PROSPERR.IO

Getting a notice from the Income Tax Department isn't exactly pleasant. The envelope arrives, or these days an email pops up. Inside is a formal communication referencing Section 142(1).

First reaction? Usually panic. Second thought? What did I do wrong?

Here's the thing. A Section 142(1) notice doesn't mean you're in trouble. It's not an assessment order. Not a penalty. Not an accusation. It's the department asking questions. They're reviewing your return and something needs clarification. Could be simple documentation. Could be details about a transaction. Could be routine verification.

Understanding what Section 142(1) covers, why notices get issued, and how to respond makes the difference between resolving things smoothly and watching it escalate.

What Section 142(1) Actually Says

Section 142(1) gives the Assessing Officer (AO) power to require a taxpayer to provide information, documents, or attend office for an inquiry. That's the legal framework in simple terms.

The AO can ask for this when they're making an assessment. Assessment means they're reviewing your income tax return and determining whether the tax you paid is correct. During that process, they might need additional information that wasn't in your original return.

The notice can ask for three things:

• Production of books of accounts or documents
• Submission of specific information
• Personal attendance before the AO

For most salaried people, personal attendance is rare. Usually it's about submitting documents or providing written explanations.

Why These Notices Get Issued

Several situations trigger Section 142(1) notices:

• Income mismatches: Form 26AS shows different income than your return. Employer reported ₹8 lakh, you showed ₹7.5 lakh. Bank reported ₹80,000 interest, you showed ₹60,000. AO wants to know why.
• High-value transactions: Bought property worth ₹50 lakh but declared income is ₹6 lakh annually. Large cash deposits. Source of funds questions arise.
• Claimed deductions without details: Claimed ₹1.5 lakh under 80C but didn't specify investments. HRA claimed without rent receipts. AO needs documentation.
• Business income complications: Business losses shown. Presumptive taxation but inconsistent turnover. Expenses without bills trigger scrutiny.
• Random selection: Sometimes returns get picked for verification randomly. Nothing wrong necessarily just statistical sampling.

What the Notice Typically Contains

The format is fairly standard. Notice will have:

1. Document Identification Number (DIN): Every genuine notice must have a DIN. This is your first verification step—confirm the DIN is valid by checking on the e-Filing portal under "Verify DIN." Prevents falling for fake notices.
2. Assessment Year: Which year's return is being questioned. AY 2024-25 means income for FY 2023-24.
3. Specific questions or document requests: The AO lists exactly what they want. Could be bank statements for certain months. Could be rent receipts. Could be written explanation of a specific transaction. Read this section carefully it tells you exactly what to provide.
4. Deadline for compliance: Usually 15 to 30 days from the date of notice. Sometimes extensions are possible, but you need to request them before the deadline expires.
5. Consequences for non-compliance: The notice mentions what happens if you don't respond. Typically best judgment assessment and potential penalties.
6. Mode of service: How the notice was served—email to registered address, physical mail, or through registered post.

How to Verify if the Notice is Genuine

Fake notices exist. Before panicking, verify:

Check the DIN: e-Filing portal → Services → "Verify Statutory Regulatory Compliance" → Enter DIN. System confirms if genuine. No valid DIN? Fake.

Check grammar: Official notices have proper formatting. Spelling mistakes or odd phrasing? Red flag.

Email address: Official communication from @incometax.gov.in. Random Gmail/Yahoo? Fake.

Payment demands: Department doesn't demand instant online payments or bank passwords.

Cross-check Compliance Portal: compliance.incometax.gov.in shows all genuine notices. Not there? Not real.

How to Respond

• Don't ignore it: Leads to best judgment assessment and penalties.
• Read carefully: What exactly are they asking for?
• Gather requested documents: Collect everything mentioned.
• Write a covering letter: Explain what you're submitting, address each point.
• Upload correctly: e-Filing portal → Pending Actions → Submit response. Keep acknowledgment.
• Meet deadline: Can't make it? Request extension BEFORE deadline expires.

Common Document Requests and How to Fulfill Them

Real Scenario: Income Mismatch Case

Here's how this typically plays out. Someone files their return showing total income of ₹7.5 lakh. Form 26AS shows ₹7.8 lakh (employer reported ₹7.5 lakh salary plus ₹30,000 interest from bank).

The taxpayer forgot to include that ₹30,000 interest. AO sends Section 142(1) notice asking for clarification about the ₹30,000 difference.

Proper response: Submit bank statement showing the ₹30,000 interest (confirming it's real income), acknowledge it was inadvertently missed, either file revised return including the ₹30,000 or offer to pay tax on it directly during assessment.

Wrong response: Claiming the bank made an error when Form 26AS clearly shows TDS was deducted on that interest. Or arguing it's not taxable when it clearly is. Or worst ignoring the notice entirely.

The first approach usually results in assessment where ₹30,000 is added, tax calculated, interest charged for delayed payment. Done. Second approach leads to protracted back-and-forth, possible penalties, and the same result eventually plus more hassle.

Timeline and Deadlines

Notices come with deadlines usually 15-30 days, sometimes 7 days urgent cases. Missing it triggers best judgment assessment.

Need more time? Request extension BEFORE deadline through e-Filing portal → "Request for Adjournment." Explain why and when you'll submit. AOs generally grant one reasonable extension.

Missed deadline? Submit anyway quickly. Better late than never if assessment order hasn't been passed.

What Happens After You Respond

• Satisfied: Assessment proceeds normally. Matter closed.
• Needs more: Another Section 142(1) for additional details. Normal if first response incomplete.
• Not satisfied: AO adds income or disallows deductions. Draft order, you file objections, final order. Can appeal if you disagree.
• Best judgment: Only if you didn't respond. AO estimates income unfavorably. Challengeable through appeal.

Consequences of Not Responding

Best judgment under Section 144: AO estimates income unfavorably. Showed ₹8 lakh but bought ₹40 lakh property? Might assess ₹45 lakh income.

Interest: Sections 234A/B/C from original due date. Adds substantially.

Penalty 271(1)(b): ₹10,000 per non-compliance failure.

Prosecution Section 276D: Rare but possible up to one year imprisonment for deliberate non-compliance.

Future impact: PAN flagged as non-responsive. Future scrutiny is likely.

Conclusion

Section 142(1) is the department's way of saying "we need more information to process your assessment." Nothing more dramatic than that in most cases.

Verify the notice is genuine using DIN and portal checks. Read carefully to understand exactly what's being requested. Gather documents methodically. Respond within deadline or request extension before deadline expires. Keep records of what you submitted.

Most Section 142(1) situations resolve smoothly when taxpayers respond properly with requested information. The problems come when notices get ignored or responses are incomplete.

Think of it as a conversation with the tax department. They asked a question. Answer it clearly, back up your answer with documents, and the conversation moves forward. Don't answer, and they'll proceed without your input which rarely works in your favor.

For complicated situations business income queries, capital gains calculations, large unexplained transactions—professional help from a CA makes sense. The cost of consultation is minimal compared to potential tax, interest, and penalties from mishandling the response.

Stay calm, respond properly, provide documentation. That's the formula for dealing with Section 142(1) notices.

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Frequently Asked Questions

Q1: Received Section 142(1) notice but all information was already in the return I filed. Why am I getting this notice?

Even if you filed everything correctly, the AO might need additional documentation or clarification. Your return might show ₹1 lakh HRA claimed, which you calculated correctly, but the AO wants to see actual rent receipts and rent agreement to verify. Or you reported capital gains with proper computation, but the AO wants original purchase and sale documents. Sometimes it's random scrutiny—your return got selected for detailed verification even though nothing is wrong. Respond by providing the requested documents with a polite explanation that information was reported in the return, and here's the supporting documentation.

Q2: The deadline in the notice is impossible to meet—documents are with previous employer who's unresponsive. What should be done?

Immediately file a request for extension through the e-Filing portal before the deadline expires. Explain the specific difficulty—"Form 16 for AY 2023-24 was issued by previous employer XYZ Limited, have requested it but not received despite multiple follow-ups, require 30 additional days." Most AOs grant reasonable extensions for genuine hardships. Meanwhile, keep pursuing the employer through written emails (creates proof of effort). If employer still doesn't respond, file a complaint with the employer's jurisdictional AO mentioning their non-cooperation. Submit whatever partial documentation you have with an explanation about what's missing and why.

Q3: Can someone represent the taxpayer instead of responding personally, especially if the notice asks for personal attendance?

Yes, you can authorize a Chartered Accountant, tax advocate, or other tax professional to represent you. File Form 11A through the e-Filing portal authorizing them as your representative. When notice requires personal attendance, the authorized representative can appear on your behalf in most cases. Some situations might still require your personal presence, but the AO generally accepts representation. Make sure the authorization is filed before the hearing date. The representative should carry authorization letter, their professional enrollment details, and all relevant documents.

Q4: Responded to Section 142(1) notice but haven't heard back from the AO in two months. Should another submission be made?

Track the status on the e-Filing portal under "Pending Actions" or "View Filed Response." If it shows as submitted and under process, the AO has received it and is reviewing. No need to resubmit—that creates duplicate records. If you're concerned about timeline, you can send a polite follow-up through the portal's communication module asking for status update, referencing your submission date and acknowledgment number. Assessment proceedings have their own timelines, and AOs handle multiple cases. Two months isn't necessarily a red flag. However, if assessment order is passed without considering your response, that's grounds for appeal.

Q5: Notice mentions Section 142(1) but also references Section 143(2). Are these different, and does response process change?

Section 143(2) is a scrutiny notice issued after the AO decides your case needs detailed examination. Section 142(1) is usually an interim information request during any assessment. Sometimes both get issued together—the 143(2) notice establishes that scrutiny assessment is happening, and 142(1) lists specific information needed for that scrutiny. Response process is similar—provide requested documents, explanations, attend hearings if asked. However, 143(2) scrutiny is more comprehensive and serious than simple 142(1) information requests. Definitely advisable to engage a CA or tax professional when both sections are invoked together because it indicates the department is doing a detailed assessment of your return.