Income Tax Notice: 8 Sections Every Taxpayer Should Know

Receiving an income tax notice does not automatically mean you have done something wrong. The Income Tax Department may send a notice because of a mismatch in your return, missing information, an outstanding tax demand, a proposed adjustment, or a routine scrutiny check.

What matters is the section mentioned in the notice. It tells you why the department has contacted you, what information it wants, and what you need to do next.

There is also an important rule change taxpayers should understand. The Income-tax Act, 2025 became effective from April 1, 2026, but proceedings relating to AY 2026-27 and earlier generally continue under the Income-tax Act, 1961. For example, the Income Tax Department specifically states that a defective return notice for AY 2026-27 can still be issued and handled under Section 139(9) of the 1961 Act.

This guide explains eight commonly encountered sections under the 1961 Act that taxpayers should recognise when dealing with older assessment years and ongoing proceedings.

Income Tax Notice Sections at a Glance

Section	What it generally relates to	What the taxpayer should check
Section 139(9)	Defective income tax return	Error mentioned in the return and response deadline
Section 143(1)(a)	Proposed adjustment while processing ITR	Income, deduction, tax credit or calculation mismatch
Section 143(2)	Scrutiny assessment	Documents supporting claims made in the return
Section 142(1)	Information or return requested by Assessing Officer	Specific records and information sought
Sections 148A and 148	Possible income escaping assessment	Transaction or income identified by the department
Section 156	Tax demand	Amount demanded, assessment order and payment deadline
Section 245	Refund adjustment against tax demand	Whether the outstanding demand is correct
Section 131	Summons for evidence or documents	Attendance and records specifically requested

The exact response date mentioned in your notice should always take priority over a general deadline quoted elsewhere.

1. What Is a Notice Under Section 139(9)?

A notice under Section 139(9) means the Income Tax Department considers your filed return defective because some required information is missing, incomplete, or inconsistent.

A defective return does not necessarily mean your income was concealed. It can result from an ordinary filing error.

The Income Tax Department lists examples such as:

• claiming TDS credit without reporting the related income
• reporting receipts that do not match Form 26AS or AIS
• leaving required balance sheet or profit and loss schedules incomplete
• inconsistencies in information reported in the return
• entering income or tax details incorrectly

The department generally gives taxpayers 15 days from receipt of the notice, or the period specified in the notice, to correct the defect. An extension may also be requested through the portal.

What happens if you ignore a Section 139(9) notice?

Your return may be treated as invalid.

That can have wider consequences, including loss of certain benefits or the inability to carry forward eligible losses, depending on the circumstances.

What should you do?

Read the defect description before modifying anything. Correct the specific error identified by the department and make sure the revised information is consistent with your Form 16, Form 26AS, AIS, TIS and other supporting records.

2. What Does a Section 143(1)(a) Notice Mean?

Section 143(1)(a) deals with proposed adjustments while your income tax return is being processed.

The Centralised Processing Centre may identify an apparent discrepancy and propose changing the income, deduction, loss or tax calculation reported in your return.

For example, an adjustment may arise because:

• a figure in the return contains an arithmetic error
• a claim appears inconsistent with information in the return
• a deduction does not meet the conditions apparent from the filed information
• income appearing in tax records has not been reported correctly

Section 143(1) allows specified adjustments while processing a return. The department’s limitation guidance also states that taxpayers generally have 30 days to respond to a proposed adjustment under Section 143(1)(a).

Should you automatically accept the adjustment?

No.

First compare the proposed adjustment with your return, Form 16, Form 26AS, AIS, deduction documents and tax-payment records.

If the department’s information is correct, accepting the adjustment may be appropriate. If the adjustment is based on an incorrect interpretation or mismatch, submit a reasoned response with supporting evidence.

3. What Is a Section 143(2) Scrutiny Notice?

A Section 143(2) notice generally means your return has been selected for scrutiny.

This is more detailed than normal return processing. The Assessing Officer may examine whether income has been correctly reported, deductions are supported, losses have been calculated properly, or tax has been paid correctly.

Under the 1961 Act, the department could require the taxpayer to produce evidence supporting the return.

Scrutiny may involve questions about areas such as:

• capital gains
• property transactions
• large deductions
• business expenses
• foreign assets or income
• bank transactions
• investment activity
• differences between the ITR, AIS, TDS records and other reported information

Does a scrutiny notice mean tax evasion is suspected?

Not necessarily.

A return may be selected for scrutiny because of risk parameters, reported transactions, inconsistencies, or issues requiring verification.

The key is to respond precisely to what has been asked rather than sending large amounts of unrelated information.

What documents should you keep ready?

Depending on the issue, you may need bank statements, broker statements, invoices, salary documents, capital-gain calculations, property papers, deduction proofs, books of account or other supporting records.

The department’s limitation guidance states that a Section 143(2) notice under the 1961 Act generally had to be served within three months from the end of the financial year in which the return was furnished.

4. What Is a Notice Under Section 142(1)?

A notice under Section 142(1) is an inquiry before assessment.

The Assessing Officer can use this provision to ask a taxpayer to:

• file a return if one has not been filed
• produce specified accounts or documents
• provide written information on particular matters
• furnish information relating to assets and liabilities where legally required

The Income Tax Department describes Section 142(1) as a provision that allows the Assessing Officer to seek a return, accounts, documents or other information needed for assessment.

Why might you receive one?

Suppose your AIS shows a high-value transaction, but the Assessing Officer needs more information to understand its tax treatment.

A Section 142(1) notice might ask for supporting documents explaining the source and nature of the transaction.

What should you do?

Answer each question separately and attach documents in an organised manner.

Do not ignore the notice. Failure to comply with notices such as Sections 142(1) and 143(2) can attract consequences under the tax law.

5. What Are Notices Under Sections 148A and 148?

Sections 148A and 148 relate to situations where the Income Tax Department believes income may have escaped assessment.

In simple terms, the department has information suggesting that taxable income may not have been assessed correctly in an earlier year.

What happens under Section 148A?

Section 148A generally provides a pre-notice process.

The taxpayer is given information indicating possible escaped income and an opportunity to explain why reassessment should not proceed.

The Income Tax Department states that, under the applicable 1961 Act rules, the taxpayer is ordinarily given at least seven days but not more than 30 days to respond to a show-cause notice under Section 148A, subject to the applicable provisions.

What happens under Section 148?

If the Assessing Officer decides reassessment should proceed, a notice under Section 148 may require the taxpayer to furnish a return for the relevant period.

Common triggers can include information concerning:

• unreported investments
• property transactions
• securities transactions
• foreign income or assets
• large financial transactions
• income that does not appear to match the filed return

How far back can the department reopen a case?

For reassessment of periods governed by the 1961 Act, the time limits depend on factors including the amount of income alleged to have escaped assessment.

For notices governed by the post-September 1, 2024 provisions, official guidance states that the time window differs where escaped income is below ₹50 lakh and where it is ₹50 lakh or more.

Reassessment is one area where professional tax advice can be particularly useful because limitation periods, procedural requirements and the underlying facts can materially affect the case.

6. What Is a Notice of Demand Under Section 156?

A Section 156 notice means the department says you have an amount payable under the Income-tax Act.

The demand may relate to:

• additional income tax
• interest
• penalty
• another amount arising from a tax order

Section 156 requires the notice of demand to specify the amount payable. In some cases, an intimation generated after processing a return can itself operate as a notice of demand.

How long do you have to pay?

Under Section 220 of the 1961 Act, an amount specified in a Section 156 demand notice is generally payable within 30 days from service of the notice, although a shorter period may apply in certain circumstances and the specific notice should always be checked.

What if the demand is wrong?

Do not pay it blindly and do not ignore it.

First reconcile:

• tax already paid
• TDS and TCS credits
• challans
• previous assessment orders
• rectification orders
• interest calculations
• the assessment year attached to the demand

If the demand is incorrect, use the appropriate response, rectification or appeal process depending on why the mismatch arose.

7. What Does an Intimation Under Section 245 Mean?

A Section 245 intimation usually becomes relevant when you are due an income tax refund but the department’s records show an outstanding tax demand.

Instead of issuing the entire refund, the department may propose adjusting all or part of it against the outstanding amount.

Section 245 permits eligible tax authorities to set off a refund against tax remaining payable after giving the taxpayer an intimation about the proposed action.

Example

Suppose your current return shows a refund of ₹35,000.

The department’s system also shows an older outstanding demand of ₹12,000.

You may receive an intimation proposing to adjust ₹12,000 against that demand and issue only the balance, subject to the applicable process.

What should you check?

Confirm whether the old demand is actually valid.

Old demands can sometimes persist because of missing tax credits, unmatched challans, earlier rectification issues or disputes that have already been resolved.

If you disagree with the demand, respond with the relevant supporting records rather than automatically agreeing to the adjustment.

8. What Is a Summons Under Section 131?

Section 131 gives specified income tax authorities powers similar to those available to a civil court for certain purposes.

These include powers relating to:

• discovery and inspection
• enforcing a person’s attendance
• examining a person on oath
• compelling production of books and documents

A Section 131 summons should therefore be treated more seriously than a routine informational communication.

Why might someone receive a Section 131 summons?

It may be connected with an inquiry, assessment or investigation where the department needs documents, evidence or a person’s statement.

Importantly, the recipient is not always the taxpayer whose tax liability is being examined. A person may possess information relevant to another proceeding.

How should you respond?

Read the summons closely to determine:

1. who has been asked to appear
2. the date and time
3. which documents are required
4. the financial period involved
5. whether personal attendance is specifically required

For a material or complex matter, consider consulting a chartered accountant or tax professional before responding.

How Do You Verify Whether an Income Tax Notice Is Genuine?

Do not rely only on an email, SMS or PDF attachment.

Log in to the official Income Tax e-Filing portal directly and check your pending actions or e-Proceedings.

The department’s e-Proceedings service allows registered users to view and respond to notices, intimations and letters issued by the Assessing Officer, CPC and other income tax authorities. The portal specifically supports communications such as defective-return notices, proposed Section 143(1)(a) adjustments and other departmental notices.

A sensible verification process is:

1. Log in to the Income Tax e-Filing portal directly.
2. Open Pending Actions.
3. Check e-Proceedings and outstanding demands where relevant.
4. Match the assessment year, PAN and communication details.
5. Read the complete notice and attachments.
6. Check the response deadline before preparing your submission.

Avoid clicking payment links or sharing banking credentials simply because an email claims to be from the tax department.

What Should You Do Immediately After Receiving an Income Tax Notice?

Start by identifying the section, assessment year or tax year, issue raised and response deadline.

Then:

1. Read the entire notice. Do not rely on the email subject line.
2. Verify it on the e-Filing portal.
3. Identify the section. This tells you the nature of the proceeding.
4. Compare the notice with your records. Check the ITR, AIS, Form 26AS, TIS, Form 16, tax challans and transaction documents.
5. Gather supporting evidence. Keep documents directly relevant to the issue.
6. Respond within the stated deadline. Ask for an extension where the portal and applicable law permit it if genuinely necessary.
7. Keep proof of submission. Save the acknowledgement and final response.
8. Seek professional help where needed. This is especially sensible for scrutiny, reassessment, large demands, summons or complex factual disputes.

The Income Tax Department’s e-Proceedings service allows taxpayers to submit responses and supporting attachments online for many types of proceedings.

Income-tax Act, 2025: Do These Old Section Numbers Still Matter?

Yes, particularly during the transition.

The Income-tax Act, 2025 became operational from April 1, 2026, and section numbers under the new legislation have changed. However, taxpayers may continue to see familiar 1961 Act section numbers for older assessment years.

For example, the department clarifies that:

• AY 2026-27, covering income of FY 2025-26, continues to use the old Act framework.
• Tax Year 2026-27, covering income from April 1, 2026 onward, falls under the new Act framework.
• Proceedings concerning AY 2026-27 and earlier can therefore continue under the Income-tax Act, 1961.

The e-Filing portal is supporting compliance under both legislative frameworks during the transition.

This distinction matters because searching only for an old section number without checking the year involved can lead to the wrong conclusion about your notice.

FAQs

Key Takeaways

• An income tax notice does not automatically mean you have committed a tax violation.
• Always identify the section, year, issue raised and deadline before responding.
• Section 139(9) concerns defective returns, while Section 143(1)(a) concerns proposed return-processing adjustments.
• Sections 142(1) and 143(2) generally involve information requests and assessment scrutiny.
• Sections 148A and 148 concern possible income escaping assessment.
• Section 156 relates to a tax demand, while Section 245 can involve adjusting a refund against an existing demand.
• A Section 131 summons can require attendance, evidence or documents and should be handled carefully.
• Verify notices through the official e-Filing portal rather than relying solely on email or SMS.
• Because the Income-tax Act, 2025 took effect on April 1, 2026, always check whether your proceeding falls under the 1961 Act or the new Act before relying on a section number.

This article is for general educational purposes and should not be treated as individual tax or legal advice. The correct response to a notice depends on its wording, the applicable tax year and the taxpayer’s facts.