Income tax notice/reply/appeal

Income tax notice/reply/appeal

Under section 143(3) of the Income tax act, which deals with scrutiny Assessment. The notice under this section is received by the assessee where the Income tax department is doubtful about the authentication of the income or has information regarding income suppression. The scrutiny is made to confirm the genuineness and correctness of various claims, deductions etc made by the tax payer in the return of income.

If the tax department while processing your ITR assesses that more tax is due from you than paid and declared in your return, then you would normally get a demand notice. You will receive the intimation regarding the same via email and SMS under section 143 (1). You will find the tax demand notice on your online account on the e-filing website. According to the current income tax laws, the time limit to reply to this notice is 30 days. If you do not respond to the notice within the stipulated time period, the department can take action against you.

Income Tax Appeal:

Under Income tax Act, section 246A, the order against which an appeal can be filled before the commissioner of Income tax (Appeals). All appeals have to be made to the commissioner of Income tax (appeals) who is considered to be the first appellate authority. Under the following circumstances an appeal can be made:

  1. When a taxpayer is served with an order where he is not liable to pay tax under the Income tax Act.
  2. Under section 143(1)/(1B), when a taxpayer is issued a notice where Income remitted in the returns of income has been adjusted.
  3. Under section 200A(1),  when a taxpayer is issued with a notice where the filed statements have been adjusted.
  4. When an assessment order has passed under section 143(3) other than cases when an order has passed under the Dispute Resolution Panel.
  5. Under section 144, when an assessment order has been passed.
  6. According to section 150, when an order has been issued.
  7. Under section 92CD (3), when an assessment or reassessment order has been passed.
  8. When a rectification order has been passed under section 154 or section 155.
  9. When the taxpayer is considered to be an agent of non-resident under section 163.
  10. When an order has been passed by the Joint commissioner under section 115 VP (3)  that declines the approval to opt tonnage tax scheme for qualifying shipping companies.
  11. According to section 237, when an order has been issued for the refund.




How to file Income tax Appeal/ Income tax appeal procedure:

The taxpayer must submit an application in Form 35 to appeal an income tax assessment. The commissioner of Income tax (Appeals) schedules a date and place for hearing the appeal, on the submission of Form 35. The appointed date and place will be announced to the taxpayer and to the assessing officer by issuing a notice to both the parties. The taxpayer and the Assessing officer can appear personally or through a representatives during the appeal. The commissioner of Income Tax ( Appeals) hears the appeal and postpones the appeal from time to time (if required) he /she would also make inquiries for the appeal and directs the Assessing Officer to conduct further inquiries and submit the report. The Form of the appeal has to be signed and verified by the respective personnel.

Income Tax Appeal Fees:

  1. By the Assessing officer, the total income determined is less than or equal to Rs 1,00,000, the appeal fees is Rs 250.
  2. By the Assessing officer, the total Income determined is more than Rs 1,00,000 but less than Rs 2,00,000 the appeal fees is Rs 500.
  3. By the Assessing officer, the total income determined is more than Rs 2,00,000 the appeal fees is Rs 1,000.
  4. For other appeals the fee would be Rs 250.

Reply to Income Tax Notice:

Steps to respond to a tax demand notice using the e-filing website:

  1. Login to your account on the e-filing website by entering your credentials : User ID, password, and captcha code.
  2. Click on the e-file tab and select ‘Response to outstanding Tax Demand’ option.
  3. An outstanding tax demand notice will appear on your screen with details such as assessment year (AY), section code (under which the notice has been served), demand identification number, etc.
  4. Click on ‘submit’ in the response column for the appropriate AY to submit your response. The assessee has to select one of these options:
  • Demand is correct
  • Demand is partially correct
  • Disagree with demand.
  • Demand is not correct but agree for adjustment.

Enter the necessary details and click on ‘submit’.

A transaction ID will be generated once the information is successfully sent to the department. You should check your account every 10-15 days once you have submitted your response to know the department’s response.