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Introduction:

All individuals with taxable income are required to file an income tax return each financial year. After filing, the income tax department processes the return to check for errors. If errors are minor, a summary assessment under Section 143(1) can be completed without contacting the assessee. Hence, notices under Section 143(1) are the most common type received from the Income Tax department. Upon receiving such a notice, taxpayers can take steps to understand it and comply with the tax officer’s request without panicking. In this article, we delve into income tax notices under Section 143(1) in detail.

Intimation under 143(1):

• A Letter of Intimation under Section 143(1) is a communication from the Income Tax Department to a taxpayer following the preliminary assessment of their income tax return. This letter is generated by the automated system at the Central Processing Centre (CPC) and aims to inform the taxpayer of the results of this preliminary assessment, encompassing the following aspects:
• The system checks the regression for statistical errors such as miscalculations, discrepancies, or inconsistencies in the numbers provided.
• The system assesses the tax calculations to verify their alignment with the applicable tax rules and rates.
• It verifies the absence of inconsistencies or contradictions within the return, such as ensuring that the total income, deductions, and tax liability figures match the details provided in the return.
• The CPC also examines tax returns to confirm the accuracy of taxes due.
• If any apparent errors or discrepancies are discovered in this initial assessment, the taxpayer is advised by a section 143(1) notice. This communication generally includes details of errors or discrepancies identified, tax corrections (if applicable), and any changes to the refund
• If the taxpayer disagrees with the findings or believes that further investigation is necessary, they have the right to respond to the report or request a full assessment under the relevant provisions of the Tax Act.

Centralized Processing Center(CPC):

• The CPC project looked at the benefits to citizens and the tax sector. For citizens, it provided a faster and more continuous baseline process for their return, while relieving the department of the burden of manual baseline assessments, and allowing them to focus on core activities
• While any communication from the income tax department typically triggers anxiety among taxpayers, Section 143(1) intimation is not a cause for alarm. In this article, we will delve into the details of the intimation sent under Section 143(1) to assist taxpayers in confidently handling such communications.

When can receive an Intimation under Section 143(1):

• Any assessee shall receive notice under section 143(1) when his return is duly processed.
• As mentioned, it is an automated system that verifies the accounts, compares the information in the department with the information in the report, ensures compliance with provisions of income tax law , was a comparative report.
• If the taxpayer overpaid, the report will mention the refund. However, if the excess amount exceeds Rs. 100 .
• If the tax paid by the taxpayer is insufficient, the notice will specify the amount of demand and provide a challan for making the payment.
• It’s a straightforward acknowledgment that the filed ITR is consistent according to the Assessing Officer.

Password for Intimation:

• The password for accessing information obtained under Section 143(1) is usually derived from your PAN (Permanent Account Number) and date of birth.
• Information obtained under section 143(1) is password protected. The password for ITR details will be your PAN (in lower case) followed by your date of birth in DDMMYYYY format with no spaces.
• For example: Assuming your PAN is MNOPQ2233E and the date of birth is 01/01/2005, the password to open the intimation will be “mnopq2233e01012005”.

Preliminary Assessment:

The preliminary assessment under Section 143(1) relates to electronic processing by the Central Processing Center (CPC) of the Income Tax Department. The purpose of this automatic check is to ensure that the data provided in the taxpayer’s return has been compared with the departmental records, including information from sources such as Form 26AS, TDS returns, and so on about Subsequently, a Section 143(1) report is prepared on the basis of this assessment.

Time Limit:

The time limit for filing a section 143(1) notice is one year from the end of the financial year in which the application is made. If the taxpayer does not receive any information during this period, it means that no tax adjustment has been made.

Nature of Adjustments:

• Under Section 143(1) of the Income Tax Act, the income tax department conducts a preliminary assessment of the taxpayer’s filed return, which may involve making adjustments to correct any apparent errors or discrepancies.
• The adjustments made under Section 143(1) encompass:
• Any incorrect claims evident from the information provided in the return may be adjusted. This encompasses situations where a claim in the return is inconsistent with other entries or where there is an apparent discrepancy between items in the return.
• Expenses identified in the audit report may be prohibited but excluded from the return.
• The tax department may disallow the set-off of losses from previous years if the return was filed after the specified due date.
• Adjustments are made for any arithmetic errors in the return, such as mathematical mistakes in calculations.

Steps for Taxpayers after  Receiving a Section 143(1) Notice:

• As a first step, check the specifics of the section 143(1) notice to ensure that the form matches your return and that the information provided is the same financial year as specified in section 143(1). ) of the report are consistent.
• Verify the name, PAN, address and e-filing sanction number of the person to whom the information was submitted for the year under review.
• If you identify any mistakes in your filed return from the 143(1) intimation and they can be rectified by filing a revised return, please proceed by logging into the income tax e-filing website.
• However, if you believe that no error has been made and you disagree with the changes made by the CPC/computer system, you can submit an online request for rectification under section 154(1) to rectify the error found under section 143(1). ) in the report.
• Additionally, submit your response through the e-filing portal regarding any tax demand, indicating whether you agree or disagree with it.
• If you are not satisfied with how CPC is handling your rectification return, you can also file a complaint online or you can contact your assessing officer. If the CPC or your assessing officer has not acted satisfactorily, you have the right to lodge a complaint with the Income Tax Ombudsman.

Process for Responding to Notice under Section 143(1):

• Follow the steps below to respond to an income tax return under section 143(1):
• Log in to your account on the Income Tax Department’s e-filing website.
• Click on  E-Proceedings tab and select E-Assessment/Proceedings.
• Select “Prima Facie Adjustment u/s 143(1)(a).”
• You will see  details of the notice received. Click on Submit to begin the process of submitting your response.
• You will then see a list of all detected differences. Click the drop-down next to “Response” to submit your response to the discrepancy.
• If you have any specific information or explanation, enter it in the justification or remarks section.
• Submit any supporting documentation regarding the discrepancy before finalizing the response.
• Click “Submit”. Upon submission, you’ll receive an acknowledgement.

Conclusion:

Section 143(1) empowers the Department to issue a notice to individual or corporate taxpayers for non-compliance with tax laws, requiring information provision or payment. It may also necessitate taxpayer appearance or other actions. Failure to comply may result in the  penalties. If you receive an Income Tax Demand Notice under Section 143(1), it’s advisable to seek advice from your tax attorney.