Easy Guide to e-Notices and Their 6 Types Under Income Tax

With the advancement of technology, most communications from the Income Tax (IT) Department are now sent to the taxpayer’s registered email address. In Venad Properties Pvt. Ltd. vs. Commissioner of Income Tax (2013) 212 Taxman 20, the Delhi High Court held that the purpose of issuing a notice is to inform the assessee about the proceedings and the date of hearing. Once the concerned party receives the notice, the mode or method of service becomes irrelevant.

Ignoring notices sent through departmental emails or registered post can be expensive, as it may attract an income tax penalty of ₹10,000 for each default. Depending on the seriousness and validity of the case, continued non-compliance may also lead to prosecution.

Latest Update

While dismissing a writ petition, the Madhya Pradesh High Court ruled that an income tax notice issued under section 148A(b) can only be contested through the statutory remedy.
As per a Delhi ITAT ruling by Judicial Member Shri Challa Nagendra Prasad and Accountant Member Shri Pradip Kumar Kedia, a cost of ₹2,000 was imposed for ignoring an income tax notice.

Common reasons for receiving income tax notices include late filing of returns, deliberate misreporting of long-term capital gains from listed equity shares and mutual funds, non-disclosure of income, investments made in a spouse’s name, high-value transactions, tax evasion, and issues relating to previous assessment years.

In recent years, under “Project Insight,” the Income Tax Department has become increasingly technology-driven. Using data analytics and artificial intelligence, it tracks financial and non-financial transactions and cross-verifies them during the processing of Income Tax Returns.

Types of Income Tax e-Notices

As per government provisions, there are six types of income tax e-notices. Below is a brief explanation of some of them along with the relevant CBDT sections.

Defective Return Notice Under Section 139(9)

An Assessing Officer may issue a notice under section 139(9) if the return filed by the taxpayer is considered defective. This notice provides an opportunity to rectify errors, submit missing information, and correct the return within 15 days from the date of intimation, or within an extended period if allowed.

Preliminary Inquiry Notice Under Section 142(1)(i)

A notice under section 142(1)(i) may be issued to a person who has not filed an income tax return before the end of the relevant assessment year. Through this notice, the Assessing Officer requires the individual to file the return. Such notice is generally issued after the expiry of the prescribed due dates.

Notice-cum-Intimation Under Section 143(1)

The Assessing Officer may issue a notice-cum-intimation under section 143(1) stating that the filed return has been processed as the final assessment for that year. It may reflect a refund of excess tax paid after adjustment of dues, or raise a demand due to short payment or non-reporting of income beyond the taxable limit. However, the tax department may still issue notices under other sections seeking additional details. This intimation is usually sent within nine months from the end of the financial year in which the return is filed.

Notice for Commencement of Scrutiny

This is a follow-up notice issued for a return filed under section 139 or in response to a notice issued under section 142(1). If the Assessing Officer is not satisfied with the income or loss declared in the Income Tax Return, the officer may require the taxpayer to appear in person or submit supporting documents to justify the claims made. This notice must be issued on or before the expiry of three months from the end of the financial year in which the return is filed.

Income Escaped Assessment
A notice under section 148 may be issued when the Assessing Officer disagrees with an earlier assessment and believes that certain income has escaped assessment. This results in the reopening of a completed assessment. However, the officer must have valid reasons for reopening the case and must record those reasons before issuing the notice.

More Penalty/Fine Under Income Tax

The Assessing Officer may issue a notice under section 156 to recover outstanding tax or penalties after completing the assessment. The taxpayer is required to pay the specified amount within 30 days from the date of receipt of the notice. Except in certain situations, no specific time limit is prescribed. If you receive an email from the Income Tax Department, do not panic or ignore it. Take printouts, verify its authenticity on the Income Tax e-portal, understand the contents carefully, and take the necessary corrective steps.

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