How to Respond to an Income Tax Notice After the ITR Deadline

A registered user can log in to the e-filing portal using a user ID and password. On the dashboard, click Pending Actions and then e-Proceedings. On that page, choose the notice and click it. The taxpayer can either agree or disagree. If agreeing, upload the JSON file of the ITR generated by the offline utility. If disagreeing, select the reason and submit. After submission, a success message with a transaction ID appears. A confirmation email is also sent to the registered email address.

Taking income tax notices lightly can lead to consequences, according to a Cleartax report. Failure to respond can result in a penalty of ₹10,000 under Section 272A for each failure. In some cases, the assessing officer can proceed with a best judgment assessment under Section 144 based on available information. That can lead to a higher taxable income being assumed, which increases tax and penalties. If the taxpayer wants to dispute the higher demand, a minimum of 20% of the tax due must be paid before filing an appeal. In serious cases of non-compliance or deliberate misreporting, the matter may escalate to prosecution, which could lead to imprisonment.

The best course is to comply with the norms and send a response even if the taxpayer disagrees with the notice.