All about Intimation under Section 143(1)

The Government has recently introduced CPC 2.0 with the tagline of File Karo Jhat Se, Processing Hogi Pat Se.
 

Now, once the income tax department processes the income tax return (ITR), it sends an intimation notice under section 143(1) of the Income Tax Act. This notice is sent to on registered email address as registered in your e-filing account to inform whether the income tax calculation in the ITR filed matches that of the tax department as per the records/other sources of information they have (such as form 26AS generated through details provided by collecting banks, form 16, TDS returns etc).

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

This process includes the checking of any arithmetical errors, internal inconsistencies, tax and interest calculation and verification of tax payment etc. After processing the ITR, the department sends a communication to the taxpayer which is called Intimation u/s 143(1). However, this is a prima facie check. In future, if the department discovers any additional information regarding your incomes, then they can still send you a notice under the relevant section of the Act asking for further information.
 

Here are the set of Questions that may arise on your mind:

• When will I receive the notice?

Section 143(1) intimation has to be sent within one year from the end of the financial year in which return is being filed. 

• I received a sms intimating that my return has been processed but I haven't received the notice. What to do now?

First of all, it should be noted that  this notice is sent to registered email address as registered in your e-filing account. Also, you should check your spam folder for the same.

You can also find out the communication status from e-filing website in the following manner.

1. Login to https://www.incometaxindiaefiling.gov.in

2. Go to View Returns/Forms >Select Income Tax Returns > Click on Relevant Ack. No. > Download Intimation Order

• Intimation Order is not available at the portal. What to do?

There may be few instances where you haven't received the intimation notice at your registered email id and also the same is not available at  the e-filing portal.

Then, you can request the intimation as follows (applicable only till A.Y. 2016-17):

1. Login to https://www.incometaxindiaefiling.gov.in

2. Go to My Account >Service Request > Request Type : New Request. > Request Category : Intimation u/s 143(1) and then fill up the required details.

• I have received the Intimation, but it says that it's encrypted and requires a password. What is the Password?

Your password will be your PAN in lowercase followed by your date of birth/ date of incorporation. For example, if your PAN is ABCPE1234F and your date of birth is 01 January 1990, your password will be abcpe1234f01011990.

• What type of intimation can I receive?

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 - This is issued in case adjustments are made under Section 143(1) due to a discrepancy found and tax liability is arrived at.

3. Intimation determining refund - This is 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.

• What type of Adjustments are made under Section 143(1)?

The following set of adjustments can be made under Section 143(1):

(i)  any arithmetical error in the return;

(ii)  an incorrect claim, if such incorrect claim is apparent from any information in the return; (The claim of an item in the return which is inconsistent with another entry of the same or some other item in such return)

(iii)  disallowance of loss claimed, if return of the previous year for which set off of loss is claimed was furnished beyond the due date specified under sub-section (1) of section 139;

(iv)  disallowance of expenditure indicated in the audit report but not taken into account in computing the total income in the return;

(v)  disallowance of deduction claimed under sections 10AA, 80-IA, 80-IAB, 80-IB, 80-IC, 80-ID or section 80-IE, if the return is furnished beyond the due date specified under sub-section (1) of section 139; or

(vi)  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:

• What should I do after I received Intimation u/s 143(1)?

As a first step, review certain things in Section 143(1) intimation to ensure document pertains to your return itself and data provided pertain to the same financial year as mentioned in Section 143(1) intimation. Check the name, PAN, address, assessment year for which notice has been sent.

Now, the intimation provides a detailed tabular comparison indicating the data provided the taxpayer and as computed under section 143(1).

In case, the Notice states that There is no Payment due, then you are happy to go, otherwise carry on reading.

You should look for differences (if any) and they can be rectified by filing a revised return.

However, if no mistakes have been made and you do not agree with the adjustments made by CPC/ Computerised system, you can file an online rectification application under Section 154 intimating the correction of mistake appearing in the Section 143(1) intimation. 

However, if taxpayer agrees to the tax demand raised by income tax department after carrying out adjustments as above, taxpayer is required to pay such taxes. However, while paying tax on demand raised under this Section, please choose ‘Tax on regular assessment (400)’ under type of payment in the challan.

• Do I Need to Respond to the Notice?

Once you receive the intimation under Section 143(1), you have 30 days to respond. In case the intimation is also a notice of demand, asking you to pay any additional tax that you owe, you will be required to make the payment within the time limit provided in the notice itself. If you miss the deadline provided, you could be charged one of two penalties:

Under section 220, you will be charged interest of 1% per month for every subsequent month that you delay the payment.

Under section 221, the assessing officer will impose a penalty on you. The penalty amount should not be more than the amount of the pending tax that you are required to pay.

• When will I receive the refund?

If a refund is due to you, the money will be credited directly to your bank account (selected in ITR). Once this is done, the Income Tax department will notify you of the same.

You can also check the refund status at : https://tin.tin.nsdl.com/oltas/refund-status-pan.html

Disclaimer: The views expressed by the author is based on his understanding of law and the prevailing circumstances. Taxpayers are requested to use the views judiciously and author shall not be liable for any gain/loss which might arise by referring his article.

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