Section 143(1)(a): Notice for Proposed Adjustments

Important Keyword: Due date, IT Notice, Section 139(5), Section 143(1)(a).

Section 143(1)(a): Notice for Proposed Adjustments

The Income Tax Department verifies the details provided in the return filed by the taxpayer. If there are any discrepancies, the department issues a notice or intimation to the taxpayer, instructing them to make corrections. Before starting any assessment procedure, the department issues a notice under Section 143(1)(a), which outlines the proposed adjustments to the return. After the taxpayer responds to this notice, the department begins the assessment procedures and issues a final order.

What is Notice Under Section 143(1)(a)

Section 143(1)(a) notice of proposed adjustments involves the electronic processing of tax returns by the Centralized Processing Center (CPC) in Bengaluru. This notice is a preliminary communication and not a final assessment. It indicates discrepancies or adjustments in the filed income tax return based on the provided information. The taxpayer is given the opportunity to respond to these proposed adjustments before a final assessment is made.

Such notice is issued for the following reasons:

Section	Reason
143(1)(a)(i)	Arithmetical Error in ITR
143(1)(a)(ii)	Incorrect Claim in ITR
143(1)(a)(iii)	Disallowance of loss claimed in ITR
143(1)(a)(iv)	Disallowance of expense claimed in ITR
143(1)(a)(v)	Disallowance of deduction claimed in ITR
143(1)(a)(vi)	Addition of income appearing in Form 26AS, Form 16 or Form 16A

Notice u/s 143(1)(a)(i)

Notice under this sub-section is issued when there is an arithmetical error in the return. The notice specifies the income categories where discrepancies exist between the calculations based on the taxpayer’s filed return and the department’s calculations.

Notice u/s 143(1)(a)(ii)

A notice under this sub-section is sent when there are discrepancies in the Income Tax Return you have filed. An incorrect claim in your return can occur in the following situations:

1. Mismatch of Information: The details provided in one section of your Income Tax Return do not align with the information given in another section.
2. Omission of Required Information: Important details that should be included in the return are missing.
3. Exceeding Deduction Limits: The deductions claimed in the return go beyond the allowable limits set by the Income Tax Act.

Notice u/s 143(1)(a)(iii)

If you file your Income Tax Return after the due date specified under section 139(1), you are not allowed to carry forward losses. If you still claim these losses, the Income Tax Department will issue a notice under section 143(1)(a)(iii) to disallow them.

Notice u/s 143(1)(a)(iv)

This notice is sent when an expense has been incorrectly claimed in the Income Tax Return. If the audit report disallows certain expenses and you claim them while filing your return, these will be disallowed, and you will receive a notice under section 143(1)(a)(iv).

Notice u/s 143(1)(a)(v)

A notice under this sub-section is issued if you have incorrectly claimed certain deductions in your Income Tax Return. Deductions under sections like Sec 10AA and Sec 80H to Sec 80RRB in Chapter VI-A cannot be claimed if the return is filed after the due date specified under section 139(4). If these deductions are claimed, a notice under section 143(1)(a)(v) will be issued to disallow them.

Notice u/s 143(1)(a)(vi)

This notice is received when there is a mismatch between the details of TDS (Tax Deducted at Source) on salary as per Form 26AS or Form 16 and the TDS details reported in the Income Tax Return. There can also be mismatches between TDS as per Form 16A and the income details reported. Specifically, this can occur if the Business or Profession Income reported under Schedule BP in the return does not match the gross receipts or turnover in the Tax Credit Statement (Form 26AS).

• The salary reported under Schedule S in the return does not match the gross salary in the Tax Credit Statement i.e. Form 26AS.

• Taxable Salary in ITR does not match with the Taxable Salary as per Form 16. This indicates that the taxpayer has included an additional deduction in the ITR that doesn’t appear in Form 16.

Communication of proposed adjustment u/s 143(1)(a)

Notification Process by the CPC
The Central Processing Centre (CPC) at the income tax portal will send the intimation letter under section 143(1)(a) to your registered email or mobile number. This notice will be password-protected. To open it, use your PAN in lowercase followed by your date of birth in DDMMYYYY format. For example, if your PAN is AAGPR1212A and your date of birth is 02/10/1980, the password will be aagpr1212a02101980.

Time Limit for Issuing the Notice
The Income Tax Department can issue this notice within nine months from the end of the financial year in which the return is filed. For example, if Ms. Priya filed her income tax return on 25th July 2023, she could receive a notice under section 143(1)(a) until 31st December 2024. This period allows for 9 months from the end of the financial year in which the return was filed.

If you do not receive any intimation within this period, it means that the calculations of the Income Tax Department matched the details provided in your filed return.

Due Date for Submitting a Response
Upon receiving a notice under section 143(1)(a), you must file a response within 30 days from the date of the notice. Your options include:

1. Agreeing to the Discrepancies
   • Accept the proposed adjustments.
2. Disagreeing with the Discrepancies
   • Submit a response explaining your reasons for disagreement.
3. Partially Agreeing to the Discrepancies
   • Submit a response explaining which parts you disagree with and why.

In any of the above cases, you have the option to submit a revised return under section 139(5).

How to File Response to Notice u/s 143(1)(a)

1. Login to the e-filing portal and navigate to Pending Actions > e-Proceedings from the dashboard.
2. View NoticesClick on the option to View Notice for adjustment u/s 143(1)
   
3. Notice pdfClick on the Notice/Letter pdf.
   
4. Download the noticeYou will be able to view the notice issued to you. If you wish to download the notice, click Download.
   
5. Respond to NoticeClick on the option to submit a response.
   
6. Details of the Prima Facie AdjustmentsYou will be able to view the details of the Prima Facie Adjustments found by CPC in your filed ITR. Click on each variance to respond.
   
7. Provide ResponseOn clicking the variance, details of the variance will be there. To respond to the particular variance, click Provide Response.
   
8. Response from dropdownSelect the relevant response from the dropdown and click Save after responding to each Prima Facie Adjustment.
   
9. Proceed to e-verify your responseAfter providing all the responses, click “Back.” This action will take you to the details of the Prima Facie Adjustment that CPC found in your filed ITR. Once you respond to each variance, the system will save your responses. Click Continue, Select the Declaration checkbox, and click Proceed to e-Verify.
   
10. Successful VerificationOn successful e-Verification, a success message will be there along with a Transaction ID. You will also receive a confirmation message on your email ID registered on the e-filing.
    

Read More: Reprocess the ITR : e-Filing portal

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Official Income Tax Return filing website: https://incometaxindia.gov.in/