Section 143 (1) of Income Tax Act

In India, every person within the tax bracket has to provide income details to the Income Tax (IT) department. These are submitted by way of filing IT returns. Once filed, the IT department verifies the claims made for their correctness through assessment. According to the rules of the IT department, there are four main assessments:

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Assessment under section 143(1), also known as a summary assessment, is done without calling the assessee.
Assessment under section 143(3), also known as scrutiny assessment.
Assessment under section 144, also known as best judgment assessment.
Assessment under section 147, also known as income escaping assessment

See also: Income tax assessment order: What is it and why is it issued?

Section 143(1) of IT Act: Summary assessment

Known as summary assessment, this is a preliminary stage assessment that is carried out without calling the taxpayer or the assessee.

The notification for section 143(1) of the IT Act is sent to the income taxpayer in the form of a computer-generated automated message that indicates an error made while filing income tax returns, which may be any interest that has to be paid or is refundable.

see also about: Section 80CCC of Income Tax Act

Section 143(1) of IT Act: Time-limit

As per the Income tutorial, titled ‘Various Assessments Under The Income Tax Law’, assessment under section 143(1) can be made within 9 months from the end of the financial year when the tax return is filed.

see also: Section 115AD of the Income Tax Act: Features and applicability

Section 143(1) of IT Act: Who gets section 143(1) intimation?

Simply put, a taxpayer gets a Section 143(1) intimation

It is an acknowledgement from the IT department that the tax returns filed are correct.
When he has paid excess tax and tax refundsare initiated for amounts more than Rs 100.
When the tax paid is less than required. The intimation will mention the amount to be paid and a challan that will ask for making the tax payment.

At this stage, only a preliminary check is done without any scrutiny. The total income received or loss is calculated after making the following adjustments:

any calculation mistake in the return
an incorrect claim was mentioned in the return
disallowance of loss claimed, if the return of the previous year, for which set-off of loss is claimed, was furnished beyond the due date specified under section 139(1)
disallowance of expenditure indicated in the audit report but not taken into account while computing the total income in the return
disallowance of deduction claimed u/s 10AA, 80IA to 80-IE, if the return is furnished beyond the due date specified under section 139(1)
addition of income appearing in Form 26AS, Form 16A or Form 16, which has not been included in computing the total income in the return

See also about: section 143(2) of income tax act

Section 143(1) of IT Act: Corrective procedure

Note that the IT department cannot make any adjustments concerning a return furnished for the assessment year 2018-19 and thereafter.

It can be made only after the taxpayer is notified about such adjustments in writing or electronic mode. In case the taxpayer responds to the notification (or challenges it), it shall be considered. In case of no response within 30 days, the IT department can make the adjustments.

Under section 234F, a penalty of Rs 5,000 will be charged if the return of income is not filed within the due dates as mentioned under Section 139(1). However, it shall be Rs 1,000 if the total income of an assessee is not more than Rs 5 lakh.

Section 143(1) of IT Act: Notification password

Once a taxpayer gets the computer-generated notification under Section 143(1) of the IT Act, he has to open it using a password.

The income Tax returns password is the PAN number in lowercase, followed by the date of birth in the DDMMYYYY format with no space.

Section 143(1) of IT Act: How a taxpayer should respond

When a taxpayer receives notification under Section 143(1) of IT Act, the first step is to check if details, such as PAN number and name, match your details.
Check the reason for the notification. If it’s a tax refund, note that tax refunds are made only if the amount is more than Rs 100.
If it is about the tax payable, check and identify the error and pay the due amount. However, if you disagree with the notification, contact the Income Tax department for It’s a good idea to get in touch with your CA to identify and resolve the issue.