Notice under Section 142(1) of the Income Tax Act

Notice under Section 142(1) of the Income Tax Act. Receiving an income tax notice can be stressful, especially when you are not sure why the notice has been sent or what steps you need to take. One of the most common notices sent by the Income Tax Department is the Income Tax Notice under Section 142(1) of the Income-tax Act, 1961. This notice is issued either to prompt the taxpayer to file their return or to seek further information or clarification regarding the return already filed. Knowing about the Notice under Section 142(1) means, when it is issued, and how to respond to it can help you stay compliant with tax laws and avoid penalties. This guide will explain all the important aspects of Section 142(1) in detail.
What is a Notice under Section 142(1) of the Income-tax Act?
The Notice under Section 142(1) of the Income-tax Act is an official communication sent by the Income Tax Department to a taxpayer for two main reasons:

When a person has not filed their income tax return within the time limit allowed under Section 139(1).

When additional information or documents are needed for making a proper assessment of tax, even if the return has already been filed.

This notice can be issued even after the end of the relevant assessment year. If you receive such a notice, it means the Assessing Officer (AO) requires you to furnish specific details or documents to verify the information declared in your return or to file the return if it hasn't been filed yet.
Who Has the Authority to Issue an Income Tax Notice under Section 142(1)?
The authority to issue a Notice under Section 142(1) lies with the Assessing Officer of the Income Tax Department. This officer can issue such a notice regardless of whether the taxpayer has already filed a return under Section 139(1) or not.
Even if a person is not otherwise required to file a return under the Income Tax Act (for example, their income is below the taxable limit), they are still legally bound to file a return in response to a notice issued under Section 142(1)(i).
The Assessing Officer can issue the notice if:

The return has not been filed at all.

The return has been filed, but additional documents or explanations are required.

When is a Notice under Section 142(1) Issued?
The Income Tax Notice under Section 142(1) can be issued in a variety of situations, and it is important to understand the timing and reason behind it.

Non-filing of Return: If you have failed to file your income tax return within the specified period or even after the end of the relevant assessment year, the AO can issue a notice requiring you to submit the return. This is a legal reminder and not responding to it can lead to serious consequences.

Return Already Filed: Even if you have filed your return on time, the AO may still need further information or clarification. The officer may issue a Notice under Section 142(1) to ask for documents like bank statements, invoices, or explanation of certain deductions claimed in your return.

For Any Person: This notice can be sent to any individual, even if they were not originally required to file a return. In such cases, the person is required to file a return after receiving the notice.

Objectives Behind Issuing a Notice under Section 142(1)
The purpose of issuing an Income Tax Notice under Section 142(1) is to ensure that the Assessing Officer has all the necessary information to correctly assess the taxpayer’s income and calculate the correct amount of tax liability.
Some key objectives are:

To gather relevant documents, statements, or explanations from the taxpayer.

To ask the taxpayer to file their return if it has not been filed yet.

To verify the claims made in the filed return and check for inconsistencies or under-reporting.

To assess not only the taxpayer’s own income but also the income of any other person for whom the taxpayer is legally responsible (like a guardian or legal heir).

The notice helps the Income Tax Department maintain transparency, accuracy, and accountability during tax assessments.
Types of Requests Made in Notice under Section 142(1)
There are generally three types of requests that can be made through a Notice under Section 142(1):
Notice to File Income Tax Return
If you have not filed your income tax return within the prescribed due date, you may receive a Notice under Section 142(1)(i) asking you to file your return. This applies even if the due date under Section 139(1) has passed. Filing your return after getting this notice is mandatory and cannot be avoided.
Request for Specific Accounts or Documents
If you have already filed your return, the AO might ask you to submit certain supporting documents. These could include:

Profit and loss statements

Bank statements

Investment proofs

Rent receipts

Invoices and bills related to business or profession

This helps the AO verify that the information declared in your return is complete and accurate.
Request for Additional Information
Sometimes, the AO may ask you to provide a statement of assets and liabilities, even if these are not recorded in your books of account. This is to get a clearer picture of your financial position. Such details need to be submitted in a specific format as directed by the officer.
Penalty for Non-Compliance of Notice under Section 142(1)
Failing to respond to a Notice under Section 142(1) can lead to serious consequences. Here are the penalties and actions that can be taken:

Penalty under Section 271(1)(b): A fine of Rs.10,000 may be levied for failure to comply with the notice.

Best Judgment Assessment under Section 144: The AO can complete the assessment based on his own judgment, using the information available. This could lead to higher tax liability or denial of deductions.

Prosecution under Section 276D: In severe cases, the taxpayer may be prosecuted with imprisonment for up to 1 year, with or without a fine.

Search Warrant under Section 132: If the officer suspects concealment of income or evasion, they may issue a warrant for search and seizure.

It is, therefore, very important to take a Notice under Section 142(1) seriously and respond to it within the stipulated time.
How Can Taxpayers Protects Themselves?
Taxpayers can take several steps to protect themselves from penalties and ensure compliance when responding to a Notice under Section 142(1) of the Income-tax Act:
Provide Correct Accounts and Documents
Ensure that you submit all requested financial statements, receipts, bills, and other documents truthfully. Misreporting or hiding facts can lead to penalties.
Statement of Assets and Liabilities
If asked to provide this statement, know that prior approval from the Joint Commissioner is required before the AO can request it. Also, such information can be sought only for the previous three years.
Keep Records Ready
Even if you have already filed your return, always maintain proper documentation. These records help you respond correctly if you receive any inquiry from the department.
Timely and Accurate Response
Make sure you respond within the time mentioned in the notice. Delays or non-response can attract penalties or further legal action.
Sample Format of Income Tax Notice under Section 142(1)
While the actual format may vary, a Notice under Section 142(1) usually includes:

Name and PAN of the taxpayer

Assessment year involved

Details of what is being requested (filing of return, specific documents, etc.)

Time limit within which the taxpayer must respond

Consequences of failure to comply

This notice is often delivered via registered post or electronically through the Income Tax Portal.
Steps to Respond to the Notice under Section 142(1)
If you receive an Income Tax Notice under Section 142(1), you must respond through the official Income Tax e-filing portal. Here are the steps:

Go to Pending Actions: Click on the "E-proceedings" option.

Select the relevant notice: Under ‘View Notices’, find the notice issued under Section 142(1).

Submit Response: Click on ‘Submit Response’.

Choose Response Type: You can select either ‘Full Response’ or ‘Partial Response’ based on the availability of documents.

Upload Documents: Attach scanned copies of the documents requested.

Submit: Once you’re done, submit the response and keep an acknowledgment copy for your records.

Common Notices Relating to HRA and TDS – What You Should Know
Lately, many taxpayers have been receiving Income Tax Notices under Section 142(1) regarding claims made under House Rent Allowance (HRA) in Section 10(13A). This is especially the case where the employer has not deducted TDS under Section 194-IB.
If you have claimed HRA but your landlord did not provide a PAN or TDS was not deducted properly, you could be asked for supporting documents such as rent receipts, rent agreement, and proof of payment.
Conclusion
Receiving a Notice under Section 142(1) of the Income-tax Act does not always mean you have done something wrong. It is part of the Income Tax Department's process to ensure transparency and proper verification of tax returns. What matters most is how you respond.
If you receive such a notice, take prompt action, understand what is being asked, gather all necessary documents, and respond within the specified time. If you are unsure, consult a qualified tax professional who can help you respond correctly and avoid penalties.
In case of any doubts or need any support, connect with Compliance Calendar Experts through email at info@ccoffice.in or Call/Whatsapp at +91 9988424211.
FAQs
Q1. What is the purpose of a Notice under Section 142(1) of the Income-tax Act?
Ans. The purpose of a Notice under Section 142(1) is to either call upon the taxpayer to file their income tax return if it has not been filed, or to seek further information, documents, or clarification in relation to a filed return. It helps the Assessing Officer (AO) assess the taxpayer’s income accurately. It is not a penalty notice but a part of the inquiry process before assessment.
Q2. Can I receive a Notice under Section 142(1) even if I have already filed my Income Tax Return?
Ans. Yes, even if you have filed your Income Tax Return on time, you may still receive a Notice under Section 142(1). This happens when the Assessing Officer needs further clarification, documents, or explanation about the details mentioned in your return. It is a standard procedure to ensure correct assessment and transparency.
Q3. What should I do after receiving a Notice under Section 142(1)?
Ans. Once you receive a Notice under Section 142(1), you should carefully read the instructions and understand what information or documents have been requested. Log in to the Income Tax e-filing portal, go to the ‘e-Proceedings’ section, and submit your response along with the required documents within the time frame mentioned in the notice. Timely and accurate response is very important.
Q4. What happens if I don’t respond to the Notice under Section 142(1)?
Ans. Non-compliance with a Notice under Section 142(1) can lead to serious consequences. These include:

A penalty of Rs.10,000 under Section 271(1)(b).

Assessment of your income on a “Best Judgment” basis under Section 144, which may result in a higher tax demand.

Prosecution under Section 276D, which can lead to imprisonment for up to 1 year.

A search warrant can also be issued under Section 132 in serious cases.

Q5. Is there a time limit within which I must respond to the notice?
Ans. Yes, the notice will specify a time limit by which you must respond. Usually, the Notice under Section 142(1) gives you around 7 to 15 days to reply, but this may vary based on the specific case. It is important to respond within the given timeline to avoid penalties or adverse action.
Q6. Can someone receive this notice even if their income is below the taxable limit?
Ans. Yes, a Notice under Section 142(1) can be issued to any person, even if their income is below the taxable limit or if they are not otherwise required to file a return. Once the notice is issued, it becomes mandatory to respond and, if required, file a return regardless of whether your income is taxable or not.
Q7. Is professional help recommended for replying to a Notice under Section 142(1)?
Ans. Yes, it is advisable to seek help from a Chartered Accountant (CA) or a tax professional while replying to a Notice under Section 142(1). They can help you understand the requirements of the notice, prepare the correct documents, and draft a proper response to avoid penalties or further notices. Expert assistance ensures that your reply is accurate, complete, and legally compliant.

Receiving an income tax notice can be stressful, especially when you are not sure why the notice has been sent or what steps you need to take. One of the most common notices sent by the Income Tax Department is the Income Tax Notice under Section 142(1) of the Income-tax Act, 1961. This notice is issued either to prompt the taxpayer to file their return or to seek further information or clarification regarding the return already filed. Knowing about the Notice under Section 142(1) means, when it is issued, and how to respond to it can help you stay compliant with tax laws and avoid penalties. This guide will explain all the important aspects of Section 142(1) in detail.

What is a Notice under Section 142(1) of the Income-tax Act?

The Notice under Section 142(1) of the Income-tax Act is an official communication sent by the Income Tax Department to a taxpayer for two main reasons:

When a person has not filed their income tax return within the time limit allowed under Section 139(1).
When additional information or documents are needed for making a proper assessment of tax, even if the return has already been filed.

Who Has the Authority to Issue an Income Tax Notice under Section 142(1)?

The authority to issue a Notice under Section 142(1) lies with the Assessing Officer of the Income Tax Department. This officer can issue such a notice regardless of whether the taxpayer has already filed a return under Section 139(1) or not.

Even if a person is not otherwise required to file a return under the Income Tax Act (for example, their income is below the taxable limit), they are still legally bound to file a return in response to a notice issued under Section 142(1)(i).

The Assessing Officer can issue the notice if:

The return has not been filed at all.
The return has been filed, but additional documents or explanations are required.

When is a Notice under Section 142(1) Issued?

The Income Tax Notice under Section 142(1) can be issued in a variety of situations, and it is important to understand the timing and reason behind it.

Non-filing of Return: If you have failed to file your income tax return within the specified period or even after the end of the relevant assessment year, the AO can issue a notice requiring you to submit the return. This is a legal reminder and not responding to it can lead to serious consequences.
Return Already Filed: Even if you have filed your return on time, the AO may still need further information or clarification. The officer may issue a Notice under Section 142(1) to ask for documents like bank statements, invoices, or explanation of certain deductions claimed in your return.
For Any Person: This notice can be sent to any individual, even if they were not originally required to file a return. In such cases, the person is required to file a return after receiving the notice.

Objectives Behind Issuing a Notice under Section 142(1)

The purpose of issuing an Income Tax Notice under Section 142(1) is to ensure that the Assessing Officer has all the necessary information to correctly assess the taxpayer’s income and calculate the correct amount of tax liability.

Some key objectives are:

To gather relevant documents, statements, or explanations from the taxpayer.
To ask the taxpayer to file their return if it has not been filed yet.
To verify the claims made in the filed return and check for inconsistencies or under-reporting.
To assess not only the taxpayer’s own income but also the income of any other person for whom the taxpayer is legally responsible (like a guardian or legal heir).

The notice helps the Income Tax Department maintain transparency, accuracy, and accountability during tax assessments.

Types of Requests Made in Notice under Section 142(1)

There are generally three types of requests that can be made through a Notice under Section 142(1):

Notice to File Income Tax Return

If you have not filed your income tax return within the prescribed due date, you may receive a Notice under Section 142(1)(i) asking you to file your return. This applies even if the due date under Section 139(1) has passed. Filing your return after getting this notice is mandatory and cannot be avoided.

Request for Specific Accounts or Documents

If you have already filed your return, the AO might ask you to submit certain supporting documents. These could include:

Profit and loss statements
Bank statements
Investment proofs
Rent receipts
Invoices and bills related to business or profession

This helps the AO verify that the information declared in your return is complete and accurate.

Request for Additional Information

Sometimes, the AO may ask you to provide a statement of assets and liabilities, even if these are not recorded in your books of account. This is to get a clearer picture of your financial position. Such details need to be submitted in a specific format as directed by the officer.

Penalty for Non-Compliance of Notice under Section 142(1)

Failing to respond to a Notice under Section 142(1) can lead to serious consequences. Here are the penalties and actions that can be taken:

Penalty under Section 271(1)(b): A fine of Rs.10,000 may be levied for failure to comply with the notice.
Best Judgment Assessment under Section 144: The AO can complete the assessment based on his own judgment, using the information available. This could lead to higher tax liability or denial of deductions.
Prosecution under Section 276D: In severe cases, the taxpayer may be prosecuted with imprisonment for up to 1 year, with or without a fine.
Search Warrant under Section 132: If the officer suspects concealment of income or evasion, they may issue a warrant for search and seizure.

It is, therefore, very important to take a Notice under Section 142(1) seriously and respond to it within the stipulated time.

How Can Taxpayers Protects Themselves?

Taxpayers can take several steps to protect themselves from penalties and ensure compliance when responding to a Notice under Section 142(1) of the Income-tax Act:

Provide Correct Accounts and Documents

Ensure that you submit all requested financial statements, receipts, bills, and other documents truthfully. Misreporting or hiding facts can lead to penalties.

Statement of Assets and Liabilities

If asked to provide this statement, know that prior approval from the Joint Commissioner is required before the AO can request it. Also, such information can be sought only for the previous three years.

Keep Records Ready

Even if you have already filed your return, always maintain proper documentation. These records help you respond correctly if you receive any inquiry from the department.

Timely and Accurate Response

Make sure you respond within the time mentioned in the notice. Delays or non-response can attract penalties or further legal action.

Sample Format of Income Tax Notice under Section 142(1)

While the actual format may vary, a Notice under Section 142(1) usually includes:

Name and PAN of the taxpayer
Assessment year involved
Details of what is being requested (filing of return, specific documents, etc.)
Time limit within which the taxpayer must respond
Consequences of failure to comply

This notice is often delivered via registered post or electronically through the Income Tax Portal.

Steps to Respond to the Notice under Section 142(1)

If you receive an Income Tax Notice under Section 142(1), you must respond through the official Income Tax e-filing portal. Here are the steps:

Log in to the e-filing portal: Use your PAN and password.
Go to Pending Actions: Click on the "E-proceedings" option.
Select the relevant notice: Under ‘View Notices’, find the notice issued under Section 142(1).
Submit Response: Click on ‘Submit Response’.
Choose Response Type: You can select either ‘Full Response’ or ‘Partial Response’ based on the availability of documents.
Upload Documents: Attach scanned copies of the documents requested.
Submit: Once you’re done, submit the response and keep an acknowledgment copy for your records.

Common Notices Relating to HRA and TDS – What You Should Know

Lately, many taxpayers have been receiving Income Tax Notices under Section 142(1) regarding claims made under House Rent Allowance (HRA) in Section 10(13A). This is especially the case where the employer has not deducted TDS under Section 194-IB.

If you have claimed HRA but your landlord did not provide a PAN or TDS was not deducted properly, you could be asked for supporting documents such as rent receipts, rent agreement, and proof of payment.

Conclusion

Receiving a Notice under Section 142(1) of the Income-tax Act does not always mean you have done something wrong. It is part of the Income Tax Department's process to ensure transparency and proper verification of tax returns. What matters most is how you respond.

If you receive such a notice, take prompt action, understand what is being asked, gather all necessary documents, and respond within the specified time. If you are unsure, consult a qualified tax professional who can help you respond correctly and avoid penalties.

In case of any doubts or need any support, connect with Compliance Calendar Experts through email at info@ccoffice.in or Call/Whatsapp at +91 9988424211.

FAQs

Q1. What is the purpose of a Notice under Section 142(1) of the Income-tax Act?

Ans. The purpose of a Notice under Section 142(1) is to either call upon the taxpayer to file their income tax return if it has not been filed, or to seek further information, documents, or clarification in relation to a filed return. It helps the Assessing Officer (AO) assess the taxpayer’s income accurately. It is not a penalty notice but a part of the inquiry process before assessment.

Q2. Can I receive a Notice under Section 142(1) even if I have already filed my Income Tax Return?

Ans. Yes, even if you have filed your Income Tax Return on time, you may still receive a Notice under Section 142(1). This happens when the Assessing Officer needs further clarification, documents, or explanation about the details mentioned in your return. It is a standard procedure to ensure correct assessment and transparency.

Q3. What should I do after receiving a Notice under Section 142(1)?

Ans. Once you receive a Notice under Section 142(1), you should carefully read the instructions and understand what information or documents have been requested. Log in to the Income Tax e-filing portal, go to the ‘e-Proceedings’ section, and submit your response along with the required documents within the time frame mentioned in the notice. Timely and accurate response is very important.

Q4. What happens if I don’t respond to the Notice under Section 142(1)?

Ans. Non-compliance with a Notice under Section 142(1) can lead to serious consequences. These include:

A penalty of Rs.10,000 under Section 271(1)(b).
Assessment of your income on a “Best Judgment” basis under Section 144, which may result in a higher tax demand.
Prosecution under Section 276D, which can lead to imprisonment for up to 1 year.
A search warrant can also be issued under Section 132 in serious cases.

Q5. Is there a time limit within which I must respond to the notice?

Ans. Yes, the notice will specify a time limit by which you must respond. Usually, the Notice under Section 142(1) gives you around 7 to 15 days to reply, but this may vary based on the specific case. It is important to respond within the given timeline to avoid penalties or adverse action.

Q6. Can someone receive this notice even if their income is below the taxable limit?

Ans. Yes, a Notice under Section 142(1) can be issued to any person, even if their income is below the taxable limit or if they are not otherwise required to file a return. Once the notice is issued, it becomes mandatory to respond and, if required, file a return regardless of whether your income is taxable or not.

Q7. Is professional help recommended for replying to a Notice under Section 142(1)?

Ans. Yes, it is advisable to seek help from a Chartered Accountant (CA) or a tax professional while replying to a Notice under Section 142(1). They can help you understand the requirements of the notice, prepare the correct documents, and draft a proper response to avoid penalties or further notices. Expert assistance ensures that your reply is accurate, complete, and legally compliant.