Sec. 139 of the Income Tax Act enables the taxpayers to file the income tax return either voluntarily or on-demand instructed by the income tax department issued under Section 142(1). It is crucial to apprehend the procedure after the filing made by the taxpayer of the return of income.
The income tax authority maintains an initial inspection of all the returns filed and notifies taxpayers of the outcome of such primary examination. This examination mainly possesses mathematical mistakes, internal inconsistencies, tax analysis, and tax payment confirmation. The communication made to the taxpayer after the primary examination is referred to as intimation specified under Section 143(1). The primary examination is completely automated, does not have any manual intervention, and is delegated to the Centralised Processing Center (CPC).
A person must file Section 143(1) intimation within one year from the ending of the financial year in which the return is being submitted. When the taxpayer applied for a return in July 2019 for the financial year 2019-20, can send the analysis by 31 March 2021.
In case no intimation is sent to the taxpayer within such period, then no adjustments are carried out to the return filed by the taxpayer. Here, no modification in tax liability and declaration filed itself is prescribed under Section 143(1) intimation.
A taxpayer will obtain intimation under Section 143(1) if any one of the below-mentioned conditions prevails:
If the taxpayer had paid an extra amount for taxation and is eligible to acquire a refund from the Department. In that case, the taxpayer will obtain intimation and the refund amount determined on the intimation order. When the refund amount exceeds Rs. 100, it will be executed by the Income Tax Department, or it will not be accomplished.
If the taxpayer has paid less than the precise amount, the taxpayer is responsible for disbursing. In that case, the Income Tax Department would dispatch intimation notice with the amount to be paid specified on the notice.
After the examination of intimation u/s 143(1), it is obvious that there is a guarantee of documents in which there are two columns, i.e. ‘As provided by the taxpayer in Return of Income’ and ‘As computed under Section 143(1)’.
The outcome received after comparison are categorised into 3 categories i.e.
No demand No refund: According to this type, specific adjustments have been produced, which are noted in intimation u/s 143(1). After these adjustments, there is no direction from the Income Tax Authority, nor does it owe any restitution to the taxpayer.
Demand determined: In this case, after making specific adjustments by the Income Tax Authority, it is noticed that there must be some different price of tax by the taxpayer. There can be a crisis in which the taxpayer may approve, disapprove or even settle for raising a modified Income Tax Return submission.
Refund determined: If there is an expenditure of some reimbursement amount to the taxpayer, the payment can be sent to the taxpayer by the mailing address or deposited into the bank account.