Got an Income Tax notice? Don't panic. Find yours below.
Every year the Income Tax Department issues lakhs of notices — most of them routine, some serious, a handful critical. The section number on top of your notice tells you exactly what's happening. Pick yours from the chips below to jump straight to a plain-English explainer, deadline clock, response steps, and a sample reply you can copy and adapt.
Twelve notices that account for ~95% of all IT correspondence.
The Income Tax Department issues notices under dozens of sections of the Income-tax Act, 1961 — but a small handful covers the vast majority of cases. Each card below gives you: severity, what it means, why you got it, deadline, what happens if you ignore it, the exact step-by-step response on the e-filing portal, and a sample reply template drafted in the formal register the department expects.
Severity legend. Routine = informational, often auto-generated, low risk. Serious = your return is under active examination, AO involvement. Critical = penalty, prosecution, or significant tax demand at stake — engage a CA / lawyer.
Section 143(1) — Intimation after processing your ITR
What it means
This is the most common notice — almost every taxpayer gets one. It is a system-generated "intimation" sent after the Centralised Processing Centre (CPC), Bengaluru runs your filed ITR through automated checks. It compares your declared figures against Form 26AS, AIS / TIS, employer-reported salary, bank-reported interest, and TDS data. The intimation tells you whether (a) everything matches and refund is being issued, (b) there are arithmetical or matching errors causing additional tax, or (c) refund is adjusted against past dues.
Why you got it
- Refund is being processed — congratulations, no action needed.
- Mismatch between your TDS claim and Form 26AS (very common — employer revised TDS return after you filed).
- Arithmetic / total error in the return; CPC has recomputed and demanded extra tax.
Step-by-step response on the portal
- Login to incometax.gov.in.
- Go to e-File → Income Tax Returns → View Filed Returns.
- Click "View Details" against the relevant AY → "Intimation u/s 143(1)" link.
- Compare Column A (your figures) and Column B (CPC computed). Identify the row of disagreement.
- If you agree with the additional demand → pay via Challan ITNS-280 under "Tax on regular assessment (400)" within 30 days.
- If you disagree → file a rectification under Section 154 (see template below) or a response on the e-Proceedings tab.
Sample response (disagreement on TDS mismatch)
To,
The Centralised Processing Centre,
Income Tax Department, Bengaluru.
Sub: Response to Intimation under Section 143(1) for AY [2024-25] —
PAN [ABCDE1234F], Acknowledgement No. [ITR-V Number],
DIN [10-character DIN from your notice].
Sir / Madam,
With reference to your intimation dated [DD-MM-YYYY] processed under
Section 143(1) of the Income-tax Act, 1961, I respectfully submit
that the demand of Rs. [amount] raised therein is not in order,
for the following reason:
TDS of Rs. [amount] deducted by [Employer name, TAN: XXXXXXXX]
has been disallowed in the intimation, whereas the same is
duly reflected in my Form 26AS as well as Annual Information
Statement (AIS) for the year. A copy of Form 26AS and the
TDS certificate (Form 16 / 16A) are enclosed for your reference.
Accordingly, I request your good office to kindly:
1. Allow the TDS credit of Rs. [amount] in full;
2. Withdraw the demand of Rs. [amount] raised in the intimation;
3. Issue the consequent refund of Rs. [amount] along with
interest under Section 244A.
Application under Section 154 for rectification has been filed
electronically with reference number [Rectification ID].
Thanking you,
[Full Name]
PAN: [ABCDE1234F]
Mobile: [______]
Email: [______]
Date: [DD-MM-YYYY]
Section 143(2) — Scrutiny Notice (your return is under detailed examination)
What it means
Where 143(1) is automated, 143(2) is human. Your return has been picked — either by the Computer Assisted Scrutiny Selection (CASS) algorithm or under "Compulsory Scrutiny" criteria — for line-by-line review by an Assessing Officer under the Faceless Assessment Scheme. The notice itself is short; it merely informs you that scrutiny has begun. The substantive questions arrive later via 142(1).
Why you got it
- High-value transactions in AIS not matching declared income (large credit-card spends, foreign remittances, real-estate purchases).
- Sharp jump or fall in declared income compared to prior years.
- Claims of exempt income (capital gains from listed shares, agricultural income) above thresholds.
- Random selection — yes, this happens.
Step-by-step response
- Verify the DIN on incometax.gov.in → "Authenticate Notice/Order".
- Login → Pending Actions → e-Proceedings → locate the open proceeding.
- Acknowledge receipt; the substantive notice (under 142(1)) listing specific questions will follow within weeks.
- Start preparing: bank statements (all accounts, all year), Form 26AS, AIS / TIS, investment proofs, computation sheet.
- Engage a Chartered Accountant now, not after 142(1) lands.
Sample response (acknowledgement)
To, The Faceless Assessing Officer, National Faceless Assessment Centre. Sub: Acknowledgement of Notice under Section 143(2) of the Income-tax Act, 1961 — AY [2024-25], PAN [ABCDE1234F], DIN [10-digit DIN]. Sir / Madam, I hereby acknowledge receipt of the notice under Section 143(2) dated [DD-MM-YYYY] selecting my return of income for AY [2024-25] for scrutiny assessment. I confirm my willingness to participate in the proceedings under the Faceless Assessment Scheme and shall furnish all information, documents, and explanations as may be called for from time to time under Section 142(1) of the Act. I have appointed [CA Firm name, FRN: XXXXXX] as my authorised representative; Form 35 / Power of Attorney is attached. All future correspondence may be addressed to me at the email [______] and to my representative at [______]. Yours faithfully, [Full Name] PAN: [ABCDE1234F] Date: [DD-MM-YYYY]
Section 142(1) — Inquiry / Call for Information
What it means
Issued either (a) to a person who hasn't filed a return when the AO believes one was due, or (b) more commonly, to a person under scrutiny asking for specific information / documents / accounts. Where 143(2) is the "you've been selected" notice, 142(1) is the actual questionnaire. Expect a list of 10–40 specific queries with attachments to upload.
Why you got it
- Follow-up to a 143(2) scrutiny — AO wants source of funds, bank statements, investment proofs.
- Non-filer notice — AIS shows you had taxable income but no return was filed.
- Specific transaction inquiry — large cash deposit, property transaction, foreign remittance.
Step-by-step response
- Read every query carefully — do not respond generically.
- Tabulate each query against the supporting document/explanation.
- Login → e-Proceedings → Submit Response → upload PDFs (max 5 MB per file).
- If you need more time → file Adjournment Request 2 days before deadline citing reasons.
- Submit response with covering letter; obtain acknowledgement reference number.
Sample response (covering letter)
To, The Faceless Assessing Officer, National Faceless Assessment Centre. Sub: Reply to Notice under Section 142(1) dated [DD-MM-YYYY] — AY [2024-25], PAN [ABCDE1234F], DIN [__________]. Sir / Madam, In response to your notice under Section 142(1) of the Income-tax Act, 1961, dated [DD-MM-YYYY], I respectfully submit my replies to the queries raised therein. A point-wise response is annexed hereto, together with the supporting documents in the form and manner sought. Annexure-I : Point-wise reply to queries 1 to [n] Annexure-II : Bank statements for the year (all accounts) Annexure-III : Form 26AS, AIS and TIS for AY [2024-25] Annexure-IV : Investment / sale-deed / loan documents Annexure-V : Computation of total income with reconciliation I trust the above is in order. Should your good office require any further clarification or document, the same shall be furnished forthwith. I respectfully submit that I have cooperated fully and no adverse inference may kindly be drawn. Yours faithfully, [Full Name] / Through [CA Firm Name, FRN: XXXXXX] PAN: [ABCDE1234F] Date: [DD-MM-YYYY]
Section 139(9) — Your filed return is defective
What it means
Your ITR was accepted on filing but, on validation, the CPC found a defect — usually a missing schedule, incomplete details, mismatch in tax / income figures, or wrong ITR form chosen for your income type. The notice tells you the defect and gives you 15 days to correct and re-file. If you don't, the return is treated as never having been filed.
Why you got it
- Wrong ITR form (filed ITR-1 when you had capital gains and should have used ITR-2 / 3).
- Income from business / profession but P&L and Balance Sheet schedules left blank.
- Tax declared but no tax paid / TDS claim doesn't reconcile with 26AS.
- Missing required attachments (e.g. audit report when turnover crossed threshold).
Step-by-step response
- Login → e-File → Respond to Notice u/s 139(9).
- Read the defect description carefully (it cites the schedule / row).
- Choose: Agree (and re-upload corrected return as response) or Disagree (with reasons).
- If correcting → use the offline ITR utility, fix the defect, generate JSON, upload via the response screen.
- Submit and download acknowledgement.
Sample response (corrective)
To, The Centralised Processing Centre, Bengaluru. Sub: Reply to Notice under Section 139(9) dated [DD-MM-YYYY] for AY [2024-25] — PAN [ABCDE1234F], Acknowledgement No. [ITR-V Number], DIN [__________]. Sir / Madam, In response to your notice cited above pointing out that the return filed by me was defective in that [reproduce the defect, e.g. "Schedule BP — Profit and Loss was not filled though business income was declared"], I have reviewed the return and agree with the defect noted. Accordingly, I have prepared a corrected return using the prescribed offline utility, addressing the defect in full. The corrected JSON is uploaded as my response on the e-Filing portal and bears acknowledgement reference [______]. I respectfully request your good office to treat the corrected return as a valid return filed within the time allowed under Section 139(9), and to process the same accordingly. Yours faithfully, [Full Name] PAN: [ABCDE1234F] Date: [DD-MM-YYYY]
Section 148 — Reassessment for income that escaped assessment
What it means
The AO has "reason to believe" that some income chargeable to tax escaped assessment for an earlier year. Post-Finance Act 2021, this is preceded by a Section 148A inquiry (show-cause notice 148A(b) and order 148A(d)). Once the 148 itself lands, you are required to re-file the return for that AY within 30 days. The reassessment that follows can substantially alter your tax liability and trigger penalty under 270A.
Why you got it
- AIS / SFT shows transactions you didn't declare (high-value cash deposits, mutual fund redemption, foreign remittance).
- Information from search / survey / third party (vendor declared sales to you that you didn't show as purchases).
- Tax-evasion-petition filed by an informer, validated by AO inquiry.
Step-by-step response
- Verify validity of the 148A(d) order — limitation, sanction by competent authority, jurisdiction.
- Login → e-File → Income Tax Returns → "File in response to Notice u/s 148".
- File the return for the relevant AY (you can revise the original computation; declare any escaped income honestly).
- Engage a CA / lawyer immediately — challenge invalid 148s in writ jurisdiction (High Court) before reassessment crystallises.
- Cooperate fully with the subsequent 142(1) inquiries that will follow.
Sample response (filing return + cover)
To,
The Assessing Officer / Faceless Assessment Unit,
Income Tax Department.
Sub: Return filed in response to Notice under Section 148
of the Income-tax Act, 1961 dated [DD-MM-YYYY] for AY [____] —
PAN [ABCDE1234F], DIN [__________].
Sir / Madam,
Pursuant to your notice cited above, I have, without prejudice
to my rights and contentions in the matter, electronically filed
the return of income for AY [____] on the e-Filing portal vide
Acknowledgement No. [______] dated [DD-MM-YYYY].
I respectfully submit that:
1. The return so filed declares my correct total income for
the relevant assessment year and is supported by all
contemporaneous records;
2. The information referenced in the order under Section
148A(d) dated [DD-MM-YYYY], namely [reference to AIS entry
/ SFT report], has been duly considered and reconciled
in the computation now filed;
3. I reserve the right to raise all legal grounds, including
limitation, jurisdiction and validity of the proceedings,
at the appropriate stage of the assessment.
I shall produce all books of account, bank statements and
documents as and when called for under Section 142(1).
Yours faithfully,
[Full Name] / Through [CA Firm / Advocate]
PAN: [ABCDE1234F]
Date: [DD-MM-YYYY]
Section 245 — Adjustment of refund against past demand
What it means
You have a refund coming for the current AY, but the department's records show an outstanding demand for an earlier AY. Under Section 245, the AO must give you 30 days' intimation before adjusting (setting off) the refund against the old demand. The notice itemises the past demand and asks you to either agree to the adjustment, dispute the demand, or pay the difference.
Why you got it
- Old 143(1) intimation demand you forgot to clear (very common).
- Past year's tax / interest / penalty demand pending in CPC system.
- Wrong PAN matching — sometimes someone else's demand sticks to your PAN; this needs grievance.
Step-by-step response
- Login → Pending Actions → Response to Outstanding Demand.
- Check each demand year and its source (143(1), 143(3), 154, etc.).
- Pull up the original intimation/order for that AY.
- Choose: "Demand is correct" / "Disagree with demand" with reasons / "Demand is correct but rectification under 154 has been filed".
- Upload supporting documents.
Sample response (disagreement)
To,
The Centralised Processing Centre, Bengaluru.
Sub: Response to Notice under Section 245 dated [DD-MM-YYYY] —
proposed adjustment of refund of Rs. [______] for AY [2024-25]
against demand of Rs. [______] for AY [____] —
PAN [ABCDE1234F], DIN [______].
Sir / Madam,
With reference to the captioned notice, I respectfully disagree
with the proposed adjustment. The demand of Rs. [______] for
AY [____] is not maintainable for the following reasons:
1. The said demand arose from intimation under Section 143(1)
dated [DD-MM-YYYY], which disallowed TDS credit of
Rs. [______]. The same TDS is duly reflected in Form 26AS
and a rectification application under Section 154 was
filed on [DD-MM-YYYY] vide reference [______] and is
pending disposal.
2. Pending disposal of the said rectification, no recovery /
adjustment may be effected.
I respectfully request that the proposed adjustment under
Section 245 be kept in abeyance until the rectification under
Section 154 is disposed of, and the refund of Rs. [______]
for AY [2024-25] be released without adjustment.
Yours faithfully,
[Full Name]
PAN: [ABCDE1234F]
Date: [DD-MM-YYYY]
Section 154 — Rectification of mistake apparent on record
What it means
Section 154 is double-edged. (a) The AO / CPC may issue a notice under 154 informing you of a "mistake apparent on record" being corrected — usually adverse to you. (b) You can also yourself file a rectification application under 154 to fix arithmetical errors, missed TDS credits, wrong tax computation, or set-off of losses. Mistakes must be "apparent on record" — debatable issues are out of scope.
Why you got it (or why you'd file one)
- CPC realised it disallowed valid TDS — issuing rectification suo motu (good news).
- CPC discovered an under-reporting in earlier intimation and is rectifying upward (bad news).
- You spotted that your refund excludes TDS that was reflected in 26AS post-filing.
Step-by-step response
- Login → Services → Rectification.
- Select AY and request type (return data correction / tax credit mismatch / reprocess).
- Upload the corrected XML/JSON or simply trigger reprocessing if your data is now correct in 26AS.
- Track rectification reference; CPC typically disposes in 3–8 weeks.
Sample (rectification application)
To, The Centralised Processing Centre, Bengaluru. Sub: Application under Section 154 of the Income-tax Act, 1961 for rectification of intimation dated [DD-MM-YYYY] for AY [_____] — PAN [ABCDE1234F]. Sir / Madam, I respectfully submit that the intimation under Section 143(1) dated [DD-MM-YYYY] for AY [____] contains a mistake apparent on record, namely: TDS of Rs. [______] deducted by [Deductor name, TAN: ______] has not been allowed in the intimation, while the same is fully reflected in Form 26AS (a copy is enclosed) and was duly claimed in my return. The error is purely arithmetical / clerical in nature and is amenable to rectification under Section 154 of the Act. I therefore respectfully request that the intimation be rectified to allow the TDS credit of Rs. [______] and the consequent refund of Rs. [______] be issued to me along with interest under Section 244A. Enclosures: 1. Copy of intimation under Section 143(1) 2. Form 26AS for AY [____] 3. Form 16 / 16A from the deductor Yours faithfully, [Full Name] PAN: [ABCDE1234F] Date: [DD-MM-YYYY]
Section 271(1)(c) / 270A — Penalty for concealment or under-reporting
What it means
Issued after an assessment order has added income or disallowed claims. The AO is putting you on notice that, over and above the additional tax, a penalty equal to 100%–300% of the tax sought to be evaded (under old Section 271(1)(c)) or 50%–200% (under post-FY 2016-17 Section 270A) is being considered. You must show cause why penalty should not be levied. This is a separate proceeding from the assessment itself.
Why you got it
- Quantum addition was made in 143(3) / 144 / 147 assessment.
- Loss of bonafide-belief defence — repeat additions in similar facts are penalty-attractive.
- Mis-reporting (a higher class than under-reporting) → penalty 200%, no compounding.
Step-by-step response
- Identify whether the notice cites the limb (concealment vs furnishing inaccurate particulars) — defective limb-citation is a defence.
- Check whether the appeal against the quantum order is filed — penalty often gets stayed / set aside if quantum is deleted.
- Login → e-Proceedings → submit detailed reply citing bonafide belief, full disclosure in return, applicability of Explanation 1.
- For 270A → consider Section 270AA "immunity from penalty" if conditions are met (paid additional tax, didn't appeal).
Sample (show-cause reply)
To,
The Assessing Officer,
[Designation].
Sub: Show Cause notice under Section 271(1)(c) / 270A of the
Income-tax Act, 1961, dated [DD-MM-YYYY], for AY [____] —
PAN [ABCDE1234F], DIN [______].
Sir / Madam,
In response to the captioned show-cause notice, I respectfully
submit that no case for levy of penalty is made out, on the
following grounds:
1. The addition of Rs. [______] made in the assessment order
dated [DD-MM-YYYY] is the subject matter of appeal pending
before the CIT(A) vide Form 35 filed on [DD-MM-YYYY] (Appeal
No. [______]). Penalty proceedings ought to be kept in
abeyance pending disposal of the quantum appeal.
2. The income now added was disclosed in the books of account
and supporting documents; there has been no concealment of
income or furnishing of inaccurate particulars within the
meaning of Explanation 1 to Section 271(1)(c). The dispute
is one of legal interpretation, not of factual concealment.
3. The notice itself does not specify the limb under which
penalty is proposed (concealment OR inaccurate particulars),
which renders the proceedings vitiated as held in
CIT v. Manjunatha Cotton & Ginning Factory and approved
by the Hon'ble Supreme Court.
4. Without prejudice, the matter is squarely covered by the
bonafide-belief defence, the assessee having relied on
[contemporaneous CA opinion / settled judgment / standard
industry practice].
In the premises, I respectfully pray that the show-cause notice
be discharged and penalty proceedings dropped.
Yours faithfully,
[Full Name] / Through [Counsel]
PAN: [ABCDE1234F]
Date: [DD-MM-YYYY]
Section 156 — Notice of Demand
What it means
Once any tax, interest, penalty, or fine is determined as payable under any order of the Act, a Section 156 notice is issued specifying the amount and the date by which it must be paid. It is the operative recovery instrument — once demand crystallises, recovery action (attachment of bank account, salary garnishee, asset attachment) can follow.
Why you got it
- Assessment order under 143(3) / 144 / 147 created demand.
- Penalty order created demand.
- Appellate order partly upheld AO and balance demand was raised.
Step-by-step response
- If you accept demand → pay via Challan ITNS-280 (Type 400 — regular assessment) within 30 days.
- If you dispute → file appeal to CIT(A) in Form 35 within 30 days; simultaneously apply for stay of demand under Section 220(6).
- For stay → standard practice is to deposit 20% of demand and seek stay of balance pending appeal.
- Login → Pending Actions → Response to Outstanding Demand → record stay/appeal status.
Sample (stay of demand application)
To, The Assessing Officer, [Designation]. Sub: Application for stay of demand under Section 220(6) read with Section 156 of the Income-tax Act, 1961, for AY [____] — PAN [ABCDE1234F], demand of Rs. [______] dated [DD-MM-YYYY]. Sir / Madam, The demand of Rs. [______] raised vide notice under Section 156 dated [DD-MM-YYYY] arose from the assessment order dated [DD-MM-YYYY], against which I have preferred appeal before the CIT(A) in Form 35 dated [DD-MM-YYYY] (Appeal No. [______]). In terms of CBDT Instruction No. 1914 read with O.M. dated 31.07.2017, where an appeal is pending and the assessee has deposited 20% of the disputed demand, stay of the balance demand is to be granted as a matter of course. I confirm having deposited Rs. [20% amount] under Challan [BSR / serial / date] (copy enclosed). I respectfully request that the balance demand of Rs. [80% amount] be stayed pending disposal of the appeal by the CIT(A). Grounds of appeal involve substantial questions and prima facie case is in my favour, as elaborated in the appeal memorandum. Yours faithfully, [Full Name] PAN: [ABCDE1234F] Date: [DD-MM-YYYY]
Section 131 — Summons / Production of Books and Personal Attendance
What it means
Section 131 vests the AO / Investigation Wing with the powers of a civil court — summon any person, examine on oath, compel production of books, issue commissions. It is most often issued during an investigation (search / survey / TEP-led inquiry) and is among the most consequential pre-assessment notices. Replies are recorded as sworn statements admissible in subsequent proceedings.
Why you got it
- You are connected to a search / survey on a third party (vendor, contractor, tenant).
- Investigation Wing wants statements on oath about specific transactions.
- Foreign-asset / black-money inquiry under BMA, 2015.
Step-by-step response
- Engage a counsel before the date of attendance — non-negotiable.
- Pull every document called for; index them; carry originals + 2 sets of copies.
- Attend on the appointed date and time at the specified office (physical, not faceless).
- Statement on oath — answer narrowly, factually; never speculate. Decline to answer questions outside scope.
- Read the recorded statement in full before signing each page; mark corrections in your hand.
Sample (attendance + records cover)
To, The [Deputy / Asst.] Director of Income Tax (Investigation), [Address as per summons]. Sub: Compliance with Summons under Section 131 of the Income-tax Act, 1961, dated [DD-MM-YYYY] — PAN [ABCDE1234F], Summons No. [______]. Sir / Madam, Pursuant to your summons cited above, I [Full Name], holding PAN [ABCDE1234F] and resident at [Address], am attending in person before your good office on [DD-MM-YYYY] at [HH:MM] hrs to record my statement on oath. I am also producing the following records called for in the summons: 1. Bank statements of all accounts for FY [____] to FY [____] 2. Books of account / cash book / ledger for FY [____] 3. Copies of agreements with [Third Party] dated [DD-MM-YYYY] 4. ITR acknowledgements and computation sheets for AYs [____] A complete index of records is enclosed at Annexure-A. I am accompanied by my authorised counsel, [Name, Bar Council Registration: ______], who shall remain present during the recording of statement. I confirm that I shall extend full cooperation to the proceedings and shall furnish such further information / documents as may be required during the course of inquiry. Yours faithfully, [Full Name] PAN: [ABCDE1234F] Date: [DD-MM-YYYY]
Section 143(3) — Assessment Order under Scrutiny
What it means
This is the final order passed at the end of a 143(2) scrutiny — a written, reasoned document determining your assessed total income and tax payable. It either accepts your returned income, makes additions / disallowances and raises additional demand, or grants enhanced refund (rare). The order is appealable to the CIT(A) under Section 246A within 30 days.
Why you got it
- Conclusion of 143(2) scrutiny — every scrutiny ends with a 143(3) order or a 144 best-judgment order.
- The order tabulates each addition / disallowance, AO's reasoning, and your reply (if any) considered.
Step-by-step response
- Read the entire order — note each addition with the AO's reason.
- Compare against your responses on record; identify violations of natural justice (replies ignored, fresh material relied on without being shown).
- If accepting → pay demand within 30 days (challan 400).
- If contesting → file Form 35 with CIT(A) along with statement of facts, grounds of appeal, fee.
- Simultaneously file 220(6) stay application for the demand.
Sample (acknowledgement + appeal intent)
To, The Faceless Assessing Officer, National Faceless Assessment Centre. Sub: Receipt of Assessment Order under Section 143(3) dated [DD-MM-YYYY] for AY [____] — PAN [ABCDE1234F], DIN [______]. Sir / Madam, I acknowledge receipt of the captioned assessment order determining the total income at Rs. [______] as against the returned income of Rs. [______], with consequent demand of Rs. [______] vide notice under Section 156 of even date. Without prejudice, I respectfully submit that the additions / disallowances made in the order are not sustainable in law or on facts. Accordingly, I am preferring an appeal before the Commissioner of Income Tax (Appeals) under Section 246A in Form 35 within the time prescribed. A separate application under Section 220(6) read with CBDT Instruction No. 1914 has been filed for stay of the disputed demand pending the appellate proceedings, having deposited 20% of the demand. This intimation is solely for record purposes and shall not be construed as acceptance of the order or any part thereof. Yours faithfully, [Full Name] / Through [CA Firm] PAN: [ABCDE1234F] Date: [DD-MM-YYYY]
Section 263 — Revision by Principal Commissioner / Commissioner
What it means
The PCIT / CIT exercises a suo motu power to revise an assessment order if, in their view, the order is "erroneous and prejudicial to the interest of the revenue". The revision can result in a direction to redo the assessment, leading to fresh additions and demand. It is a powerful tool that bypasses the regular appellate hierarchy and is dreaded for that reason.
Why you got it
- Audit objection raised by C&AG / internal audit on your assessment.
- PCIT noticed the AO did not examine a specific issue at all (lack of inquiry — most common ground).
- AO accepted a claim that PCIT considers patently inadmissible.
Step-by-step response
- Read the show-cause notice; identify what specific aspect of the original order PCIT considers erroneous.
- Demonstrate that AO did apply mind — pull the 142(1) replies, AO's queries, your responses.
- Cite the "two views" defence — if AO chose one of two legally tenable views, 263 cannot apply (Malabar Industrial Co., SC).
- Engage senior counsel; argue jurisdiction first (was order erroneous AND prejudicial — both required).
- If 263 order does pass → appeal directly to ITAT within 60 days.
Sample (show-cause reply)
To,
The Principal Commissioner of Income Tax / Commissioner,
[Designation].
Sub: Show-cause notice under Section 263 of the Income-tax
Act, 1961 dated [DD-MM-YYYY] for AY [____] —
PAN [ABCDE1234F], DIN [______].
Sir / Madam,
In response to the captioned show-cause notice proposing
revision of the assessment order dated [DD-MM-YYYY] passed
under Section 143(3), I most respectfully submit that the
order sought to be revised is neither erroneous nor
prejudicial to the interest of the revenue, for the following
reasons:
1. The Assessing Officer specifically called for, examined,
and was satisfied with the explanation on [issue] vide
notice under Section 142(1) dated [DD-MM-YYYY] (query
no. [n]) and my reply dated [DD-MM-YYYY] (paragraphs
[n] to [n+x]). The AO has therefore applied his mind;
the case is not one of "lack of inquiry".
2. Even on merits, the view taken by the AO is one of two
possible legally tenable views, and is supported by the
judgment of [High Court / Tribunal in case citation]. As
held in Malabar Industrial Co. Ltd. v. CIT (2000) 243
ITR 83 (SC) and CIT v. Max India Ltd. (2007) 295 ITR
282 (SC), where the AO has taken a permissible view,
the order cannot be branded as erroneous merely because
the Commissioner takes a different view.
3. No prejudice has been caused to the revenue, the income
having been correctly computed in accordance with law.
In the premises, I respectfully pray that the proposed
revision under Section 263 be dropped.
Yours faithfully,
[Full Name] / Through [Senior Counsel]
PAN: [ABCDE1234F]
Date: [DD-MM-YYYY]
Got a notice today? Do these six things, in order.
Verify it's real (5 minutes)
Pull the DIN from the notice. Go to incometax.gov.in → Quick Links → "Authenticate Notice/Order Issued by ITD". Enter DIN. If it doesn't match, ignore — fake notices are increasingly common via WhatsApp/email phishing.
Identify the section (1 minute)
Top-right of every genuine notice carries the Act and Section. Match it against the library above. Take a screenshot of the section and the deadline date — pin it.
Note the deadline + work backward (5 minutes)
Every notice carries a "compliance deadline". Add it to your calendar with two reminders: 7 days before (start drafting) and 2 days before (final submission). Missing a deadline is the #1 reason people lose disputes they would otherwise win.
Pull supporting documents (30 mins to 2 hours)
Form 26AS, AIS / TIS, ITR acknowledgement + computation, bank statements for that AY, all TDS certificates, investment proofs claimed under deductions. Save in a single folder named with PAN + AY + section.
Decide: solo or CA?
Routine notices (143(1), 154, simple 245, 139(9)) — handle yourself with the templates above. Anything serious or critical (143(2), 142(1), 148, 156 demand, 271, 263, 131) — engage a CA. Cost: ₹5,000 to ₹75,000 depending on complexity. Don't optimise on this; one bad reply contaminates the entire chain of subsequent proceedings.
Reply via e-Proceedings; never email; never ignore
The portal is the only authoritative channel. Login → Pending Actions → e-Proceedings. Upload your reply (PDF, < 5MB per file), get acknowledgement reference number, save it. The receipt of your filing is what protects you legally — not the substance, ironically.
The single worst thing you can do is ignore a notice and hope it goes away. Even if you have nothing to say substantively, file a one-paragraph acknowledgement on the portal with a request for an adjournment of [n] days. Engagement preserves rights; silence forfeits them.
Eight things everyone asks about IT notices.
Is the notice I got real or fake?
Genuine notices issued after 1 October 2019 carry a Document Identification Number (DIN). Authenticate it at incometax.gov.in → "Authenticate Notice/Order Issued by ITD" → enter DIN. If the portal cannot match it, the notice is fake — phishing is increasingly common via WhatsApp/SMS. Never click any links inside the email/SMS; always go to the portal directly.
How do I verify a notice on the portal?
Two layers. Layer 1: DIN authentication (above) — proves the notice was issued by ITD. Layer 2: login to your e-Filing account → Pending Actions → e-Proceedings. The notice should be visible there with the same DIN. If it's only in your inbox but not on the portal, treat it as suspicious.
Can I extend the deadline?
For most notices, yes. File an Adjournment Request via e-Proceedings at least 2-3 days before the deadline, citing a clear reason — illness, travel, document collection, CA unavailability, ongoing related proceeding. AOs typically grant 15-30 day extensions in routine matters. Don't wait until the last day; late adjournment requests are routinely refused.
What is e-Proceedings?
e-Proceedings is the faceless interface inside the income-tax portal where 99% of notice correspondence happens since 2020. Login → Pending Actions → e-Proceedings. You will see every open notice with status, deadline, AO unit, and an upload box for your reply. All adjournment requests, document submissions, and AO responses live here forever — it's the legal record.
Can I just ignore a notice?
Almost never advisable. For 143(1) intimations where you fully agree (refund coming) — yes, no action needed. For literally everything else, ignoring escalates the matter: best-judgment 144 assessment, ₹10,000 penalty under 271(1)(b) per failure, recovery proceedings, prosecution under 276CC for non-filing, attachment of bank accounts. Even a one-line acknowledgement on the portal preserves your position.
What if I'm an NRI / not in India?
The Faceless Assessment Scheme is the great equaliser. Every notice can be answered entirely online via e-Proceedings — no physical presence required for 99% of cases. Engage an Indian CA / lawyer to draft replies and upload them; you sign via Digital Signature Certificate (DSC) or Aadhaar OTP. Where personal hearings are called for, video conferencing is now standard.
How long does ITD keep records?
Indefinitely, in practice. Returns from 1962 onwards are digitised and accessible to the AO via the back-office Insight portal. Section 148 reassessment can normally reopen up to 3 years (10 years in cases involving income escapement > ₹50 lakh). The faceless e-Proceedings server retains every upload, AO order, and response forever — keep your own copies regardless.
What if the notice is for an old AY (e.g. 2018-19)?
First, check limitation. A 148 notice for AY 2018-19 issued today is almost certainly time-barred unless escapement > ₹50 lakh. Limitation is a jurisdictional fact and a strong defence — challenge it via writ to the High Court if PCIT sanction is defective. Recover supporting records: old Form 26AS for that AY is available on the TRACES portal indefinitely; recover bank statements via Net Banking or branch.