One of the commonest issues due to which taxpayers received IT notices in the financial year 2016-17 were reasons elaborated under Section 143(1)(a) of the Income Tax Act, 1961. Bear in mind that a notice under 143(1)(a) is quite distinct from a notice under 143(1) and the two cause vastly different tax consequences.
What is notice under section 143(1)(a)?
An intimation under 143(1)(a) originates at the Central Processing Centre (CPC) and is essentially a direction for clarification of the inconsistencies between income and deduction as reported in your Form 16, Form 16A and Form 26AS.
By which date can I respond to notice u/s 143(1)(a)?
You normally get 30 days to respond to this notice failing which the return will be processed by adopting suitable changes as the Assessing Officer sees fit. You will not be able to argue incorrect estimation at any later stage in this case.
How to tackle a notice under section 143(1)(a)
- You only need to take a look at Part-A of the notice to discover what caused the discrepancy in tax declaration.
For example, in the image above, the taxpayer failed to report income correctly under “Other Income” (INR 111000) and under-reported income from salary (INR 150416) as shown in Form 16/ Form 16A/ Form 26AS.
This is why it is very important that you ensure there is no discrepancy between incomes declared in your return and Form 16/ Form 16A/ Form 26AS. - The other major reason you will receive a notice under this section is claiming deductions not reported in Form 16.
- Now that you understand the reason for this communication you must file a revised return according to the instructions given below and incorporate the necessary corrections. These instructions need to be adapted on a case-to-case basis:
- State the correct salary Income and Other income in the revised return and,
- Submit documentary evidence of deductions claimed in your ITR form only if you have them. Remember that you cannot claim any deduction or exemption from taxable income unless you have supporting documents.
Replying to a notice under 143(1)(a)
- Browse to and login to the official income tax e-filing portal.
- Navigate to the e-Proceeding tab at the header and click on e-Assessment/ Proceedings from the drop-down list:
- After the last step you will see something like the image shown below. Go down to Proceeding name and click on 'Prima Facie Adjustment u/s 143(1)(a)'.
- Next you will be shown particulars of your actionable messages. Simply click on the Reference ID.
- Now you should be able to see a table showing your income classified into appropriate heads as determined by your tax officer:
- You have the discretion to select “Agree” or “Disagree” from the drop-down to the right of each numbered income entry.
- Should you choose to agree then you must file a revised return and pay arrears, if any, by calculating and declaring the corrected figures according to this scheme.
- Should you choose to disagree, however, you will have to provide reasons in the pop-up box that appears plus attach proof of claims that you declared in the original return.
- Should you choose to agree then you must file a revised return and pay arrears, if any, by calculating and declaring the corrected figures according to this scheme.
You will be asked for:
- The TAN of the employer as per Form-16 / Form16-A / 26AS copy.
- In the field, “Deduction made under section”, enter 192 if the only income you intend to correct is salary income. For any other deduction allowed under the act, you must mention the accompanying section of the IT Act.
- The “Amount paid/credited by deductor” is shown in Part A of your Form 16.
- Income / Gross Receipt as per return: State the corrected revenue after accounting for deductions.
- Head of Income / Schedule under which reported in the return: You can look back at your original ITR to verify heads of income.
- Reason – By law only certain reasons are permissible when disputing this notice. These will be visible in a drop-down. You need to be careful and honest here.
- Justification/ Remarks – These are explanatory statements which may not be understood from available options. Post this entry you must attach copies of documents evidencing deductions such as 80C, 80D, 80DD etc.
- Finally click on “Submit” and ensure that you can see an acknowledgement after.
The last thing to remember here is that you must file a revised return following your response. This is crucial!
What time limit is available to revise the return in this situation?
You get 15 days to file the revised return from the date of submitting the response.
You don’t need to be tech wiz to respond to notices. If you’re worried you might make a mistake, it is best to let a tax expert manage your IT notice for you. AllindiaITR also files revised returns when a mistake has already been made in submission.
Comments
3 comments
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