Legal Reference
Section 143(1) equivalent (intimation), Section 268 (limited scrutiny), Section 270 (complete scrutiny), Section 279 (reassessment), Section 285 (rectification), ITA 2025
1. Why Do Notices Come?
Income tax notices are more common than many taxpayers realise — and receiving one does not necessarily mean wrongdoing. Most notices are computer-generated and arise from mismatches between the ITR and AIS data, missing income, or routine scrutiny selection. Understanding the type of notice helps craft the right response promptly.
2. Common Types of IT Notices
| Notice Type | Reason | Required Action |
|---|
| Intimation under Section 257A (143(1)) | CPC processed ITR and found arithmetic error or TDS mismatch | Pay demand OR file rectification if wrong |
| Section 268 — limited scrutiny | Specific item in ITR requires clarification (e.g., large deduction, capital gain mismatch) | Respond with documents within 15-30 days |
| Section 270 — complete scrutiny | Full examination of ITR (risk-based or compulsory selection) | Comprehensive documentary response |
| Section 279 — reassessment | IT Dept has information that income escaped assessment | Respond showing all income was disclosed |
| Section 285 — rectification | AO found an error in assessment order | Respond if the proposed rectification is wrong |
| Section 148 equivalent (notice for return) | No return was filed for a year | File return immediately with explanation |
3. What Not to Do When You Receive a Notice
- Do NOT ignore the notice — it has deadlines; ignoring results in ex-parte assessment
- Do NOT panic — most notices are resolvable with documentation
- Do NOT respond inaccurately — false information in response attracts penalties
- Do NOT miss the deadline — extension requests must be timely
4. What To Do Immediately
- Read the notice carefully — identify the section, assessment year, and specific query
- Check if the notice is legitimate — verify on IT Portal under e-Proceedings
- Gather relevant documents — bank statements, Form 26AS, AIS, investment proofs, contracts
- Prepare a factual, point-by-point response addressing each query
- Submit online through IT Portal (e-Proceedings section) before deadline
5. AIS Mismatch Notices
The most common trigger today: AIS shows income (interest, dividends, property sale) that was not reported in the ITR. The IT Department AI system auto-compares AIS with ITR and generates notices for unexplained items. Solution: always reconcile AIS before filing ITR; if items in AIS are incorrect, use the AIS feedback mechanism to mark them and file ITR with correct figures.
6. Why TaxClue
Proper notice response requires both legal knowledge and accounting accuracy. TaxClue reviews notices, identifies correct response strategy, and submits comprehensive replies. Contact us for notice handling under ITA 2025.
Disclaimer
This article is for general informational and educational purposes only. It does not constitute legal, financial, or professional tax advice. Readers are advised to consult a qualified Chartered Accountant or tax professional before making any decisions. TaxClue Consultech Pvt Ltd accepts no liability. All case studies and examples in this article are illustrative only and do not represent actual persons or transactions.
Need Help with Compliance?
Our CA experts guide you through the entire process — registration to filing.
❓ Frequently Asked Questions
Why did I receive an income tax notice?
Income tax notices arise for various reasons: your ITR shows income lower than AIS data (mismatch notice); CPC automated processing found an arithmetic error or TDS mismatch (Section 257A intimation); your case was selected for limited or complete scrutiny; the IT Department has information suggesting income escaped assessment (reassessment); or you missed filing an ITR for a year (return notice). Most notices are computer-generated and resolvable with proper documentation.
What is the difference between scrutiny and reassessment notices?
Scrutiny (Section 268 — limited, or Section 270 — complete) is for the current assessment year ITR — the AO is examining the ITR you filed for completeness and accuracy. Reassessment (Section 279) is for a past year's assessment that was already completed — the AO has new information suggesting income was not assessed. Scrutiny must begin within 6 months; reassessment can go back 3-5 years (or longer for search cases).
How do I check if a notice is genuine?
All genuine income tax notices are available on the Income Tax Portal under 'Pending Actions' or 'e-Proceedings.' Login with your PAN credentials and check there. Notices are also served to your registered email. Any notice demanding immediate payment by WhatsApp, email link, or phone call is fraudulent — do not click links or make payments based on such communications. The genuine portal URL is incometax.gov.in.
What happens if I ignore an income tax notice?
Ignoring an income tax notice is one of the worst things a taxpayer can do. The AO will pass an ex-parte assessment order — based entirely on the information they have, without your input. This typically results in large additions to income and significant tax demand, plus interest and potential penalties. The demand then goes through the recovery process — bank account attachment, TDS on future salary, property attachment. Always respond within the deadline, or request an extension.
What is an AIS mismatch notice?
The IT Department's automated system compares each filed ITR with the AIS data. If income reflected in AIS (bank interest, dividends, property sale, large cash deposits) is not reported in the ITR, the system generates an AIS mismatch notice asking the taxpayer to explain the discrepancy. To avoid these notices, always download and reconcile AIS before filing ITR. If any AIS entry is incorrect, use the feedback mechanism to dispute it and file ITR with correct figures.
