Income-Tax Notices: What Each One Means and How to Respond
Most communication from the income-tax department is routine and system-generated. Panic is the wrong first reaction; so is ignoring it. The practical skill is identifying which notice you are holding, because the response — and the deadline — differs for each.
Intimation under section 143(1)
This is the processing summary, not an assessment. It compares your return with the department's own records and shows either agreement, a refund, or a demand.
When the figures differ, the cause is usually one of a few things: TDS claimed but not reflected in 26AS, a deduction disallowed for want of a valid claim, an arithmetic difference, or income appearing in AIS that the return omitted.
If the intimation is wrong, file a rectification request under section 154. If it is right and you owe tax, pay it — a 143(1) demand does not go away on its own and will be adjusted against future refunds.
Defective return under section 139(9)
The return has been filed but is treated as incomplete — commonly unfilled mandatory schedules, audited accounts not reported, or a mismatch between income declared and taxes claimed.
You are given a window to correct and resubmit. A defect left uncured means the return is treated as never filed, with every consequence that follows, including lost carry-forward of losses.
Notice under section 245
This is an intimation that a refund due to you is being adjusted against an outstanding demand from an earlier year.
Respond even if you agree. If you disagree, say so on the portal with reasons and evidence — old demands frequently sit on the system after they have been paid or reduced in appeal. Silence is read as agreement and the adjustment goes through.
Notice under section 142(1)
A request for information, accounts or a return that has not been filed. It is the start of scrutiny groundwork, and response quality matters here more than anywhere else.
Answer exactly what is asked, attach the documents referred to, and keep the submission consistent with what you filed. Volunteering unrelated material invites questions no one had asked.
How to respond well
- Read the section and the assessment year before anything else. Half of all confusion is a notice for a year the taxpayer was not thinking about.
- Check the deadline on the notice itself, not from memory.
- Respond on the e-filing portal, under the same PAN, and keep the acknowledgement.
- Reconcile first, reply second. Pull 26AS, AIS and your own ledgers, and work out what the department is seeing.
- Never let a deadline lapse for want of documents. File what you have, state what is coming, and ask for time.
Practical points
- Keep the registered email and mobile on the portal current. Notices are served electronically; non-receipt because of a stale email is not a defence.
- Check the portal's pending-actions tab periodically rather than waiting for an email.
- A demand you intend to contest should still be acknowledged, with a stay or rectification sought — it stops recovery action starting quietly.
Received a notice and unsure what it asks for? Talk to Kunal P Shah & Co.