Notice under section 142(1) is one of the most common notices issued during income-tax assessment proceedings. It seeks information, documents, or explanations from the taxpayer to enable the Assessing Officer (AO) to complete the assessment. While the notice itself is procedural and lawful, the manner in which a taxpayer responds often determines whether the assessment remains routine or turns contentious.
Many additions, penalties, and prolonged litigations do not arise because of adverse facts, but because of improper, excessive, or careless replies to a 142(1) notice. Understanding how to respond correctly is therefore crucial.
What the Law Says about Section 142(1)
Section 142(1) empowers the Assessing Officer to call for:
- Books of account
- Statements or records
- Explanations on specific issues
- Information relevant to the assessment
The purpose of this provision is to enable fact-finding so that the assessment can be completed correctly. However, the power under section 142(1) is not unlimited. It must be exercised within the framework of the Income-tax Act and principles of natural justice.
A 142(1) notice must be:
- Relevant to the assessment proceedings
- Confined to the assessment year in question
- Issued by the jurisdictional Assessing Officer
- Specific and not vague or exploratory
What a 142(1) Notice Can and Cannot Ask For
While section 142(1) gives wide powers, it does not permit fishing or roving enquiries.
A 142(1) Notice Can:
- Seek documents already referred to in the return
- Call for books or statements relevant to disclosed income
- Ask for explanations on specific discrepancies
- Require reconciliations or confirmations
A 142(1) Notice Cannot:
- Seek information unrelated to the assessment year
- Demand irrelevant personal or third-party data
- Conduct open-ended enquiries without linkage to income
- Be used to bypass statutory safeguards under other provisions
If a query is excessive or irrelevant, it can be politely objected to, instead of blindly complied with.
Step-by-Step: How to Respond Safely to a 142(1) Notice
A disciplined, structured approach is essential.
Step 1: Read Each Query Separately
Do not treat the notice as a single block. Break it down query-wise and understand what is actually being asked.
Step 2: Answer Only What Is Asked
This is the most important rule.
Do not volunteer information, explanations, or facts that are not specifically called for.
Precision is safer than over-explanation.
Step 3: Attach Supporting Documents with Explanation
Every factual assertion should be supported by:
- Relevant documents
- Clear, brief explanatory notes
Uploading documents without explanation often leads to misinterpretation.
Step 4: Avoid Assumptions or Legal Admissions
Do not:
- Admit discrepancies casually
- Use vague language like “it appears” or “possibly”
- Make statements that can be read as acceptance of additions
Once something is placed on record, retraction later is difficult.
Step 5: Submit Within Time
Always adhere to the timeline mentioned in the notice.
If more time is required, seek extension in writing, with reasons.
Non-response or delayed response can be used adversely.
What Not to Do While Replying to a 142(1) Notice
Many taxpayers unintentionally create problems by:
- Giving excess information beyond the query
- Uploading raw data without context
- Making legal admissions unknowingly
- Providing inconsistent replies across multiple notices
- Ignoring unreasonable queries instead of objecting politely
Remember: More information does not mean better compliance.
Documents to Keep Ready Before Responding
Before replying, keep the following organised:
- Books of account or statements specifically asked for
- Supporting vouchers and confirmations
- Reconciliation statements (bank, TDS, turnover, etc.)
- Clarificatory notes explaining figures and movements
- Copies of past filings to ensure consistency
Preparation reduces errors and anxiety.
Common Mistakes Taxpayers Make While Replying
Some recurring mistakes include:
- Casual explanations without documentary backing
- Contradictory replies in different submissions
- Missing deadlines due to underestimating seriousness
- Uploading incomplete or unverified documents
These mistakes often result in avoidable additions.
Can a Defective or Excessive 142(1) Notice Be Challenged?
Yes. A notice under section 142(1) can be challenged if it:
- Is issued without jurisdiction
- Seeks information wholly irrelevant to assessment
- Is used oppressively or mechanically
- Attempts to conduct fishing enquiries
However, strategic response is often more effective than immediate litigation. Courts generally expect taxpayers to cooperate first and raise objections in a measured manner.
Practical Takeaway
A 142(1) notice is not dangerous by itself.
The real risk lies in how you respond.
A carefully drafted, legally aligned reply can prevent:
- Unnecessary additions
- Penalty proceedings
- Prolonged scrutiny
- Avoidable litigation
Respond calmly, precisely, and with purpose. In tax proceedings, measured compliance is far more powerful than over-disclosure.
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