Tag: Section 143(1) of Income Tax

Intimation Under Section 143(1) of Income Tax Act

A tax notice under Section 143(1) of the Income Tax Act can be issued to begin a summary assessment without calling the taxpayer. Section 143(1) notices are issued based on computerized processing of tax returns without any human interface. In a summary assessment, the Income Tax Department would not call for additional information or documents as requested in a scrutiny assessment.

Summary Assessment under Section 143(1)

An income tax notice under Section 143(1) will be issued in any of the following scenarios after automated verification of tax return filed:

  1. Any arithmetical error in the return;
  2. An incorrect claim, if such claim is apparently wrong in the tax return filed;
  3. Disallowance of loss claimed, if return of the previous year for which set off of loss is claimed was furnished beyond the due date for filing income tax return;
  4. Dissallowance of expenditure indicated in the audit report but not taken into account in computing the total income in the return (applicable from AY2017-18);
  5. Disallowance of deduction claimed under Section 10AA, 80-IA, 80-IAB, 80-IC, 80-ID, or 80-IE, if the return is furnished beyond the due date specified under Section 139(1). 
  6. Addition of income appearing in Form 26AS or Form 16A or Form 16 which has not been included in computing the total income in the return;
  7. Information with is inconsistent with another entry of the same or some other return;
  8. Information required to substantiate an entry which has not been provided like donation information;
  9. If any deduction exceeds the statutory limit allowed;

Responding to Tax Notice

Additional tax is payable by the assessee, after making adjustments mentioned below and giving credit to the taxes and interest paid. In such a case, the taxpayer will be asked to pay the amount due within 30 days. Tax is refundable to the assessee, after making adjustments mentioned below and giving credit to the taxes and interest paid.

There is an increase/decrease in the loss declared by the assessee and no tax or interest is payable by the assessee and no interest is refundable to the assessee.

Time Limit

Assessment under section 143(1) can be made within a period of one year from the end of the financial year in which the return of income is filed. Thus the intimation for tax or interest due under Section 143(1) should not be sent after the expiry of one year from the end of the financial year in which return is filed.

Process for Responding to Income Tax Notice under Section 143(1)

The tax notice u/s 143(1) will be sent to the assessee specifying the sum determined to be payable by, or the amount of refund due to the taxpayer. In case there is no sum payable or refundable, the acknowledgement of the return of income will be deemed to be the intimation.

The taxpayer should note that merely because notice is received from the income tax department, it does not mean that it is mandatory for the taxpayer to appear in person before the authorities. In many cases, it shall be sufficient if the person receiving the notice furnishes a response to it in the physical or electronic mode.

If the taxpayer would like to revise the income tax return after receiving a notice under Section 143(1), the assessee must be aware that the deadline for revising the return is 15 days from the date of the notice. If the taxpayer fails to respond in a timely manner to the income tax notice u/s Section 143(1), the income tax return will be processed after making necessary adjustments mentioned in the income tax notice.

To respond to an income tax notice under Section 143(1), follow the steps below:

Step 1: Log in to your account on the Income Tax Department E-Filing website.

Step 2: Click on the E-Proceedings tab and select E-Assessment/Proceedings.

Step 3: Select Prima Facie Adjustment u/s 143(1)(a).

Step 4: You will see the details of the notice received. Click on Submit to being the process of submitting the response.

Step 5: You will now see the list of all mismatches identified. Click on the drop-down next to the Response to submit a response to the mismatch.

Step 6: In case you have any specific information or explanation, enter the same in the justification or remarks.

Step 7: Submit any supporting documents regarding the amounts of discrepancy before you submit your response.

Step 8: Click on “Submit”. Once the response is submitted, an acknowledgement will be provided.

Read more at: Income Tax Department has to send the intimation notice to the taxpayer

Check the following points when you receive an intimation u/s 143(1)

The following are the points that you must check when you receive an intimation u/s 143(1): 

  • The document identification number in the intimation 
  • Name on the intimation 
  • Check whether the deduction claimed under 80C, and sections are considered or not 
  • Income is mentioned under appropriate head 
  • Check whether the income is repeated or not 
  • Check whether any rebate claimed or allowable, or relief u/s 89, 90/90A/91 are considered in the intimation or not 
  • Self-Assessment Tax paid and TDS/TCS claimed Advance Tax paid in the computation by CPC (Central Processing Centre) 

What is the password to open intimation u/s 143(1)?

To open the intimation u/s 143(1) you need to enter the correct password to access the file. The password for these files is your PAN number in lower case and your date of birth in DDMMYYYY format. For example, if your PAN number is MARGK5108Q and your date of birth is 11 October 1984, then the password will be ‘margk5108q11101984’.

FAQs on Intimation Under Section 143(1) of Income Tax Act

  1. How to open intimation u/s 143(1)?To open intimation u/s 143(1) use your PAN and date of birth as password. For example, if your PAN is DARGK6914q, and your birth date is 3rd October 1993, then the password will be dargk6914q03101993.
  2. How will I receive Section 143(1) notice from the IT Department?You will receive the Section 143(1) notice from the Income Tax Department through email with the subject line ‘Your ITR intimation’ and you will also receive an SMS alert informing that intimation notice has been sent to your registered email ID.
  3. How to file rectification for intimation u/s 143(1)?Log in to your income tax portal account to rectify the intimation u/s 143(1) and click on the Service tab. Select the rectification option and choose relevant A.Y. and file.
  4. What to do if there is no mismatch in an intimation u/s 143(1) notice, demand, or refund?If there is no mismatch in an intimation u/s 143(1) notice, demand, or refund, then you need not do anything, as it means that the ITR has been processed successfully.
  5. Is intimation u/s 143(1) an assessment order?No, intimation u/s 143(1) intimates about the processing of the return, and hence, it is not an assessment order.
  6. If I have zero refunds and tax demand, and proper sync on the taxpayer and 143(1) section columns, then do I need to reply to 143(1) intimations?If you have zero refunds and tax demand, and proper sync on the taxpayer and 143(1) section columns, then you need not reply.
  7. Can I revise the income tax return after receiving the intimation u/s 143(1)?Even after receiving intimation u/s 143 (1), you can revise your income tax return by 31 December of the relevant assessment year.
  8. Is the tax assessment order and intimation u/s 143(1) the same?No, the intimation u/s 143(1) and the tax assessment order are not the same.
  9. Can I use intimation u/s 143(1) as address proof?Yes, you can use the intimation u/s 143(1) as an address proof.

Read more at: Income Tax Notice: Know when and to whom the notice of section 143(1) comes, what to do if it comes

Income tax dept mails many taxpayers

Income tax return filed is processed by the CPC – Central Processing Unit. Presently, CPC in Bangalore is responsible for carrying out all primary assessments.

The CPC unit of Income tax department  takes up the ITR for processing  i,e cross checks the details reported in the ITR with the information in hand and sends a notice of intimation under section 143 (1) to the registered email address.
The Income Tax Department processes the income tax return only after they are filed and successfully verified by the taxpayer. The taxpayers are advised to submit their return on time for the speedy processing of the returns.

Income tax return filing

The taxpayers should file their income tax returns by the due date to avoid any late fees and the penalty. The ITR processing starts only with the filing of the return; it can be on time or after the due date. However, it is also advisable to file the returns on time for quick processing.

ITR verification

The department starts the Income Tax Processing only when the return has been successfully verified.

The taxpayer has to verify the return by sending the ITR-V (Acknowledgement) after signing it with a blue ink within 120 days from the date of filing the return.

ITR-V will be physically sent to the Central Processing Center (CPC). Once they receive it, CPC will send an acknowledgement on the registered email ID of the taxpayer.

The taxpayer should correctly mention the email address in the return form as all the communications between him, and the department will take place through that email ID alone. Also, the taxpayer can e-verify the return after filing it instead of sending the acknowledgement physically to the department. It can be done through any one of the following means:

  • net banking
  • aadhaar OTP
  • EVC code through the department’s website
  • giving bank account details on the e-filing website
  • giving DEMAT account details on the income tax e-filing website.

ITR processing under section 143(1)

After the verification of the ITR, the department processes the income tax return and sends the intimation under Section 143(1) of the Income Tax Act, 1961 once the Income Tax Processing is done. The intimation will be sent via an email along with a message to the registered email ID and the mobile number respectively.

CPC processes each e-filed return and generates intimation u/s 143(1). The department compares the data provided in the return by the taxpayer in addition to the records available with the CPC and generates an intimation under section 143(1).

The intimation also carries the detailed calculation of the tax as computed by the taxpayers and the income tax department. The whole process generally takes 30- 45 days from the day of e-verification or the receipt of ITR-V by the CPC.

Status post the ITR processing

Taxpayers are required to decode the ITR intimation. Following are three possible scenarios that the taxpayer may need to understand :

  • Refund determined: If the return filed by the taxpayer is found to be accurate and has a refund claim, the refund is issued to the taxpayers. Generally, the credit of refund process takes about 20-45 days from the date of e-verification of the income tax return. However, if the acknowledgement has been sent physically to the CPC, it may take a longer time.
  • Demand determined: If any discrepancy is found in the taxes paid or the credit claimed, the department issues a demand intimation. The demand has to be paid within a stipulated time mentioned in the intimation under section 143(1).
  • No demand-No refund: The situation where the department accepts the information provided by the taxpayer and gives a green card then the status of the ITR processing turns to ‘No demand No refund’. It means there is no interest or tax payable or refundable by/to the assessee.

Section 143(1) of Income Tax Act 1961- All About Intimation U/S 143(1)

Section 143(1) of Income Tax Act 1961- All About Intimation U/S 143(1)

An income tax return can be either filed voluntarily under Section 139 or on demand by the income tax department under Section 142(1). It is necessary to understand what happens after the taxpayer has filed the return of income.

Income tax department carries out a preliminary assessment of all the returns filed and informs taxpayers of the result of such preliminary assessment. This assessment primarily includes arithmetical errors, internal inconsistencies, tax calculation and verification of tax payment. Such communication to the taxpayer posts the preliminary assessment is called intimation under Section 143(1).

The preliminary assessment is wholly computerised and does not have any human intervention and is delegated to Centralised Processing Centre (CPC).

Initial processing of returns by CPC is completely automated and Section 143 (1) Intimation is also computer-generated record. CPC validates data provided in each tax return with details available with income tax department’s own record (such as form 26AS generated through details provided by collecting banks, form 16, TDS returns etc) and this notice
usually only points out apparent mistakes found out by the mainframe system.

We need to understand the process done by department after return filing completed.

Once the return is filed, total income or loss is recomputed by the computerised system as per the department’s record and provides a comparison with data filed by the taxpayer.

The intimation has two columns: ‘As provided by the taxpayer in the Return of Income’ and ‘As computed under Section 143 (1). Comparison is made for major categories such as (1) income under various heads, (2) Gross Total Income, (3) Deductions under Chapter VIA and (4) tax deducted at source and tax payments by taxpayers in the form of advance tax and self-assessment tax.

Appropriate adjustments are made to income as computed under Section 143 (1) and final tax liability or refund is arrived at.

The adjustments are carried out only after giving an intimation to the taxpayer of the proposed adjustments either in writing or electronic mode i.e., to the email id provided in the income tax return filed.

Response received from the taxpayer within 30 days from the issuance date of intimation will be considered before making the final adjustment and in case no response received within such period, adjustments arrived at initially will be incorporated.

An intimation shall be prepared and sent to the assessee. Intimation of such kind can be received by assessee

  1. Intimation with no demand or no refund – This generally happens if the department has accepted the return as filed without carrying out any adjustments to it.
  2. Intimation determining demand – issued in case of adjustments made under Section 143 (1) due to a discrepancy found and tax liability is arrived at.
  3. Intimation determining refund – issued where any interest or tax is found to be refundable either where no discrepancy is found in the return already filed or after making adjustments as referred to in Section 143 (1) and after giving credit to the taxes and interest paid by the taxpayer.

Time Limit: Section 143(1) intimation has to be sent within one year from the end of the financial year in which return is being filed. However, if a taxpayer does not receive any intimation within such period, it simply means there are no adjustments carried out to the return filed by the taxpayer and no change in tax liability/refund and acknowledgement filed itself is deemed to be Section 143(1) intimation

Total income or loss is computed under Section 143(1) after making the following adjustments:

  • Arithmetical error or Correction in the return
  • Any incorrect claim which is apparent from any information in the return.
  • Disallowance of set off of loss in the financial year which is carried forward from previous years in which return was filed beyond specified due date
  • Disallowance of expenditure indicated in the audit report but not indicated in the return of income.

Any communication from the income tax department creates panic for taxpayers. However, Section 143 (1) intimation is not something one needs to worry about.

Thanks for reading my article “Section 143(1) of Income Tax Act 1961– All About Intimation U/S 143(1)

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