InvestorQ : when demand for additional tax raised by the income tax department is accepted by the company
prakash Singh made post

when demand for additional tax raised by the income tax department is accepted by the company

Suresh Patil answered.
5 months ago
Here, I assume you are asking about the ways to reply to an additional income tax notice from the IT department. While processing your ITR, if the tax department assesses that more tax is due from you than paid and declared in your return, then you would normally get a demand notice. The intimation will be sent to you regarding the same via email and SMS under section 143(1). You will find the tax demand notice on your online account on the e-filing website. According to the current income tax laws, the time limit to respond to this is 30 days. If you do not respond to the notice within the stipulated time period, the department can take action against you. If as per the intimation u/s 143(1) there is a tax demand then this intimation becomes notice of demand and this intimation will be treated as Notice of demand u/s 156. Accordingly, you will have to pay the entire amount within the time mentioned in the notice.

There are several options you have to respond to the demand notice. They are as follows-

Option 1 – Demand is correct
Step 1: When you select this option, a pop-up screen appears with a message ‘If you confirm, demand is correct then you can’t disagree with the demand’.
Step 2: Click on the ‘Submit’ button.
Step 3: A success message will be displayed.
Step 4: If a refund is due, the outstanding amount and the interest will be adjusted against the refund due. Otherwise, you must pay the demand immediately. 

Option 2 – Demand is partially correct
Step 1: You will see two fields to enter a correct and incorrect amount.
Step 2: Once you enter the amount in the fields, you must choose a reason for stating the department’s calculation to be partially correct.

Demand has already been paid: Provide the Challan Identification Number (CIN). Also mention BSR code, date of payment, the serial number of challan, and amount. You can also add your comments under ‘remarks.’ If CIN is not available, mention that demand has been paid by challan and CIN is not available. Also, mention the date of payment, amount, and remarks (your comments), if any.

Demand has already been reduced by rectification/revision – Provide the date of order, demand amount, details of jurisdictional ITO who has rectified. Next, upload the rectification/appeal effect order passed by the ITO.

Demand has already been reduced by appellate order but appeal effect has to be given by the department – Provide the date of order and the appellate order passed by (details of the appellate authority, and the reference number of order).

An appeal has been filed and stay petition has been filed, or stay has been granted by, or installment has been granted by – Provide the date of filing of the appeal, appeal pending with appellate authority e.g., CIT(A) or ITAT, stay petition filed with details of the office. If the stay has been granted, you must also upload a copy of the stay order.

Rectification/revised return has been filed at CPC – In addition, please furnish the following details-

  • Filing type
  • E-filed acknowledgment number
  • Remarks (comments, if any of the taxpayer)
  • Upload challan copy
  • Upload TDS certificate
  • Upload letter requesting rectification copy
  • Upload indemnity bond

Option 3 – Disagree with the Demand

Step 1: Upon choosing this option, you must provide details of why you disagree with the department’s call.
Step 2: You must also provide reasons for your disagreement from the available options.
Step 3: Submit your response to viewing a success screen with a transaction ID.
Step 4: You can revisit the response when you click on ‘View’ under the ‘Response’ tab.
Step 5: You can view the serial number, transaction ID, date of response, and response type will be displayed.