You receive Notice for Demand u/s 156 when the Assessing Officer (A.O.) raises demand for any tax, interest, penalty, fine or other sum to be payable by you as a result of any order passed under the Income Tax Act.
Notice for sum payable u/s 143(1) , 200A (1), 206CB (1) shall be deemed to be Notice of Demand u/s 156.
The amount payable by you under this notice shall be paid within 30 days of receipt of the notice. However, the A.O. in some cases, with prior approval from Joint Commissioner of Income Tax (JCIT) can ask you to deposit amount in less than 30 days.
Options to respond to Outstanding Demand Notice
There are four options available with a taxpayer to respond against outstanding demand notice. Given below are the options :
- Demand is correct.
- Demand is partially correct.
- Disagree with demand.
- Demand is not correct but agree for adjustment.
Guide on how to respond to outstanding demand
Option 1 : Now if you click on Demand is correct
If assessees selects “Demand is correct”, then a pop up is displayed as given below. Click on submit button and a confirmation message is displayed on the screen for accepting the demand and –
If a refund is due, the outstanding amount and the interest will be adjusted against the refund due. Otherwise, you must pay the demand immediately.
Option 2 : Demand is partially correct
If assessees selects “Demand is partially correct” then below screen will be displayed
Now enter the amount which is correct, then click on submit and given below screen will be displayed along with incorrect amount which will be auto populated
Now assessee has to select any reason of disagreement, based on reason selected, assessee needs to provide additional information as below:-
- Demand has already been paid: If you select this option then provide the Challan Identification Number (CIN). Also mention BSR code, date of payment, the serial number of challan and amount.
- Demand has already been reduced by rectification/revision – Provide the date of order, demand amount after rectification , details of AO etc as given in below screen
- Demand has already been reduced by appellate order but appeal effect has to be given by the department – Provide the date of order and the appellate order passed by (details of appellate authority, and the reference number of order).
- Appeal has been filed - If you select this reason then details given in screen below needs to be provided
- Rectification/revised return has been filed at CPC – If you select this reason, then please provide additional information related to this
- Rectification has been filed with assessing officer – Mention the date of application and remarks (comments, if any of the taxpayer).
- Others - If there is any other reason apart from mentioned above then select this reason and provide you comment
Option 3 : Disagree with demand
If assessees is totally disagree with demand then select “Disagree with demand” then below screen will be displayed
Select the appropriate reason.Reason are similar as available under ‘Demand is partially correct’.and discussed above
Option 4 : Demand is not correct but agree for adjustment
If taxpayer selects this option then given below screen will be displayed
If you click on continue then assessee has to select reasons for disagreement similar to “Demand is partially correct”
Time limit to respond to the demand
The assessee shall pay the amount of demand within 30 days from the date of service of notice. However, in some exception cases, time period of thirty days may be reduced by the assessing officer with prior approval of joint commissioner.
An assessee can also make an application to the AO to extend the time for payment or allow payment by installment, provided application should be made before expiry of thirty days.
Consequences of delay/ Penalty for delay
- Interest u/s 220(2) – Interest at a rate of one percent per month or part of the month which is payable after expiry of 30 days. Such interest shall be payable by the assessee even if Assessing officer has approved the application for extension of time period for the payment or allow payment by installment.
- Penalty u/s 221 – A penalty may be imposed by the Assessing Officer up to the amount demanded in demand notice provided a reasonable opportunity of being heard is given to the assessee. If the assessee proves that the default was for good and sufficient reasons, no penalty shall be levied.
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Did you receive tax notice? Let us help you respond to the IT Department.
- Tax2win has expertise in responding to Income Tax Department
- Our experts would help you avoid legal consequences by assisting in responding accurately.
Frequently Asked Questions
Q- Does a salaried person gets an income tax department notice?
Ans, Notices sent by the department is not depend upon the income of a person it depend upon the how correctly return is filed. So salaried person can also get the departmental notices.
Q- I have got Notice of Demand under section 156 of the Income Tax Act, 1961 for rs 30. But the income tax website shows no records found under e-file -> response to outstanding tax demand. What should I do now?
Ans. If there is no outstanding demand as per income tax website, then no amount is required to be paid by you.
Q- What happen if Income Tax (Rs.40 lakhs total) has not paid after final notice?
Ans, If the demand is not paid after the final notice then department will take actions to recovery of demand by seize the bank account and make further actions.
Q- What will happen if I disagree with a tax demand notice?
Ans. If assessee is disagree with the tax demand notice then he can challenge the same to the next higher authority.
Q- What is the meaning of assessee in default?
Ans. If the amount is not paid which is specified in the demand notice within 30 days of service of notice then assessee is become assessee in default.
Q- Can I refile my taxes before e-verifying (ITR-V) my original returns?
Ans. A revised return is filed for edited the original return. There is no need to e verify the original return only revised return can be verified.
Q- How can I check my tax notice online?
Ans. First login to the Income Tax Site through PAN, Password and Captcha code and then select the Respond to Outstanding Tax Demand in e-File option, and you can check the tax demand notice.
Q- How do you respond to notice 143 1?
Ans. First login to the Income Tax Site through PAN , Password and Captcha code and then click on e-proceeding and you can respond to the notice 143 (1).
Q- Can revised return be filed after 143 1?
Ans. Yes, revised return can be filed even after issue of intimation under section 143(1).
Q- What happens if I don't respond to the notice within 30 days?
Ans. If we don’t respond to the notice within 30 days , the amount determined by the tax authorities will be considered income of assessee.
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