Taxpayers are increasingly getting system-generated intimations under Section 143(1)(a) for discrepancies in returns filed and annual information statement (AIS) or Form 26AS. They must respond by submitting clarifications or file a revised return by December 31.
Non-response to income tax intimations can lead to disallowing of claimed credits or deductions. It may also trigger penalty proceedings for concealment or non-compliance, including fees and interest of Sections 234B and 234C on such outstanding tax dues.
Sandeep Sehgal, partner, Tax, AKM Global, a tax and consulting firm, says the rise in system-generated intimations under Section 143(1)(a) is due to the automated mismatch detection process employed by the income tax department’s Central Processing Centre. “Such notices alert taxpayers and identify the discrepancies as part of enhanced compliance and data validation efforts,” he says.
Reporting error
Taxpayers should reconcile the TDS credits reported in Form 16/16A with those reflected in Form 26AS and the AIS. They can respond via the tax portal and provide appropriate feedback — information is correct, information is not fully correct, information relates to other PAN/year, and information is denied.
If the intimation is due to a reporting error by a bank or deductor, the taxpayer should first register feedback on the AIS portal identifying the mismatch. Once this is done, the income tax department will flag the transaction to the reporting entity for confirmation or correction.
Form 16 and Form 26AS are generated through the TRACES system, drawing from the same underlying TDS data. As a result, differences are unlikely. If a mismatch appears in the AIS, taxpayers can address it by submitting feedback directly on the AIS portal, enabling the department to flag the issue with the reporting entity for correction.
The taxpayer should contact the reporting entity directly and request a revision of the TDS return or statement they have filed. “This parallel follow-up often speeds up the correction process and helps ensure that the updated information flows seamlessly into Form 26AS and the AIS,” says Neeraj Agarwala, partner, Nangia & Company.
Unpaid dues
If the taxpayer does not respond to the intimation, it will be treated as acceptance of the figures computed by the department. If this results in a tax demand, a separate demand notice will follow, and interest on the outstanding amount will continue to accumulate until payment is made.
Unpaid dues may be adjusted against refunds in subsequent years. In cases involving significant amounts, the income tax department may initiate recovery proceedings to secure the balance.
File revised returns
If the taxpayer identifies any errors or omissions in the original return,whether in reporting income, claiming deductions, or selecting the correct regime, he may file a voluntary revised return under Section 139(5). For AY 2024-25, the deadline is December 31, 2025.