₹21,300 left every month
TaxSavvy for penalty notice
Penalty show cause? Most can be argued down.
We build your reasonable cause defence and file the reply before the date.
If you wait: Penalty is 50% to 200% of the tax on that income (Sec 439, old 270A)
How we get it done
Four steps, the same for every job. You see each one ticked.
Information
PAN. Notice, all pages, with DIN
Discussion
Under-reporting or misreporting charged?. Was the income disclosed somewhere?
Forms
Reply to penalty show-cause. Immunity application if chosen
Deliverables
Reply acknowledgement. Note on appeal options
See what you get, free
Real formats, made with dummy data.
Sample Sample ₹36,280 less tax in the new regime
Sample Net worth ₹14.9 lakh
Questions, answered the CA way
Facts, Provisions and law, Analysis, Conclusion.
Section 270(1) (old 143(1)): Intimation and Demand
- Facts
- The most common IT notice, sent automatically by the CPC computer. Not a scrutiny notice. Not a raid. But if ignored or mishandled, the demand amount gets locked and interest begins. Most Sec 270(1), Income-tax Act 2025 (old Sec 143(1)) demands can be reduced to zero.
- Provisions and law
- Sec 270(1) (old 143(1)); Sec 270(2) (old 143(1)(a)); Sec 289 (old 156); Sec 154; Sec 263(5) (old 139(5))
- Analysis
- What triggers Sec 270(1) (old Sec 143(1)) demand: (1) AIS shows income not declared in ITR, most common. (2) TDS in Form 168 (old Form 26AS) not matching claimed TDS in ITR. (3) Deduction claimed exceeds limit. (4) Arithmetical mistake in ITR. (5) Carried-forward loss claimed without filing return in loss year. Three possible Sec 270(1) (old Sec 143(1)) outcomes: (A) Refund, CPC agrees with your return, issues refund. (B) No demand, no refund, CPC processing matches your return. (C) Demand, CPC finds discrepancy, raises a demand. Do NOT just pay the demand: Sec 270(1) (old Sec 143(1)) demands are often incorrect. In the most common case, FD interest in AIS that taxpayer forgot to declare, the demand is valid but the penalty is avoidable. In the second most common case, TDS credit mismatch due to PAN error by employer, demand is incorrect and should be rectified. Response options: (A) Agree, pay demand.
- Conclusion
- Download Sec 270(1) (old Sec 143(1)) intimation PDF from IT portal, check exact demand amount and reason
- Compare CPC's income computation vs your filed ITR line by line
- Check AIS, identify which item CPC flagged as not declared
- Check Form 168 (old Form 26AS) TDS credits vs TDS you claimed in ITR, any mismatch?
Section 156 (now 289), Demand notice: pay or dispute within 30 days
- Facts
- 156 is a demand notice, the IT department has assessed that you owe a specific amount of tax, interest, and/or penalty. This comes after a 143(3) (now Sec 270(10)) or 147 assessment order.
- Provisions and law
- IT Act 1961, Sec 156 (now 289) | Sec 220 (interest on demand) | Sec 221 (penalty for non-payment)
- Analysis
- You have two options within 30 days: (1) Pay the demand, if you agree it's correct. Pay on IT portal under "e-Pay Tax." Get a challan receipt. (2) File an appeal (CIT(A)), if you dispute the demand. On filing CIT(A), you can request a stay of demand (usually 20-25% of demand must be paid as a pre-condition for stay). If you miss 30 days: 1% per month interest under Sec 220(2) starts running. If you still don't pay, Sec 221 penalty can be levied up to the amount of the demand.
- Conclusion
- Demand ≤₹1L and you agree: Pay immediately. Done.
- Demand is clearly wrong (AIS mismatch): File 154 rectification. Request demand stay pending rectification.
- Demand is from assessment order you dispute: File CIT(A) within 30 days. Pay 20% and request stay on balance.
- Cannot pay and appeal pending: Apply for installment plan under Sec 220(3), AO can grant. Rare but available.
Section 270(8) (old 143(2)): Scrutiny Notice
- Facts
- This is NOT automated, a human officer has selected your return for detailed examination. Specific income, deduction, or transaction is under review. Must be responded to with documentary evidence within the timeline given.
- Provisions and law
- Sec 270(8) (old 143(2)); Sec 270(10) (old 143(3)); Sec 144; Faceless Assessment Scheme 2020; Sec 271(1)(c)
- Analysis
- Why your return was selected: (1) Large refund claim, officer verifies legitimacy. (2) High deductions claimed relative to income (e.g. Sec 123, Income-tax Act 2025 (old Sec 80C) of ₹1.5L on ₹3L income). (3) AIS shows transactions not declared (property purchase, large FD). (4) Specific issue risk profiling by IT department. (5) Information from third party (bank, registrar). Faceless assessment, how it works: Notice arrives on IT portal (also email). You respond online through IT portal → e-Proceedings → Response. Upload documents in PDF. No personal appearance. Officer is anonymous, from a different city. National Faceless Assessment Centre (NFAC) coordinates. What to submit: Depends on the specific query in the notice. Common documents: Bank statements, salary slips + Form 130 (old Form 16), investment proofs (ELSS receipts, PPF passbook), home loan certificate, rent receipts, capital gains statement, property registration documents.
- Conclusion
- Login to IT portal → e-Proceedings → View notices (Sec 270(8) (old Sec 143(2)) notice visible)
- Read notice carefully, identify exactly which item / transaction is under scrutiny
- Note response deadline from notice, calendar the date immediately
- Gather all documents related to the queried item (not your entire file)
Sec 270A (now 439) penalty: how to contest under-reporting vs misreporting
- Facts
- Sec 270A (now Sec 439, Income-tax Act 2025) replaced 271(1)(c) from AY 2017-18 onwards. Two levels:
- Provisions and law
- IT Act 1961, Sec 270A, 270AA (now 439, 440) | Finance Act 2016
- Analysis
- Under-reporting (50% penalty): Income assessed > income returned. Penalty = 50% of tax on the difference. This applies even if the addition was genuine, a ₹5L omission causes ₹7,500+ penalty at 30% slab × 50%. Misreporting (200% penalty): Specific categories, false claim, suppression of evidence, entry in books without corresponding income. Much harder for AO to prove. Most AOs try to frame under-reporting as misreporting, contest this vigorously. Sec 270AA (now Sec 440) immunity: If you pay the assessed tax and interest within 30 days of assessment order, you can apply for immunity from penalty under Sec 270A (now Sec 439). Immunity is granted if: no appeal is pending, you've paid in full, and the addition was not based on misreporting.
Penalty show cause? Most can be argued down.
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