Understanding Income Tax Notice 142(1)

Section 142(1) empowers the Assessing Officer (AO) to serve a notice on any person, whether or not they have filed a return under Section 139, to begin an inquiry before making an assessment.Under this notice, the AO may ask the taxpayer to: (a) furnish a return of income; (b) produce accounts or documents; or (c) provide information (including assets & liabilities) as required.

In simple language: a 142(1) notice is a “call for details/information/clarification” from the tax department, before finalizing your assessment.

Table of Contents

When is a 142(1) Notice Issued?

An AO may issue such a notice under several scenarios:

The taxpayer has not filed an income tax return within the due date under Section 139(1).
The taxpayer has filed a return, but the AO needs additional information/documents or has doubts about certain claims made — for example, when certain transactions or deductions seem inconsistent with available data.
The AO might also require statements of assets and liabilities, or explanations about particular transactions, to ensure completeness and correctness.

Note: Receiving a 142(1) notice does not necessarily mean you have done anything wrong. Often, it’s part of standard procedure to clarify and verify information.

What Can the AO Ask for Under the Notice?

When the AO issues a 142(1) notice, they may request one or more of the following:

Request Type	Description
Filing of Return	If you haven’t filed under Section 139, AO may ask you to file your ITR for the relevant year.
Accounts/Books/Documents	AO may ask you to produce books of accounts, bank statements, audit reports, financial statements, etc.
Information / Statements	This may include a verified written statement, explanation of transactions, or even a statement of assets and liabilities.

However, there is a safeguard: the AO cannot demand records relating to a period earlier than 3 years before the previous year.

What Happens if You Ignore the Notice? — Consequences

Ignoring or failing to respond properly to a 142(1) notice can lead to serious consequences:

The AO may proceed with a “best judgment assessment” under Section 144, based on the information available, which could result in a higher tax liability.
A penalty under Section 271(1)(b) — commonly ₹10,000 — may be imposed for each failure to comply.
In grave cases, prosecution under Section 276D may be initiated, which may lead to imprisonment (up to 1 year) and/or fine.

Therefore, compliance is mandatory, even if you believe the requested documents are irrelevant.

How to Respond to a 142(1) Notice — Step by Step

Thanks to the modernisation of the tax system, responding to a 142(1) notice is fairly straightforward. The process is typically electronic, via the online portal.

Log in to your registered account on the official portal (the one used for e-filing).
Navigate to “Pending Actions” → “e-Proceedings” → “View Notices”.
Check the notice, figure out what’s being asked (return, documents, statements, explanation).
Prepare your response — this can be full or partial:
- Full Response: Provide all required documents and declarations at once.
- Partial Response: If you don’t have everything ready, submit what you can within the deadline — this shows compliance and gives you time to gather the remaining documents.
Upload attachments (PDF, Excel, CSV, etc.) as required, fill in the required data, and submit.
Download the acknowledgement/confirmation after successful submission.

After your response, the AO (or the relevant unit under the faceless assessment scheme) reviews the information. If satisfied, the return stands; else, further notices or assessments (under Section 143, 144, etc.) may follow.

Context: 142(1) in Today’s Assessment Regime

With the implementation of the Faceless Assessment Scheme, 2019 (under the authority of Central Board of Direct Taxes, CBDT), notice under Section 142(1) is often served by the central e-assessment platform (National e-Assessment Centre or NeAC), instead of a physical AO calling you to an office.

In the faceless regime:

The notice comes to your e-filing account.
You reply electronically (e-Proceedings).
Documents, if required, can be uploaded online (PDF/Excel/CSV).

Because of this, responding promptly and correctly becomes even more critical, as physical visits are no longer required.

Common Triggers: Why Taxpayers Receive 142(1) Notices

Some common scenarios or triggers when a 142(1) notice may be issued:

Tax return was not filed on time (or at all).
Large or unexplained transactions — property sale, high-value investments, capital gains, unusual cash flows, etc. (this may prompt AO to verify documentation)
Claims of deductions, exemptions, losses, depreciation, or set-offs that don’t match data available with tax department (TDS, Form 26AS, third-party data, etc.).
Corporate/business taxpayers with books of accounts, GST returns, or multiple sources of income — higher likelihood of scrutiny.
“Dummy” or incomplete ITR: e.g. filed but without supporting proofs, or with self-computed estimates — AO may call for documents to verify income, expenses, assets, liabilities.

What Should You Do When You Receive a 142(1) Notice

Don’t panic. A 142(1) notice is often procedural, not necessarily a suspicion of wrongdoing.

Act promptly. Check deadlines in the notice immediately — many times you have 15–30 days to respond.

Gather documents carefully. Bank statements, Form 26AS, receipts for deductions, proof of investments, proof of capital gains, asset-liability statements, etc.

If you can’t complete everything, send a partial response — state that you’re arranging further documents and will submit them soon. This demonstrates compliance and avoids penalties.

Keep evidence. Save acknowledgement of response, keep track of what was submitted.

Seek professional help. If your case involves complex business books, multiple sources, capital gains, depreciation, overseas income, etc., consider hiring a CA or tax expert.

Myths vs Reality: Clearing Misconceptions

Claim / Belief	Reality
“142(1) notice means I have done something wrong.”	“If I ignore it, I’ll automatically be prosecuted.”
Not always — prosecution has its own thresholds, but AO can issue a best-judgment assessment or penalty.	Wrong — even filers can receive a 142(1) notice if AO needs more info or feels the return is incomplete.
“If I filed ITR, I won’t get a notice.”	“I need to visit the IT office if I get a notice.”
“I need to visit IT office if I get a notice.”	Not anymore under faceless assessment — response is electronic via e-Proceedings.

Frequently Asked Questions (FAQ)

Q1. Is a 142(1) notice always a sign of suspected tax evasion?
A: No. Often, it is just a routine inquiry or request for clarification. It does not automatically imply wrongdoing.

Q2. Can the AO ask for documents older than 3 years?
A: No — by law, under Section 142(1)(ii), the AO cannot demand accounts or documents relating to a period earlier than three years before the previous year.

Q3. What if I missed the deadline mentioned in the notice?
A: Best to send a “partial response” as soon as possible — this shows you attempted compliance. If still ignored, AO may proceed under best-judgment assessment and impose penalties.

Q4. Do I need to visit an AO office to respond?
A: No — under the current faceless assessment scheme, responses are submitted electronically through “e-Proceedings”.

Q5. What if I don’t have all the documents to submit immediately?
A: Submit whatever you have as a partial response, explain that you are collecting the rest; this is better than not responding at all. You can submit additional documents later when they are ready.

Q6. Should I hire a CA if I receive such a notice?
A: If your financial affairs are simple (salary income, standard deductions, basic investments), you may handle them yourself. But if you have business income, capital gains, multiple sources, complex deductions — a CA or tax professional’s help can save you from mistakes.