Though the deadline for the updated or revised ITR filing is already over, many taxpayers are still awaiting for their refund for their income tax return AY 2025-26. One of the reasons for the refund delay
is the notices being issued to the taxpayers due to a mismatch in ITR or doubtful deduction claims red-flagged by the system. Receiving an income tax notice often causes anxiety among taxpayers, but in most cases, it is a routine communication seeking clarification or additional information.
Here are the types of notice and how to respond appropriately within the stipulated time to avoid penalties, interest, or prolonged litigation:
Common Types of Income Tax Notices
One of the most frequently issued notices is under Section 139(9), which treats a return as “defective”. This usually happens due to missing details such as balance sheet information, incorrect tax payment details, or mismatch in income figures. The taxpayer is given an opportunity to rectify the defect within a specified period, failing which the return may be treated as invalid.
Notices under Section 142(1) are issued when the tax department seeks additional information, documents, or explanations. This can happen even if you have already filed your return. Such notices may also ask a person who has not filed a return to do so. These are essentially information-gathering notices and should be responded to carefully and completely.
Another common notice is under Section 143(1), which is not an assessment notice but an intimation. It informs the taxpayer about arithmetical corrections, mismatches between reported income and data available with the department, or calculation of tax refund or demand. If you agree with the adjustment, no action is required other than paying any demand. If you disagree, you can file a rectification request.
A more serious notice is under Section 143(2), which signals that your return has been selected for scrutiny assessment. This does not automatically imply wrongdoing. Scrutiny can be limited (focused on specific issues such as deductions or capital gains) or complete. The notice requires the taxpayer to substantiate claims made in the return with documentary evidence.
Notices under Section 148 relate to income that the department believes has escaped assessment. These are reassessment notices and are issued after following due process under the law. The taxpayer is required to file a return again and explain why the income was correctly reported earlier or why reassessment is not warranted.
A Section 156 notice is a notice of demand. It is issued when the department determines that tax, interest, penalty, or any other sum is payable. The notice clearly specifies the amount and the time limit for payment.
There are also penalty-related notices under sections such as 270A (under-reporting or misreporting of income) and prosecution-related communications in serious cases involving tax evasion.
How to Respond to an Income Tax Notice
According to tax experts, the first and most important step is not to ignore the notice. Every notice mentions a deadline, and non-compliance can lead to penalties, best-judgment assessments, or further legal action.
“Taxpayers should carefully read the notice to understand the section under which it is issued and what information is being sought. Most notices today are issued electronically and can be accessed through the income tax e-filing portal,” said Gaurav Aggarwal, a Delhi-based CA.
He added that responses should be submitted online through the same portal unless the notice specifically requires physical submission or personal appearance. All supporting documents, such as bank statements, Form 16, Form 26AS, AIS, invoices, or investment proofs, should be uploaded in a clear and organised manner.
In cases where the notice involves technical issues, high-value transactions, scrutiny assessments, or reassessment proceedings, it is advisable to seek an expert’s help. A well-drafted, fact-based response reduces the risk of adverse orders.
“If you agree with a demand raised in a notice, payment should be made within the prescribed time to avoid interest. If you disagree, remedies such as rectification, appeal, or submission of objections (depending on the nature of the notice) are available under the law,” he added.
