FAQs on Notice under Section 142(1) of the Income-tax Act

Notice under Section 142(1) of the Income Tax Act — Detailed FAQs

Section 142 of the Income-tax Act, 1961 empowers the Assessing Officer to make enquiries and call for information for the purpose of making an assessment. In particular, Section 142(1) authorises the Income Tax Department to issue a notice requiring the taxpayer to furnish a return of income, produce accounts or documents, or provide information and explanations relevant to the assessment proceedings. Receiving a notice under Section 142(1) of the Income Tax Act often causes uncertainty because it typically asks for information, documents, or explanations beyond what was filed in the return. Many taxpayers confuse this notice with scrutiny or penalty proceedings. In reality, section 142(1) is a fact-finding and information-gathering provision that enables the Income Tax Department to call for details necessary to complete assessment proceedings.

A notice under section 142(1) is procedural in nature and is intended to enable the Assessing Officer to gather facts necessary to complete the assessment correctly. Unlike notices issued under section 143(2), which initiate scrutiny assessment, section 142(1) operates as an information-seeking mechanism and may be invoked at various stages of the assessment process, including cases where a return has not been filed or where further details are required after processing or during scrutiny. This FAQ page explains the scope, purpose, compliance requirements, and consequences of a notice under section 142(1), in the context of the Income-tax Act and prevailing departmental practice.

Notice under Section 142(1) of Income Tax Act requesting information and documents
Understanding the scope and compliance requirements of Notice under Section 142(1) of the Income-tax Act

Frequently Asked Questions-Notice under Section 142(1)

A notice under section 142(1) is a statutory notice issued by the Income Tax Department calling upon a taxpayer to furnish information, documents, explanations, or to file a return of income, as required for making an assessment. The notice is issued to ensure that the Assessing Officer has complete and accurate information before finalising the assessment.

A notice under section 142(1) can be issued at any stage of assessment proceedings, including before issuance of a notice under section 143(2) or after scrutiny proceedings have commenced. It may also be issued where a return of income has not been filed.

No. A notice under section 142(1) is not restricted to scrutiny assessments. It may be issued for obtaining information, calling for documents, or requiring filing of a return, even where scrutiny proceedings have not yet commenced.

Under section 142(1), the Assessing Officer may call for books of account, bank statements, confirmations, explanations regarding income or deductions, reconciliation statements, or any other information considered necessary for making an assessment.

Yes. Where a taxpayer has failed to file a return of income within the prescribed time, the Assessing Officer may issue a notice under section 142(1) requiring the taxpayer to furnish a return.

Yes. Compliance with a notice issued under section 142(1) is mandatory. Failure to comply may lead to adverse consequences, including completion of assessment under section 144 (Best Judgment Assessment).

A notice under section 142(1) is generally served electronically through the Income Tax e-filing portal and is also communicated to the registered email address of the taxpayer.

The notice specifies the time within which compliance is required. The taxpayer must respond within the stipulated time or seek an extension through the e-Proceedings facility, where permitted.

Yes. A taxpayer may seek adjournment or additional time by submitting a request through the Income Tax e-filing portal, explaining the reasons for seeking extension. Grant of extension is at the discretion of the Assessing Officer.

Failure to comply with a notice under section 142(1) may result in the Assessing Officer proceeding to complete the assessment to the best of judgment under section 144, which may involve estimated additions and higher tax demand.

Yes. Notices under section 142(1) are issued and complied with electronically under the Faceless Assessment Scheme, with all communication conducted through the Income Tax e-filing portal.

Yes. Non-compliance with a notice under section 142(1) may attract penalty under section 272A, in addition to other consequences under the Act.

A notice under section 142(1) itself is not appealable. However, issues arising from non-compliance or from the assessment order passed thereafter may be challenged in appeal against the final assessment order.

The taxpayer should carefully review the notice, collect the information or documents called for, and submit a complete and accurate response within the prescribed time through the e-Proceedings facility. Professional assistance may be sought where complex issues are involved.

Key Takeaway

Section 142(1) serves as a critical information-gathering tool in the income tax assessment process. It enables the Income Tax Department to seek clarity, documents, and explanations necessary to complete an assessment accurately and fairly. The provision is procedural in nature and does not, by itself, indicate concealment of income or initiation of penal action.

Timely and accurate compliance with a notice under section 142(1) plays a decisive role in preventing escalation of proceedings into scrutiny disputes or Best Judgment Assessment under section 144. Since assessments under the faceless regime rely heavily on electronic submissions, clarity, completeness, and prompt response assume even greater importance.

Understanding the scope and intent of section 142(1) allows taxpayers to treat the notice as an opportunity to place facts on record, rather than as an adverse action. Proper compliance significantly reduces litigation risk and ensures smoother completion of assessment proceedings.

Income Tax assessment process involving Notice under Section 142(1)
FAQs explaining Notice under Section 142(1) issued for seeking information during income tax assessment

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Disclaimer

This FAQ is for informational purposes only and does not constitute legal or professional advice. Tax positions should be evaluated based on individual facts and applicable law.