Section References
| Legislation | Section | Description |
|---|---|---|
| IT Act 1961 | Section 142(1) | Inquiry before assessment — power to call for return, accounts, or statement |
| IT Act 2025 | Section 268(1) | Corresponding provision under the new Income Tax Act, 2025 |
What is This Notice?
A Section 142(1) notice is a preliminary inquiry notice issued by the Assessing Officer (AO) as part of their power to gather information before or during an assessment proceeding. It is one of the AO's most frequently used tools and can be issued in three distinct situations:
- To file a return — If you have not filed your Income Tax Return (ITR), the AO can issue this notice directing you to file one within the specified time period. This applies even if your income may be below the taxable threshold, if the AO has reason to believe you had taxable income.
- To produce accounts or documents — During the course of an assessment proceeding, the AO can call for specific books of account, financial records, bank statements, contracts, or any other documents relevant to the computation of income or verification of claims made in the return.
- To furnish a statement — The AO may require you to furnish a written statement on oath or otherwise, containing specific information relevant to the assessment being conducted. This may include explanations of entries, details of transactions, or information about third parties.
This notice does not by itself mean you are under scrutiny — it is a tool the AO uses to gather information during any type of assessment proceeding. Receiving a Section 142(1) notice is not an allegation of wrongdoing; it is simply a request for information or documents to enable the AO to complete the assessment process.
Deadline to Respond
Important: If you need more time to compile documents or accounts, you must formally request an extension in writing before the deadline expires. File a written application to the AO explaining the reason for the delay and the additional time required. Courts have held that a bona fide request for extension must be considered by the AO, but there is no automatic right to an extension — act promptly and do not wait until the last day.
Consequences of Non-Response
Failing to respond to a Section 142(1) notice can result in serious legal and financial consequences:
- Best judgment / ex-parte assessment under Section 144 [new Section 271]: The AO can proceed to make an assessment of your income to the best of their judgment, without your input. This almost always results in an inflated demand since the AO will make adverse assumptions in the absence of information from you.
- Penalty under Section 271(1)(b) [new Section 441]: A penalty of ₹10,000 for each failure to comply with a notice under Section 142(1) can be levied. Multiple non-compliances can result in cumulative penalties.
- Prosecution under Section 276D [new Section 483]: For willful failure to produce accounts or documents as required by the notice, prosecution can be initiated, which may result in imprisonment of up to one year plus a fine. While prosecution is rare for first-time or inadvertent defaults, it remains a live legal risk for deliberate non-compliance.
How to Respond
Responding to a Section 142(1) notice correctly and completely is essential. Here is a step-by-step approach:
Read the notice carefully
Identify exactly what is being asked for — a return, specific documents, a statement, or a combination. Note the deadline and the notice reference number, DIN (Document Identification Number), and the AO's details.
Compile the requested information
Gather all documents, accounts, or information specifically requested. Ensure documents are organised, labelled, and complete. Do not submit documents that were not requested, and do not withhold documents that were.
Draft a covering letter
Always submit a formal covering letter along with the documents. The letter should acknowledge the notice, list all documents being submitted as an annexure, and confirm compliance. Use the template below as a starting point.
Submit via the Income Tax Portal
Under the faceless assessment regime, responses must be submitted electronically through the Income Tax e-filing portal (incometax.gov.in) under “Pending Actions → e-Proceedings.” Keep a copy of the submission acknowledgement.
Seek professional guidance if needed
If the notice requests complex financial information, covers multiple years, or you are uncertain about what to disclose, consult a Chartered Accountant before responding. An incorrect or incomplete response can trigger further scrutiny.
Reply Template — Section 142(1) Notice
Use this template as a base. Customise the highlighted sections with your specific details before submitting. Always have a CA review the final draft if the notice involves complex transactions.
To,
The Assessing Officer,
[Ward / Circle designation as shown on the notice],
Income Tax Department,
[City, State]
Date: [DD/MM/YYYY]
Subject: Reply to Notice under Section 142(1) of the Income Tax Act, 1961
(Section 268(1) of the Income Tax Act, 2025)
PAN: [Your PAN] | Assessment Year: [AY XXXX-XX]
Notice Reference / DIN: [As shown on the notice]
Sir / Madam,
I / We, [Full Name / Name of Firm / Company], PAN [XXXXXXXXXX], hereby
acknowledge receipt of your notice dated [DD/MM/YYYY] issued under Section
142(1) of the Income Tax Act, 1961, calling upon me / us to [briefly state
what was requested: e.g., "furnish the documents and information specified
therein"].
2. In response to the said notice, I / we submit the following:
[Option A - If filing a return in response to the notice:]
The Income Tax Return for Assessment Year [AY XXXX-XX] is herewith
being filed / has been filed on [date] vide acknowledgement number
[ITR-V acknowledgement number]. A copy of the same is enclosed as
Annexure 1.
[Option B - If producing accounts / documents:]
The documents / accounts / information called for are enclosed herewith
as per the list in Annexure A. Each document is clearly labelled and
corresponds to the serial number in the annexure.
[Option C - If furnishing a statement / explanation:]
The statement / explanation sought vide your notice is provided herewith
as Annexure B. The details are true and correct to the best of my / our
knowledge and belief.
3. The following documents / information are enclosed with this reply:
Annexure 1: [Description of document, e.g., Copy of ITR-V / Bank
Statements for FY XXXX-XX]
Annexure 2: [Description]
Annexure 3: [Description]
[Add further annexures as required]
4. [If seeking additional time for any item:] I / we respectfully submit
that [specific document / information] could not be compiled within the
stipulated time due to [reason]. I / we request an extension of [X] days
to furnish the same and shall do so positively by [date].
5. I / we trust the above reply and the enclosed documents are in order.
Should any further information or clarification be required, please do
not hesitate to contact the undersigned.
Yours faithfully,
[Full Name]
[Designation, if applicable: Proprietor / Partner / Director / Karta]
[Name of Firm / Company, if applicable]
PAN: [XXXXXXXXXX]
Address: [Full address with PIN]
Contact: [Mobile number] | [Email address]
Date: [DD/MM/YYYY]
Place: [City]
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Enclosures:
1. [List of all enclosed documents]
2.
3.