Common Income Tax Notices Received by Indian Businesses and How to Handle Them

• company law
• March 30, 2026

Common Income Tax Notices Received by Indian Businesses and How to Handle Them

1. Intimation Under Section 143(1)

• Automated adjustment after ITR processing.
• Check for:
• Mismatch in income.
• Disallowance of certain deductions.
• Action: Compare with filed ITR, correct errors by filing revised return if needed.

2. Notice Under Section 139(9) – Defective Return

• Issued when the return is considered defective.
• Common reasons:
• Missing financial statements for business/ profession.
• Mismatch in mandatory fields.
• Action: Correct defects and file a corrected return within time specified.

3. Scrutiny Notice Under Section 143(2)

• Detailed examination of return.
• Limited scrutiny vs complete scrutiny.
• Action:
• Engage CA / tax professional.
• Compile all supporting documents (books, bank statements, agreements).

4. Notices for Mismatch With AIS/TIS or Form 26AS

• Triggered by differences between reported income and data with department.
• Examples:
• High-value deposits, securities transactions, foreign remittances.
• Action:
• Reconcile differences.
• File updated return / response on portal explaining position.

5. Demand Notices

• Raised when tax, interest, or penalty is payable.
• Action:
• Verify computation.
• If correct, pay within due date.
• If incorrect, file rectification request u/s 154 or appeal as advised.

6. General Best Practices

• Check income tax e-filing portal regularly for new notices.
• Keep email and mobile updated.
• Respond within timelines to avoid adverse orders.
• Maintain organized records to reduce stress during notice handling.