26 May 2016
Notice under Section 142(1) is usually served to call upon documents and details from the tax payers, and to take a particular case under assessment.
The basic purpose is to inquire the details of the assessee before making assessment under the Act. It can be related to ‘Preliminary Investigation’ before starting the assessment.
By serving a notice u/s 142(1) the assessing officer, may call upon the assessee:-
1. To furnish a return of income in respect of which he is assessable, where he has not filed his return of income within the normal time allowed.
– It may include return in respect of his own income or income of other person for which he is liable to be assessable. Example- In case of legal guardian/ deceased person.
2. To produce accounts or documents which the AO may require for the purpose of making an assessment.
3. To furnish in writing any information on matters including statement of the assessee. For Example- statement of assets and liabilities of the assessee on a particular date.
The AO may or may not start assessment after compliance with this notice, dependent upon the facts of assessee. If AO is satisfied with the produced documents or return, he may not start with the assessment process.
Compliance with this notice u/s 142(1) is mandatory even if the tax payer is of the opinion that the accounts/documents requested are irrelevant.
If assessee do not comply with the provisions of this section:
– It may result in Best Judgement Assessment u/s 144, or
– Penalised under Sec 271(1)(b) i.e. Rs10,000 for each failure, or
– Prosecution under Sec 276D which may extend upto 1 year with or without fine.
Abhishek Ranjan Singh ARS Solutions www.arssolutions.co.in +919022838615
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