Received a notice under Section 142(1) of the Income-tax Act – asking you to file a return, produce accounts and documents, or furnish information? It is an inquiry before assessment, and full, timely compliance is the whole game: non-compliance invites best-judgment assessment under Section 144, a penalty of Rs 10,000 for each default under Section 272A(1)(d), and in wilful cases even prosecution. This guide explains the three types of 142(1) notices, your rights and limits, the e-Proceedings steps – and drafts a clean point-wise response letter from your inputs.
The three kinds of 142(1) notices
| Limb | What it asks | Notes and limits |
|---|---|---|
| 142(1)(i) | File a return that was not filed | Can issue any time after the due date – even after the assessment year ends; for non-filers this is the gateway to assessment |
| 142(1)(ii) | Produce accounts or documents | Cannot demand accounts for a period more than 3 years before the previous year |
| 142(1)(iii) | Furnish information in writing, including a statement of assets and liabilities | A statement of assets and liabilities NOT in the books needs prior approval of the Joint Commissioner |
What non-compliance costs
- Best-judgment assessment (Section 144): the officer assesses on available material – almost always worse than your actual position.
- Penalty (Section 272A(1)(d)): Rs 10,000 for each failure – repeated defaults stack, though a reasonable cause defence exists under Section 273B.
- Prosecution (Section 276D): wilful failure to produce accounts/documents can bring rigorous imprisonment up to one year with fine – rare, but real for persistent defiance.
1Draft your point-wise response
2Queries raised and your responses
Frequently asked questions
Can a 142(1) notice come even after I filed my return?
Yes – limbs (ii) and (iii) are used to call documents and information during scrutiny or standalone. Only limb (i), calling for a return, presupposes a return was not filed.
How far back can the officer ask for my books?
Accounts can be called only for up to three years before the relevant previous year – a demand beyond that is outside the section and worth pointing out respectfully in the response.
What if I genuinely cannot compile everything by the due date?
File a partial response with what is ready and seek adjournment through the portal for the rest, stating the reason. A recorded, reasonable request protects you from the Rs 10,000-per-default penalty via Section 273B.
Is a hearing available in faceless assessment?
Yes – under Section 144B you can request a personal hearing through video conference, and where an adverse variation is proposed, the request is to be granted.