Income Tax News: Many taxpayers awaiting their income tax refunds often face delays due to notices issued by the Income Tax Department. One of the key reasons behind refund delays is a mismatch in Income Tax Returns (ITR) or deduction claims flagged by the system as doubtful. Understanding the types of notices and responding to them correctly is crucial to avoid further delays or penalties.
News: Why Income Tax Refunds Get Delayed
Refunds are usually held back when the tax department detects inconsistencies between the return filed and the data available with it, such as information from banks, employers, or financial institutions. Automated systems now actively flag discrepancies, prompting the issuance of notices for clarification or correction.
Common Types of Income Tax Notices
Notice Under Section 139(9): Defective Return
One of the most common notices is issued under Section 139(9), which treats the return as “defective.” This typically happens due to:
- Missing balance sheet or profit and loss details
- Incorrect tax payment or challan information
- Mismatch in income figures
Taxpayers are given a specific time period to rectify the defect. If the issue is not corrected within the stipulated time, the return may be treated as invalid, which can lead to loss of refund and other complications.
Notice Under Section 142(1): Seeking Information
A Section 142(1) notice is issued when the Income Tax Department seeks additional details, documents, or explanations. Such notices may also be sent to individuals who have not filed their return, asking them to do so.
These notices are mainly information-gathering in nature, but they must be responded to carefully and completely, as non-compliance can lead to further scrutiny or penalties.
Intimation Under Section 143(1)
An intimation under Section 143(1) is not a scrutiny notice but a preliminary communication. It highlights:
- Arithmetical errors
- Mismatch between reported income and department data
- Calculation of tax payable or refund due
If the taxpayer agrees with the adjustment, no action is required apart from paying any tax demand. If there is a disagreement, a rectification request can be filed online.
How Taxpayers Should Respond
Tax experts advise taxpayers to:
- Regularly check emails and the Income Tax e-filing portal
- Respond within the prescribed timelines
- Upload correct documents and explanations
- Seek professional advice in case of complex notices
Ignoring or delaying responses can result in refund blockage, penalties, or further assessment proceedings.
Key Takeaway for Taxpayers
With increased digitisation and data matching, the Income Tax Department is issuing notices more frequently. Timely and accurate responses are essential to ensure smooth processing of refunds and avoid unnecessary legal or financial stress.
Taxpayers are advised to remain vigilant and proactive to prevent refund delays during the current assessment cycle.
