Got a tax notice asking for more info? Experts explain what it could mean

It's meant to gather more information about a person's tax returns and must be acted upon carefully. Here is how to do that

If you’ve received a notice under Section 142 of the Income Tax Act, don’t worry: It is meant to get more information before the tax department finalises your assessment. “It’s often just the assessing officer’s fact 'finding exercise, not a final demand,” says Rohit Ahuja, partner of Ved Jain & Associates,

 

Sarvam Ritam Khare, advocate 'on??'record at Supreme Court, and Vijay Bharech, director at Deloitte India, recommended these steps to manage the notice.

 

Two reasons for a Section 142 notice

 

Compelling a return

 

Under Section 142(1)(i), an assessing officer (AO) will send a reminder if you miss your Income Tax return deadline:  July 31 for non 'audit cases and October 31 for audit mandated filings. “This notice serves both as a reminder and a statutory directive,” says Bharech. If you get one, file your return in the required format.

 

Requesting Documents or Evidence

 

Clauses (ii) and (iii) let the AO ask for your books, statements or summon you (or your accountant) for questions, even if you have already filed returns. “This usually follows third party data like SFTs or bank statements showing possible discrepancies,” says Ahuja.

 

Bharech says that such notices often mean a taxpayer’s return is under scrutiny and they will have to submit proofs for deductions, invoices and any other records.

 

Three Year Limit

 

“The AO cannot demand documents older than three years from the end of the previous year,” Khare says. Bharech adds: “For a notice covering FY24, only FY24 and the three prior years are fair game.” If you’re asked for older records, mention the overreach in your written reply that it is beyond 3 years 

 

Filing response

 

Compliance through the electronic-filing portal (e-filing) is mandatory now. These steps will ensure you do it correctly.

 

• Log in at www.incometax.gov.in → Pending Actions → E Proceedings → View Notices → Submit Response. 
• Select ‘Full’ or ‘Partial Response,’ tick the declaration box and click Continue. 
• Attach documents (PDF/Excel/CSV; maximum 10 files of 5 MB each). 
• Name files clearly, e.g., Income Tax Return – FY 2023-24.pdf. 
• Download the acknowledgement or screenshot the confirmation. 
• Need more time? Use “Seek Adjournment” (up to 15 days).

 

Consequences of Non Compliance

 

Khare warns that not responding to a notice can lead to a bigger tax demand and reduce options for appeal. Bharech notes the AO has 12 months from the end of the assessment year (for years starting April 1, 2022 onward) to pass such an order — and may do so without a hearing if a Section 142 notice is already on record. “Respond promptly, give accurate information and meet all deadlines. If a best judgment order does occur, you can still appeal to higher authorities,” he says.