Intimation u/s 143(1): Not an Income Tax Assessment

Intimation under Section 143(1):

The summary of details that a taxpayer furnishes to the Income Tax Department, which it considers for processing the Income Tax Return of the taxpayer, is called as intimation under Section 143(1) of the Income Tax Act, 1961.

Intimation under Section 143(1)

Details in the Intimation under Section 143(1):

This intimation provided under the said act contains the following piece of information-

  • Assesses, permanent details like name, address, mobile number etc.
  • Details of the Income Tax Return filing such as date of filing, acknowledgment number etc.
  • Refund application sequence number
  • Calculated taxes provided by the taxpayer in the Income Tax Return
  • Computed taxes under Section 143(1) as per the taxation department
  • Communication Reference Number

Compulsory checks done by Income Tax Department for issuing Intimation under Section 143(1):

Whenever a taxpayer files their returns, the Income Tax Department checks the correctness of the returns through computerized methods for reviewing. The reasons for which the Intimation under Section 143(1) is issued are for the following-

  • If there are arithmetical errors in the income returns.
  • Any errors in the calculation of tax amount, late filing fees, penalties and interests.
  • Claims that are incorrect, apparent from the information furnished in the returns.
  • Deductions to be made under Section 10AA, Section 80 IA, Section 80 IAB, Section 80 IC, Section 80 ID and Section 80IE, have been considered and taken or not after the Income tax return due date.
  • Comparing the TDS, Advance taxes and Self-assessment taxes from the Form 26AS.
  • Adding the income that appears in various forms such as Form 16 or Form 16A or Form 26AS, that has not been included in the returns by the taxpayer.
  • Carrying forward the claimed losses to the next financial year or set of losses of the previous financial year, in cases where the return has been filed after the due date.
  • The disallowed indicated expenditure in the audit report which is not taken into account for computing the total income to be shown in the Income Tax Return.

Cases where the Intimation under Section 143(1) is issued by the Income Tax Department:

In the below mentioned cases the taxation department issues an Intimation under Section 143(1)-

  • Any increase in the tax amount or payable interest.
  • Any decrease in the taxable amount or payable interest.
  • Any increase in the refund amount.
  • Any decrease in the tax refund amount.
  • Any adjustments that make notable changes in the claimed losses by the taxpayer.
  • In any other cases deemed to be fair by the Income Tax Department.

Time period for receipt of Intimation under Section 143(1):

The Income Tax Department can issue the Intimation under Section 143(1) of the Income Tax Act, 1961 to a taxpayer up to one year from the end of the financial year for which the Income Tax Return was filed. No intimation can be served after this time period.

Steps to be taken by taxpayer on receipt of Intimation under Section 143(1):

After the taxpayer receives the Intimation under Section 143(1), two cases are likely to happen, which are-

  • When the taxpayer agrees to the payable tax amount or the due refund amount- He/ she is required to pay the outstanding tax amounts or the taxpayer will receive the refund amount provided in the Intimation under Section 143(1).
  • When the taxpayer disagrees with the Income Tax Departments computation- They have the option under Section 154, to file online request to rectify the Income Tax Return or even file an appeal as per the Section 246A.

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    Author: Anil Agrawal
    EZYBIZ India Consulting LLP, New Delhi. The firm is business and tax consultancy firm providing consultancy in Taxation, Regulatory, Transfer pricing, Valuation, Corporate funding and Business set up matters. He may be reached at 9899217778 or anil@ezybizindia.in.
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