Notice from IT Department: Overview

Notice from IT Department: Overview

An income-tax notice is a formal communication from the Income-tax Department requiring you to confirm, explain, or act on specific tax-related information. In 2026, the Department issues these algorithmically — your Annual Information Statement (AIS) is cross-checked against your ITR within seconds of processing, and any mismatch can generate a communication automatically. Each notice type carries a different legal weight, a different statutory deadline, and a different response path. This guide decodes every major notice category — from a routine Section 143(1) intimation to a high-stakes Section 148 reassessment — so you know exactly what you are dealing with and what to do next.

How Notices Are Delivered in 2026: The Digital-First Reality

The Income-tax Department has been almost entirely paperless since 2022. In 2026, every notice, order, and intimation is uploaded to the e-Proceedings tab on the e-Filing portal at incometax.gov.in. Simultaneously, the Department sends an SMS and email alert to your registered mobile and email address. That alert contains a Document Identification Number (DIN) — a 20-digit alphanumeric code that authenticates the notice.

Physical service still exists, but it is the exception. It applies only when digital delivery fails — for example, where no email or mobile number is registered on the portal, or where a notice has not been accessed for a prescribed period. Do not expect a physical letter as a backup; if your contact details on the portal are outdated, you may miss a legal deadline without any awareness.

What this means for you in practice: Log in to incometax.gov.in and check Pending Actions → e-Proceedings at least once a fortnight. June through December is peak period for AY-processing notices; January through March sees reassessment and penalty proceedings spike. Put a recurring calendar reminder — it takes two minutes and can save months of dispute.

Under the Faceless Assessment Scheme (FAS), the officer handling your case is anonymous and located at the National Faceless Assessment Centre (NFAC) in Delhi, regardless of your PAN jurisdiction. There is no local AO to call. Every conversation happens through the portal, which makes timely digital access non-negotiable.

The DIN Authenticity Check: Do This Before Anything Else

Every valid income-tax communication issued on or after 1 October 2019 must carry a DIN. This was mandated by CBDT Circular No. 19/2019. A notice without a DIN — or with a blank, handwritten, or unverifiable DIN — is legally void and cannot form the basis of any adverse order against you.

How to verify a DIN in three steps:

1. Go to incometax.gov.in → Quick Links → Authenticate Notice/Order Issued by ITD.
2. Enter the DIN printed on the notice.
3. The portal confirms whether the DIN is valid, which PAN it was issued to, and under which section.

If the DIN is invalid, document this in writing (a dated email to yourself is sufficient) before treating the notice as void. Do not simply ignore a notice that appears genuine — always verify first.

There is an important exception: certain communications from Investigation Wings (search and seizure, survey operations) may follow a different issuance process. If you receive any communication following a survey under Section 133A or a search under Section 132, verify with a CA before treating any DIN absence as a basis for ignoring it.

A practical note on phishing: a well-crafted fraudulent email can replicate the format of a genuine income-tax notice down to logos and section references. The DIN check at the official portal is your only reliable protection against both fraud and clerical errors in genuine notices.

A Field Guide to the Eight Most Common Notice Types

Correct classification is half the battle. Here is what each notice actually means and what it legally obligates you to do.

Section 143(1) Intimation — Automated Processing Outcome

This is not a "notice" in the adversarial sense. It is the output of the Centralised Processing Centre (CPC) in Bengaluru processing your ITR. The CPC compares your return against Form 26AS, AIS, and TIS data and issues one of three outcomes:

• Refund: The CPC agrees with your return and the excess TDS is being refunded.
• Demand: The CPC found income or TDS mismatches and is raising a tax demand.
• No adjustment: Return accepted as filed.

The intimation must be sent within one year from the end of the FY in which the return was filed. So for AY 2025-26 (return filed in FY 2025-26), the intimation deadline is 31 March 2027.

If there is a demand and you agree with it, pay through Challan 280, Minor Head 400 (Tax on Regular Assessment) within 30 days. If you believe the CPC made an error, file a rectification request under Section 154 — you have four years from the end of the FY in which the intimation was issued to do so.

Section 139(9) Defective Return Notice

The CPC has identified a specific defect in your ITR: a missing schedule, incorrect ITR form selection, mismatched bank account details, unlinked Aadhaar-PAN, or incomplete income declaration.

You have 15 days from the date of notice — or such extended period as the AO allows — to rectify the defect. The response path is: e-File → e-File in Response to Notice u/s 139(9). The portal shows you the exact defect code and allows you to upload a corrected ITR.

Miss this deadline and the return is treated as if it was never filed. That triggers belated return penalties under Section 234F, interest under Sections 234A and 234B, and potentially a demand notice for any advance tax shortfall.

Section 142(1) Inquiry Notice — Pre-Assessment Information Request

Issued before or during assessment to gather documents, accounts, or explanations. It has three uses: (a) requesting a return if one has not been filed; (b) requisitioning books, documents, and accounts during scrutiny; and (c) directing a special audit under Section 142(2A).

Deadline: as specified in the notice, typically 10 to 30 days. Non-compliance attracts a penalty of Rs. 10,000 per default under Section 271(1)(b) — that is per notice, not per year.

Section 143(2) Scrutiny Notice — Your Case Is Under Detailed Examination

Receiving this notice means your ITR has been selected for detailed scrutiny, either through CASS (Computer-Assisted Scrutiny Selection) or because of a specific trigger such as a large cash deposit, a high-value transaction in your AIS, or a sector-specific criterion.

Critical time limit: the AO must serve this notice within six months from the end of the FY in which the return was filed. For AY 2025-26 (return filed in, say, July 2025 — i.e., FY 2025-26), the notice must be served by 30 September 2026. A notice served after this date is legally barred and you can raise that objection.

Under the Faceless Assessment Scheme, you respond entirely through e-Proceedings. A final assessment order must be passed within 12 months from the end of the AY (with extensions for international transactions and certain other cases). For AY 2024-25, the outer limit for the assessment order was 31 March 2026.

Section 148 / 148A Reassessment Notice — Escaped Income

This arises when the AO believes income has escaped assessment in a prior year. Post the Finance Act 2021 amendments, the Department cannot directly issue a Section 148 notice without first following the four-step Section 148A procedure:

1. Section 148A(a): AO conducts inquiry with prior written approval from the PCIT or CIT.
2. Section 148A(b): AO issues a show-cause notice giving you at least 7 days to respond (in practice, 30 days is common).
3. Section 148A(c): AO reviews your reply.
4. Section 148A(d): AO passes a speaking order — within one month of receiving your reply — deciding whether reassessment is justified. If the order says "proceed", the Section 148 notice follows.

Time limits for issuing a Section 148 notice:

• Escaped income below Rs. 50 lakh: Notice must be issued within 3 years from the end of the relevant AY.
• Escaped income Rs. 50 lakh or more: Up to 10 years, subject to PCIT/CIT approval and corroborating evidence of serious tax evasion (search material, undisclosed foreign assets, specific information).

Section 156 Demand Notice — Tax Payable

Issued after an assessment order, carrying the amount of tax, interest, or penalty payable. You have 30 days from the date of service to pay. From day 31 onwards, simple interest under Section 220(2) at 1% per month accrues on the outstanding balance.

Your options: pay in full; apply for payment in instalments under Section 220(3); or apply for a stay of demand under Section 220(6) pending disposal of an appeal, supported by a 20% upfront payment (or such percentage as CBDT directs from time to time).

Section 245 Set-Off Intimation — Refund Adjusted Against Demand

Before adjusting your refund against an existing outstanding demand, the Department must give you an opportunity to respond. You have 30 days from this intimation to either accept the adjustment or challenge the demand being set off. If an appeal against the demand is pending, file a reply citing the appeal reference number and stage — this can halt the adjustment.

Section 271 Penalty Notices — Financial Consequences of Non-Compliance

• Section 270A (applicable from AY 2017-18 onwards): Under-reporting of income → 50% of the tax attributable to the under-reported income. Misreporting (false particulars, suppression of facts) → 200% of that tax.
• Section 271(1)(b): Failure to comply with notices under Section 142(1) or 143(2) → Rs. 10,000 per default.
• Section 271(1)(c): Concealment or furnishing inaccurate particulars (applicable to pre-AY 2017-18 cases still in proceedings) → 100% to 300% of the tax sought to be evaded.

Five Things to Check the Moment You Open Any Notice

Before you react — and certainly before you call anyone in a panic — read the notice with this five-point checklist:

1. DIN: Authenticate at the portal immediately (as described above).
2. Assessment Year: Confirm the AY matches the year you expect. Typographical errors in notices are not unheard of.
3. Section number: This determines your entire response path.
4. Response deadline: Note the exact calendar date — not "30 days from receipt" as a vague phrase. Set a calendar reminder for three days before that date.
5. Documents requisitioned: Make a complete list. Gather everything before drafting your reply — a response that says "documents to follow" is weaker than a complete submission.

Cross-reference the notice against your ITR, Form 26AS, AIS, and TIS (Taxpayer Information Summary). These four documents together represent the Department's view of your finances. The specific data point that triggered the notice is almost always visible in the AIS.

Step-by-Step: How to Submit a Response on the e-Filing Portal

Here is the exact navigation sequence:

1. Log in at incometax.gov.in using PAN + password, or via Aadhaar OTP login.
2. Navigate to: Pending Actions → e-Proceedings → For Your Action.
3. Click the relevant notice entry. Read the full text on screen before doing anything else.
4. Click Submit Response.
5. Select the appropriate response type from the dropdown: Agree, Partially Agree, Disagree, or Submitting Documents.
6. Draft your reply in the text box. Use numbered paragraphs, refer to specific ITR schedule entries, Form 26AS TDS entries, and AIS line items by name. Be precise — vague replies invite follow-up queries.
7. Attach supporting documents in PDF format, maximum 5 MB per file. If a document exceeds 5 MB, split it into parts. Use a clear naming convention: PAN_AY2526_BankStatement_Part1.pdf.
8. Authenticate your submission using DSC (Digital Signature Certificate) or Aadhaar OTP.
9. Submit and immediately download the Acknowledgement PDF. Note the Acknowledgement Reference Number (ARN).
10. Return to the notice list after a few minutes and confirm the response status column shows "Submitted".

If the portal is slow or throws an error, try a different browser (Chrome is most reliable on the portal). Do not attempt portal submissions in the last 30 minutes before a midnight deadline — server load spikes.

Worked Example: Section 143(1) Demand Based on AIS Mismatch

Scenario: Arjun is a salaried individual with gross salary income of Rs. 16,80,000 for AY 2025-26. He declared savings bank interest of Rs. 9,000 in Schedule OS of his ITR. His AIS, however, shows total savings and FD interest of Rs. 47,000 — the difference arises from a fixed deposit he had opened two years ago with a second bank and largely forgotten.

How the CPC computes the demand:

Arjun's options:

If the AIS figure is correct — Arjun did miss declaring the FD interest. He pays Rs. 12,569 via Challan 280, Minor Head 400 within 30 days. Since the ITR due date has passed, he cannot file a revised return. He should, however, file a rectification under Section 154 to correctly reflect the additional income in his ITR record, ensuring Form 26AS for TDS on FD interest is reconciled.

If the AIS figure is wrong — Suppose the second bank mistakenly uploaded Arjun's interest as Rs. 47,000 when the correct amount was Rs. 9,000 (data entry error). Arjun files a rectification request under Section 154, attaching the bank's corrected TDS certificate (Form 16A), a bank account statement showing actual interest credited, and a written explanation. The rectification must be filed within four years from the end of the FY in which the Section 143(1) intimation was issued.

Lesson for every taxpayer: Download your AIS at the time of filing — not after receiving a notice. The AIS is updated in near-real time and shows every income point the Department will use to process your return. Reconciling it before filing eliminates most 143(1) demands at source.

Faceless Assessment and Your Right to a Personal Hearing

Under the Faceless Assessment Scheme notified under Section 144B of the Income-tax Act, 1961, all scrutiny assessments and best-judgment assessments are conducted entirely through the e-Proceedings portal. The AO, the Verification Unit, the Technical Unit, and the Review Unit are geographically separated and anonymous to each other as well as to you.

Before any adverse order is finalised, the NFAC must issue a draft assessment order and give you 15 days to file objections. This is your last opportunity to present your case before a formal demand is raised — treat it seriously.

Requesting a video-conference personal hearing: Under Section 144B(7), you can apply for a video-conference hearing when your case involves complex factual issues or a substantial proposed demand. The procedure:

1. File a written request through e-Proceedings, stating specific reasons (e.g., "the matter involves reconstruction of historical books destroyed in flood; oral explanation with documents is essential").
2. NFAC decides whether to grant the request — it is discretionary.
3. If granted, the hearing is conducted on a CBDT-notified video-conferencing platform and both parties' submissions are recorded.

Grant rates are not universal. Prepare every written submission as if there will be no personal hearing — comprehensive, well-referenced, with documents properly indexed. The hearing, if granted, is a supplement to strong written submissions, not a substitute for them.

Common Mistakes That Turn a Simple Notice Into a Prolonged Dispute

These are patterns seen repeatedly in practice:

• Missing the deadline and hoping the Department doesn't follow up: The e-Proceedings system automatically flags overdue responses and can trigger ex-parte action. Always respond, even if your reply says only "extension requested — documents being compiled from bank; request 15 additional days." A filed extension request creates a record; silence creates risk.

• Replying to the wrong Assessment Year: When multiple years are open simultaneously (common in reassessment proceedings), verify the AY on every single notice before uploading any document. Attaching AY 2023-24 profit and loss accounts in response to an AY 2024-25 query creates confusion and a fresh query round.

• Uploading unreadable scans: Blurry bank statements or low-resolution document images get rejected or generate adverse inferences. Scan at 200 DPI minimum, use PDF/A format, and preview before uploading.

• Conceding a 143(1) demand without verification: Paying a demand immediately signals acceptance. If the demand is based on a CPC error — wrong TDS credit, duplicate income entry — paying first and rectifying later is legally possible but procedurally cumbersome. Verify first, pay or contest second.

• Assuming an extension will be granted after the deadline: Extension requests must be filed before the deadline expires. A request filed on the day after is technically a non-response. The AO has no obligation to accept it.

• Ignoring a Section 148A(b) notice because it looks "preliminary": The 148A stage is your single best opportunity to close a reassessment before it begins. A detailed, well-documented reply at 148A(b) — citing exactly why the alleged escaped income was disclosed, not taxable, or covered by a Supreme Court precedent — can persuade the AO to pass a "do not proceed" order under Section 148A(d). Many taxpayers under-invest here and then spend two years fighting at the assessment stage.

• Not saving acknowledgements: Portal timeouts and technical glitches are real. Download the submission acknowledgement PDF immediately after every filing. Store it with the original notice in a dedicated folder (physical or cloud) labelled by AY and section.

What Happens When You Ignore a Notice: The Cost of Silence

Ignoring a notice is never a neutral act. The law gives the Department specific powers when a taxpayer does not respond.

Section 144 — Best Judgment Assessment: If you do not respond to scrutiny or inquiry notices, the AO assesses your income on a "best judgment" basis, using third-party data, industry benchmarks, and whatever information the Department holds. This almost invariably produces a higher income figure than your actual income.

Section 271(1)(b) penalty: Rs. 10,000 per default for non-compliance with each notice under Section 142(1) or 143(2). Three non-responses = Rs. 30,000 in penalties before the assessment is even complete.

Section 220(2) interest: On any demand that is not paid within 30 days, simple interest at 1% per month (or part of a month) runs from day 31. A Rs. 5,00,000 demand left unpaid for 12 months adds Rs. 60,000 in interest alone.

Worked penalty illustration:

Suppose a taxpayer ignores three successive notices under Section 142(1), and the resulting best-judgment assessment under Section 144 raises income by Rs. 10,00,000:

That is over Rs. 5.29 lakh on an income difference that, with a documented, timely response, might have been reduced to nil or a fraction of that amount.

Section 276CC — Prosecution for Wilful Non-Filing: For wilful failure to furnish a return when demanded, Section 276CC authorises prosecution. On conviction, the penalty is rigorous imprisonment from 3 months to 2 years — or up to 7 years if the tax evaded exceeds Rs. 25 lakh. Prosecutions are rare for ordinary defaults but well-documented for repeat, large-value, and search-linked cases. The risk is real enough to take seriously.

Key Takeaways

• Verify the DIN before anything else — a notice without a valid DIN authenticated on the e-Filing portal is legally void and cannot sustain an adverse order against you.
• Classification determines your response: a Section 143(1) intimation needs a rectification or payment; a Section 143(2) scrutiny needs document-backed written submissions; a Section 148A(b) notice needs a substantive legal reply — conflating these leads to wrong actions at the wrong time.
• Deadlines are statutory, not aspirational — 15 days for a defective return notice under Section 139(9), 30 days to pay a Section 156 demand, 7 days minimum on a Section 148A(b) notice; extensions must be requested before the deadline, not after.
• Your AIS is the Department's source of truth: download and reconcile it against your ITR before filing every year, not after you receive a notice — most Section 143(1) demands are rooted in AIS mismatches that were visible at filing time.
• The Section 148A(b) stage is your highest-leverage opportunity in a reassessment: a well-argued reply here can result in a "do not proceed" order under Section 148A(d) and close the matter entirely before a formal reassessment notice is even issued.
• Silence compounds costs geometrically — best-judgment additions, Section 270A penalties at 50% or 200% of tax, Section 220(2) interest at 1% per month, and Section 271(1)(b) penalties at Rs. 10,000 per default can collectively turn a manageable dispute into a demand several times the original tax difference.
• Under the Faceless Assessment Scheme, every written submission must stand alone — there is no informal conversation with a local AO to supplement a thin filing; invest in thorough, well-indexed, clearly referenced written responses the first time.