Inquiry Notice before Assessment
Section 142(1) of income tax act states that inquiry notice before assessment. And this notice can be issued by assessing officer (A.O.) to any person.
Further, notice under section 142(1) of income tax act is issued without any time limit. Notice under section 142(1) to be issued electronically to facilitate E-Assessment.
When the notice under section 142(1) of income tax act is sent to assessee ?
There are two situation where notice under section 142(1) is sent to assessee i.e.
- If return of income is not furnished under section 139(1) .
- And return of income is furnished under section 139(1) and several important information is missing.
Lets elaborate above situations
If return of income is not furnished under section 139(1)
The notice is sent under section 142(1) of income tax act requiring the assessee to file return if he has not furnished the return of income.
If return of income is furnished under section 139(1) several important information is missing
The notice under section 142(1) of income tax act is sent in case assessee has filed return on due time and call for details and documents from assessee if required.
And this notice can also be served if assessing officer finds various required information is missing from assessee return.
For instance Assessing Officer will ask to furnish such information in writing , including a statement of assets and liabilities etc.
What is the purpose of sending notice under section 142(1) of income tax act?
Notice under this is issued on the following grounds:
1.To furnish Return of income:
The income tax department will ask assessee to file return of income if he has not filed return of income within stipulated time period or before the end of relevant assessment year. The income tax department will inform the assessee through a notice under section 142(1).
2. To Furnish documents and accounts:
If return of income is furnished and A.O. finds some documents are missing . Then he (i.e. A.O.) may call upon the assessee to produce required books of accounts and documents as he may deem fit. For instance purchase or sales books etc.
3.To furnish any other information:
A.O. my require assessee to furnish such information in writing and in prescribed manner including statement of assets and liabilities.
What if assessee does not comply with the notice under section 142(1) of income tax act?
If aassesse fails to comply with the notice under this section will attract following:
- If aassesse fails to comply with the notice under section 142(1) of income tax act will result in Best Judgment assessment u/s 144 of income tax act
- Imposition of penalty under section 271A (1)(d) Rs. 10,000 for each default.
- Prosecution under section 276D with imprisonment upto 1 year with or without fine for every day of continuing default.
- Issue of order u/s 132 for search and seizure.
How to deal with notice under section 142(1) of income tax act?
After the assessee has received notice from income tax department , he must identify the reason for notice u/s 142(1).
Further, he should submit required documents under inquiry. And the assessee has been given a reasonable opportunity of binge heard.
In case assessee fails to file return within given period then a proof of delay has to be submitted along with required documents.
Frequently Asked Question
1.What is the penalty for non-compliance of notice under section 142 (1) of income tax act?
A penalty of Rs. 10,000 for each default is levied under section 271A (1)(d) of income tax act.
2. Can i electronically respond to the notice under section 142(1) of IT act?
Yes, Notice u/s 142(1) can be responded to electronically only with the help of ‘e-proceedings’ in the assessees registered e-filing accounts.
3. When can notice under section 142(1) be issued?
There are two situation where notice under section 142(1) is sent to assessee i.e
- If return of income is not furnished under section 139(1) .
- If return of income is furnished under section 139(1) several important information is missing.
4. What is section 142(1) of income tax act?
This section states that inquiry notice before assessment. And this notice can be issued by assessing officer (A.O.) to any person. Further, notice under this section of income tax act is issued without any time limit.
There are two situation where notice under section 142(1) is sent to assessee i.e 1.If return of income is not furnished under section 139(1) . And 2. If return of income is furnished under section 139(1) several important information is missing.
5. What do i do when i receive notice under section 142(1) from income tax department?
When notice is for filing the return, than assessee must file return within specified time.
And if documents is asked to produce , then provide such documents within specified period.
