PDF on the e-filing portal. It can:

• Confirm the return as filed — no action required.
• Propose a demand — you can either pay the demand or file a rectification under Section 154 if you believe there is an error.
• Issue a refund — usually triggered automatically within 3-6 weeks.

How to respond: log in to incometax.gov.in → e-File → Response to Outstanding Demand / Rectification. Submit your explanation with supporting documents (e.g. revised Form 26AS, additional TDS certificates, capital gains statements). The CPC will issue a revised intimation under Section 143(1A).

Timeline: you have 30 days from the date of the intimation to file a rectification. There is no separate fee, but the period is strict.

Section 142(1) — inquiry before assessment

Section 142(1) is a formal inquiry — the Assessing Officer (AO) has specific questions about your return and asks for documents or clarifications. The notice typically asks for:

• Books of accounts (for businesses and professionals).
• Bank statements for the year.
• Copies of specific invoices or agreements.
• Explanations for specific income / deduction items.

How to respond: submit the documents on the e-filing portal under "e-Proceedings" or in person at the AO's office (if asked). Always number your responses, quote the DIN (Document Identification Number) of the notice, and attach a covering letter summarising the response.

Timeline: the notice usually specifies a date (typically 7-15 days from the date of issue, with the option to seek an extension on reasonable cause). Failure to respond leads to a best-judgment assessment under Section 144.

Section 148 — income escaping assessment

Section 148 is the most consequential notice — it is issued when the AO has "information" suggesting that income has escaped assessment. From AY 2021-22 onwards, the AO must conduct a prior inquiry and pass an order under Section 148A before issuing a notice. The notice itself requires you to file a return within 30 days (or 45 days for non-residents).

How to respond:

1. Read the notice carefully — identify the specific allegation (e.g. "TDS of Rs 12 lakh in Form 26AS not offered in return", "foreign assets not disclosed").
2. Reply to the show-cause under Section 148A within the time specified, with documents and a point-by-point defence.
3. If you are satisfied with the AO's order, file the return under Section 148 within 30 days. If not, file an appeal with the CIT(A) within 30 days of the assessment order.

Timeline: 30 days from the date of issue for residents, 45 days for non-residents. Extensions are rarely granted.

Section 156 — demand notice

Once an assessment order creates a tax demand, a notice under Section 156 is issued. This is a "pay up" notice — it tells you the demand amount, the head under which it arises, and the deadline for payment.

How to respond:

• If the demand is correct, pay it through Challan 280 (TDS / TCS) or Challan ITNS 280 within 30 days.
• If you disagree, file an appeal with the CIT(A) within 30 days of receipt. The appeal must be accompanied by a pre-deposit of 20% of the demand (10% in some cases).
• If the demand is below Rs 1 lakh and you do not wish to appeal, you can file a rectification under Section 154.

Timeline: 30 days from the date of service to appeal. Late appeals are condoned only in rare cases where sufficient cause is shown.

General tips for replying

• Always quote the DIN and the date of issue in your response.
• Use the e-filing portal for online submissions — most replies now go through the e-Proceedings module.
• Keep a covering letter that summarises the issues and points to the documents.
• Maintain numbered annexures — every document should be tagged.
• Reply in time — a late reply, even if substantively correct, can lead to a best-judgment assessment.
• Consider engaging a CA for notices under Section 148 and 156 — the cost of professional help is far less than the cost of an adverse assessment.

Common mistakes

• Ignoring the notice — the AO can proceed ex-parte and pass an order that is harder to reverse.
• Replying without proper documentation — the AO will not accept verbal clarifications for material items.
• Mixing up the timelines — 143(1) is 30 days from intimation, 142(1) is by the date specified, 148 is 30 days from issue.
• Not preserving DIN — every notice has a DIN printed on it; this is the unique identifier used to log responses.

FAQ

Can I respond to a notice myself?

Yes, for simple 143(1) and 142(1) notices. For 148 and 156 notices, especially if the demand is significant, professional help is strongly recommended.

What if I receive the notice in my old email / address?

The department considers the notice served if it was sent to the email / address registered on the e-filing portal. Update your address and email in the profile section to ensure future notices reach you on time.

Can I appeal online?

Yes, the e-Appeals module on the e-filing portal accepts appeals under Section 246A / 253. Pre-deposit must be paid through Challan 280 before filing the appeal.

For help responding to a notice, talk to a CA at ABMCO.