Different Types Of Notices And Their Time Limit Under Income Tax

The Income Tax Act 1961 has a mechanism for ensuring compliance by issuing notices to assessees the department considers non-compliant. These notices can be a request for information or demand tax payment/penalty for non-compliance. However, it should be noted that all the notices should be issued according to the provisions of the act. If the notice is not issued per the act, it is rendered void, invalidating the tax demand and penal procedures. Therefore, as taxpayers, it is essential for us to understand the notices that can be issued under different sections of the act, as well as the time limits and other compliance aspects.

Section 142(1) - Inquiry Before Assessment

Section 142 deals with the procedures related to inquiries before the department assesses an assessee's income. The inquiry begins with a notice from the Assessing Officer. 

The notice can be issued under the following circumstances:

• The Assessee has not Filed Returns Within the Time Limits u/s 139 
• The Assessee has Already Filed the Return Within the Due Date u/s 139

The Assessee has not Filed Returns Within the Time Limits u/s 139 

The notice requires the assessee to file the returns within the specified time limit.

The Assessee has Already Filed the Return Within the Due Date u/s 139 

• Notice requiring the assessee to produce books of accounts or documents 
• Notice requiring the assessee to furnish information in written form as required by the assessing officer. This information might include statements of assets and liabilities, which are already part of accounts.

Time Limit of Issue of Notice u/s 142(1)

Time limit for notice under the following two situations are explained below

• Notices issued for the production of books of accounts or information
• Notices issued in case the return on income not filed

For Notices Issued for the Production of Books of Accounts or Information

The time limit is 3 years before the previous year. 

E.g. If the notice is issued on 24-05-2025, it was issued in the previous year, 2024-25. The notice pertaining to the production of accounts should be pertaining to the year 2021-22 and not any earlier previous year.

For Notices Issued in Case the Return on Income not Filed

• There is no explicitly mentioned time limit for the issue of notice u/s 142(1) in case the return on income is not filed.
• However, the time limit for completing the assessment for section 143 is 12 months from the completion of the relevant assessment year. 
• So, it can be interpreted that the notices should also be issued within the time limits for completion of the assessment in case the notice is issued for return on income is not filed.

Time Limit for Response to Notice

The assessee is required to file the return or necessary information within the time limit prescribed in the notice.

Section 143(1) - Notice on Summary Assessment 

What is Summary Assessment?

Simply speaking, summary assessment is the processing of the return. 

Notice on Summary Assessment

Under the act, it is not mentioned as ‘notice’ but as ‘intimation’. This notice is issued when the assessee has already filed the return on income. If the assessing officer finds certain inconsistencies, as mentioned below, he sends an intimation to the assessee.  

• Any arithmetical error in the return;
• Any claim which is incorrect on the face of it,
• Losses of previous financial years for which the return is filed beyond the due date as per section 139(1)
• Any expense disallowed in the Tax Audit Report and not disallowed in the income tax computation.
• If any deduction is claimed under Chapter VI-A or section 10AA for the financial year in which the return is filed beyond the due date mentioned in section 139(1).

Usually, these inconsistencies are not found out of deep scrutiny; they are obvious inconsistencies that appear apparently.

The intimation can be issued if the return is filed under section 139(1) or 142(1).

Now, the assessee is supposed to file a response to the intimation received within 30 days of the date the intimation is issued.

Time Limit for Notice u/s 143(1)

Notice under section 143(1) cannot be sent by the assessing officer after 9 months from the end of the financial year in which the return is filed.

For example, the return of income is filed for FY 2024-25. End of the financial year is 31-03-2025. 9 months from the end of financial year is 31-12-2015. It is the last date for issuing intimation u/s 143(1) in this case.

Time Limit for Response to Notice

The time limit for response to the notice is as follows.

If the Assessee Files the Response Within 30 Days: 

His responses will be considered for the computation of income by the assessing officer. The assessing office would verify the correctness and validity of responses received before giving effect to the inconsistencies noted.

If The Assessee files no Response Within 30 Days: 

The assessing officer will proceed, giving effect to the inconsistencies noted.

Section 143(2) - Notice on Scrutiny Assessment

What is Scrutiny Assessment?

If the return of income is filed after notice is issued under section 142(1), the assessing officer would want to ensure that the income and deductions in the return are correct. He assesses the income. This is called scrutiny assessment.

Notice under Scrutiny Assessment

The assessing officer might require the assessee to furnish evidence to perform a scrutiny assessment. In this case, he issues a notice under section 143(2). 

Time Limit for the Issue of Notice u/s 143(2)

3 months from the end of the relevant financial year on which the return on income is furnished. 

For example, the Return was furnished on 19/02/2025. The financial year ends on 31 March 2025, so the notice needs to be issued by 30 June 2025.

Time Limit for Response to Notice

The response should be submitted by the assessee within the time limit specified in the notice. 

Consequence of Non-Compliance of Time Limit

• The assessing officer would proceed to assess the income himself, based on whatever information is available. He would demand tax from the assessee as per his calculation, without providing any opportunity for the assessee to explain. This is called the Best Judgement Assessment u/s 144.
• Anyway, we can make a requisition under section 119(2) to the CBDT to relax the time limit. The assessing officer can relax the time limit at his discretion.

Section 148 - Notice on Income Escaping Assessment

What is Income Escaping Assessment?

The assessee would not have furnished certain income in the returns and it would have been missed out by the assessing office on his regular assessment. In this case, the assessing officer has the power to re-assess the income of the assessee in the particular financial year. 

It could also be that the assessing officer has not conducted any assessment on the return under question, and the time limit for normal assessment under section 143 has elapsed. In these situations, he has the power to re-open the return under question and conduct assessment.

This is the concept of income escaping assessment. 

Notice on Income Escaping Assessment

A Show Cause Notice is issued to the assessee, allowing him to explain himself under section 148A. If the assessing officer is still unsatisfied, a notice under section 148 is issued. 

It is to be noted that notice for income escaping assessment can be issued only when the assessing officer has information indicating that the income has escaped the assessment.

Illustration:

Notice u/s 148 is issued on 15th January 2025. The end of Jan is 31st Jan. 3 months from 31st Jan - 30th April 2025. Return to be within 30th April 2025.

Time Limit for Issue of Notice Under Section 148:

Time Limit for Response to Notice

In the notice under section 148, the assessing officer requires the assessee to file a return of income within 3 months from the end of the month the notice is issued.

Consequence of Non-Compliance of Time Limit

• Best Judgment Assessment u/s 144.
• However, the assessee can make a requisition under section 119(2) to the CBDT for a relaxation of the time limit. The assessing officer can relax the time limit at his discretion.

Section 156 - Demand Notice

At the end of the assessment by the assessing officer, an assessment order is passed, determining the amount of tax, interest, and penalty payable by the assessee. Wherever it is found that an amount is recoverable from the assessee as tax, interest, and penalty, the assessing order must be sent along with a demand notice. 

Time Limit for Response to Notice

The assessee should pay the demand notice within 30 days of the notice. In exceptional cases, the assessing officer, with the prior approval of the Joint Commissioner, can reduce or extend the period or allow payment by installment.

If the assessment order is not accompanied by a demand notice, the assessee does not need to pay tax, interest, or penalty.

Consequence of Non-Compliance of Time Limit

• Interest at 1% per month or part thereof if the payment is not made within 30 days.
• Penalty as imposed by the assessing officer.

Section 139(9) - Defective Notice

After the assessee files the return of income, when the assessing officer finds the return filed defective, he sends an intimation to the assessee. Therefore, the assessee is provided with an opportunity to rectify the defect.

Time Limit for Response to Notice

• In normal cases, the assessee should file a response to the intimation within 15 days of the issue of notice. 
• However, the assessee can request the assessing officer to relax the time limit, and the assessing officer has the discretion to do so.

Consequence of Non-Compliance of Time Limit

If the assessee does not file a response within the specified time limit, the return that was filed will be treated as invalid. It will be considered as if the assessee has not filed a return at all. 

Final Word

It is important to maintain accurate records and file the returns accurately to avoid notices, penalties, and assessments. It is also essential that the taxpayer be aware of situations, conditions, and time limits for notices under different sections of the act to effectively comply with notices.

Related Articles

Defective notice u/s 139(9)

Demand Notice

Section 148A of the Income Tax Act

Section 148 of the Income Tax Act

Income Tax Scrutiny Notice

Intimation under section 143(1)

Types of Assessment in Income Tax

Notice u/s 142(1) of the Income Tax Act