What does a Section 142(1) notice mean?

Inquiry notice before/during assessment requiring: file return (if not filed), produce accounts/documents, or furnish specific information. Not a demand or penalty - it's a request. But non-compliance leads to Rs 10,000 penalty, best judgement assessment (S144), or prosecution (S276D).

How much time to respond?

Time specified in notice - typically 15 days in faceless assessment. Extension possible through e-filing portal with valid reasons. Non-response triggers penalty and potential best judgement assessment. Patron submits well within deadline for Mumbai taxpayers.

What happens if I don't respond?

Three consequences: (1) Rs 10,000 penalty per failure (S271(1)(b)). (2) Best judgement assessment (S144) - AO estimates income from available info (always adverse). (3) Prosecution up to 1 year (S276D) for wilful non-compliance. Patron ensures timely response.

Is 142(1) the same as scrutiny?

No. 142(1) is preliminary inquiry (asking for information). 143(2) is scrutiny (formal assessment). But 142(1) often precedes 143(2). If 142(1) response is satisfactory, case may close without scrutiny. Comprehensive 142(1) response can prevent escalation.

Can AO ask for any document?

Almost, but with limits. Accounts only for last 3 years before previous year. Assets & liabilities statement needs Joint Commissioner approval. Even if taxpayer believes document is irrelevant, compliance mandatory - relevance argument can be raised but doesn't excuse non-production.

How does faceless assessment affect response?

Notice from NeAC, not local AO. Response on e-filing portal under E-Proceedings. Case assigned to AU in any ReAC in India. No face-to-face meeting. Written response must be comprehensive and self-contained. Patron drafts detailed documented responses.

What if I partially comply?

Better than non-compliance but can still attract penalty. Submit what you have with written explanation for unavailable documents (lost, with third parties). Request additional time. Patron manages partial compliance ensuring good faith demonstration.

Can I request personal hearing?

Yes. Even in faceless assessment, taxpayers can request video conference hearing through e-filing portal. Useful for complex cases where written response may not fully convey position. Patron requests and represents at personal hearings for Mumbai taxpayers.

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IT Notice under Section 142(1) in Mumbai: Inquiry Before Assessment, Document Submission, and Response Strategy

Reviewed by CA and CS Team, Patron Accounting LLP ICAI & ICSI Registered| 15+ Years Experience| Last Updated: 24 March 2026 Verify Credentials →

Section 142(1): Inquiry before assessment – AO can require return filing, accounts/documents, or information on specific points

Three Purposes: (i) File return if not filed (ii) Produce accounts and documents (iii) Furnish information, notes, or workings

Faceless: NeAC issues notice | Response via e-filing portal under E-Proceedings | AU in ReAC processes case

Non-Compliance: Rs 10,000 penalty (S271(1)(b)) | Best Judgement Assessment (S144) | Prosecution up to 1 year (S276D)

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IT Notice Section 142(1) in Mumbai – Overview

📌 TL;DR - IT Notice Section 142(1) Services at a Glance

Section 142(1) is a preliminary inquiry notice issued before/during assessment requiring: (i) filing of return (non-filers), (ii) production of accounts/documents, or (iii) furnishing information on specific points. Issued by AO or NeAC under Faceless Assessment. Response via e-filing portal under E-Proceedings (typically 15 days). Not a demand or penalty – it is an information-gathering tool. But non-compliance leads to: Rs 10,000 penalty (Section 271(1)(b)), best judgement assessment (Section 144), or prosecution (Section 276D). A comprehensive response can close the case without escalation to scrutiny.

Mumbai taxpayers receive 142(1) notices across every category: salaried professionals at BKC with AIS mismatches, Powai freelancers who haven't filed ITR, Fort business owners needing expense verification, NRIs with Mumbai property income, and BKC MNC subsidiaries with transfer pricing queries. Learn more about IT Notice Section 142(1) across India.

Patron Accounting's Mumbai office at Marine Lines provides end-to-end 142(1) response: notice analysis, AIS reconciliation, document organisation, comprehensive written response, e-filing portal submission, faceless assessment coordination, and escalation defence. For ITR filing, see Income Tax Return. For other notices, see Income Tax Notice.

Content is reviewed quarterly for accuracy.

What Is IT Notice Under Section 142(1)?

Section 142(1) empowers the Assessing Officer to issue an inquiry notice before or during assessment. Three distinct powers: (i) require non-filers to file return, (ii) require production of accounts and documents, (iii) require information, notes, or workings on specific points. It is a pre-assessment information-gathering tool – the Department is asking questions, not making conclusions.

Under Faceless Assessment (since 2020), most notices are issued by NeAC (not local AO). Response is electronic via e-filing portal. Case assigned to an AU in any ReAC in India – no face-to-face. Written response must be comprehensive and self-contained. For Tax Planning to prevent future notices, see our page.

Answering properly can prevent escalation to scrutiny (Section 143(2)) or best judgement (Section 144). A poor response virtually guarantees adverse assessment. For TDS Return Filing to prevent TDS-related notices, see our page.

Key Terms for IT Notice Section 142(1):

Section 142(1)(i): Require filing of return by non-filers with taxable income
Section 142(1)(ii): Require production of accounts, books, documents for assessment
Section 142(1)(iii): Require information, notes, workings on specific points
Section 144: Best Judgement Assessment – AO estimates income if no response (always adverse)
Faceless Assessment: NeAC issues notice, AU in ReAC assesses, no face-to-face, all electronic
Section 271(1)(b): Penalty Rs 10,000 per failure to comply with 142(1) notice

CA Managed 142(1) Response

When Mumbai Taxpayers Receive Section 142(1) Notices

Non-filing despite taxable income – AIS/SFT captures high-value transactions (property, vehicles, bank deposits, MF investments). No ITR filed = 142(1)(i) notice. Common for Powai freelancers, Andheri gig workers, and property sellers who assume TDS covers tax obligation. Patron files the return and responds.

AIS/Form 26AS mismatch after ITR filing – AIS shows high-value transactions not explained in ITR. AO issues 142(1)(iii) for source/nature clarification. Common for salaried professionals with undeclared investment income. Patron reconciles AIS and prepares explanation.

Scrutiny selection for assessment – CASS system selects ITR based on risk parameters. AO issues 142(1)(ii)/(iii) before proceeding to full scrutiny. Common for high income, large deductions, business losses. Patron prepares complete document set.

Business expense verification at Fort/Dadar – AO requests invoices, payment proofs, bank statements, ledger extracts. Particularly cash expenses, related party transactions. Patron organises and presents business records.

NRIs with Mumbai income – Rental income, capital gains, bank interest. NRIs unaware of filing requirement. 142(1) notices go unnoticed. Patron monitors and responds for NRIs with Mumbai assets.

Startup angel tax / Transfer pricing – Powai startups: share premium (Section 56(2)(viib)) valuation queries. BKC MNC subsidiaries: TP documentation requests. Patron prepares specialised responses. For IT Demand Section 156 if demand arises, see our page.

Section 142(1) Response Services Included

Service	What We Do
Notice Analysis & Categorisation	Which sub-section (i/ii/iii). What specifically asked. Deadline. Likely assessment trajectory. Response strategy within 2 days for Mumbai taxpayers
Return Filing for Non-Filers (142(1)(i))	Income computation, Form 16/26AS/AIS gathering, deduction computation, return filing within specified time. Belated/updated return with Section 234F fee
Document Organisation & Submission (142(1)(ii))	Bank statements, invoices, ledgers, contracts, investment proofs organised, indexed, converted to PDF, uploaded on E-Proceedings portal
Written Response & Explanation (142(1)(iii))	Point-by-point response with calculations, cross-references to ITR schedules, explanatory notes. Comprehensive and self-contained for faceless AU
AIS Reconciliation	Full reconciliation of AIS with bank statements, Form 26AS, ITR schedules, investment records. Discrepancies explained with documentation. Basis of response
Faceless Assessment Coordination	Monitor E-Proceedings daily. Respond to follow-up AU queries within deadline. Track Verification Unit inquiries. Ensure case doesn't escalate to Section 144
Escalation Management	If case escalates to 143(2) scrutiny, 144 best judgement, or 271(1)(b) penalty: file appeals, request personal hearings, represent before relevant authority
Startup & TP Specialisation	Angel tax: DCF valuation defence, investor documentation. Transfer pricing: TP documentation, benchmarking response. Industry-specific expertise for Mumbai cases

Our Process

How to Respond to Section 142(1) Notice in Mumbai

Patron analyses within 2 days, gathers documents within 5 days, drafts and submits within 10 days, and monitors E-Proceedings daily until case closure.

Step 1

Analyse Notice & Gather Documents

Download from e-filing portal. Identify sub-section (i/ii/iii) and specific queries. Gather: bank statements, Form 16/16A, Form 26AS/AIS, investment proofs, business records. Reconcile AIS with ITR – identify discrepancies. Patron analyses within 2 days and gathers documents within 5 days for Mumbai taxpayers.

Notice analysedDocuments gathered

Analysis Done01

Step 2

Prepare & Submit Response

Draft comprehensive written response addressing each query point-by-point. Attach supporting documents in PDF. Cross-reference ITR schedules, Form 26AS, AIS. For 142(1)(i): file the return. Submit on e-filing portal under E-Proceedings. Save acknowledgement. Patron drafts and submits within 10 days for Mumbai taxpayers.

Response draftedSubmitted on portal

Responded02

Step 3

Monitor & Respond to Follow-Ups

Check E-Proceedings daily for AU queries, additional document requests, Verification Unit inquiries. Each follow-up has a deadline. Respond within specified time. Under faceless assessment, multiple query rounds possible. Patron monitors and responds to every follow-up for Mumbai taxpayers.

Follow-ups handledAU satisfied

Monitored03

Step 4

Track Outcome & Manage Escalation

If AU satisfied: case closed without addition. If additions proposed: respond to draft assessment order. If escalated to Section 144 (best judgement): file immediate response. If penalty imposed: prepare defence under Section 271(1)(b). Patron tracks until complete resolution for Mumbai taxpayers.

Case resolvedNo escalation

Resolved04

Documents Commonly Requested Under Section 142(1)

Salaried Individuals: Form 16 (all employers), Form 26AS/AIS, bank statements (all accounts), investment proofs (S80C/80D/80E), capital gains computation, rental income details
Business Owners: P&L, Balance Sheet, audited financials (if applicable), bank statements, purchase/sales registers, cash book, TDS certificates, GST returns, loan documents
Professionals: Income computation, fee receipts/invoices, expense details, Form 16A, bank statements, investment proofs
NRIs: India income sources (rental, interest, capital gains), TDS certificates, DTAA claims, Form 67 (foreign tax credit)
Companies: Audited financials, Form 3CD, transfer pricing documentation, Board resolutions, related party details, depreciation schedule

Mumbai-Specific Tip: Mumbai taxpayers with multiple bank accounts (salary at BKC, savings at hometown, NRE/NRO for NRIs, business at Fort) must submit statements for ALL accounts. The AO cross-verifies with AIS data from multiple banks. Patron ensures complete bank statement submission covering all accounts to prevent follow-up queries.

Common Challenges in Section 142(1) Response in Mumbai

Challenge	Impact	How Patron Accounting Solves It
AIS Data Mismatch (#1 Trigger)	Property purchase, MF redemption, share transactions in AIS not explained in ITR. Purchase may be from savings (not unreported income). MF redemption may be return of capital	Full AIS reconciliation with documented explanations. Each discrepancy addressed individually. Patron prepares explanatory responses for Mumbai taxpayers
Incomplete Response Leading to Section 144	Non-response or incomplete response = best judgement assessment. AO estimates income at higher figure. Almost always adverse. NRIs particularly at risk	Complete responses submitted within deadline. All queries addressed. Follow-ups monitored. No case left incomplete for Mumbai taxpayers
Faceless Assessment Communication Gap	No face-to-face. Multiple query rounds via NeAC. Each has deadline. Missing any deadline = non-compliance. E-Proceedings interface unfamiliar to many	All electronic communications managed. E-Proceedings monitored daily. Every deadline tracked. Mumbai taxpayers fully represented in faceless environment
Overbroad Document Requests	Extremely broad categories (all bank statements 3 years, all investment proofs). High-volume Mumbai businesses = thousands of pages	Documents organised, indexed, systematically uploaded. AU can find what it needs without follow-up queries. Professional presentation
Startup Angel Tax Queries	Share premium valuation (Section 56(2)(viib)). AU may not understand startup economics. DCF valuation must be defensible	Comprehensive angel tax response with DCF valuation defence, investor credentials, business plan justification. Patron prepares for Powai startups

Section 142(1) Response Fees in Mumbai

Fee Component	Amount
Penalty for Non-Compliance	Rs 10,000 per failure (Section 271(1)(b))
Best Judgement Assessment Risk	Potentially lakhs in additional tax + interest (Section 144)
Prosecution Risk	Imprisonment up to 1 year + fine (Section 276D) for wilful non-compliance
Patron Fee – Return Filing (142(1)(i))	Starting Rs 3,000 (file return + respond to notice)
Patron Fee – Document Submission (142(1)(ii))	Starting Rs 5,000 (organise + index + upload + response)
Patron Fee – Information Response (142(1)(iii))	Starting Rs 5,000 (written response + AIS reconciliation + evidence)
Patron Fee – Complex Business Case	Starting Rs 10,000 (full accounts organisation + detailed response + follow-up)
Patron Fee – Angel Tax Defence	Starting Rs 15,000 (DCF valuation defence + investor documentation)
Patron Fee – Transfer Pricing 142(1)	Starting Rs 25,000 (TP documentation + benchmarking + response)
Patron Fee – Escalation Defence	Starting Rs 10,000 (scrutiny representation + assessment defence)

All fees and charges listed are indicative only and do not constitute a binding offer. Final amounts may vary depending on the volume of work and the complexity involved.

Professional service charges for drafting, filing, and representation are separate from the statutory fees. The exact fee depends on the complexity of the case, disputed amount, and number of hearings required. Contact us for a detailed quote.

Get a free IT Notice Section 142(1) consultation - Call +91 945 945 6700 or WhatsApp us. No-obligation assessment.

Section 142(1) vs Other IT Notices

Stage	Estimated Timeline
Inquiry Notice 142(1)	Information gathering before assessment \| Low-Medium severity \| Provide information/documents; file return if required
CPC Intimation 143(1)	Processing result; demand or refund \| Medium \| Agree/disagree; rectification if error
Scrutiny Notice 143(2)	Full assessment of income \| High \| Full representation before AO/AU
Reassessment Notice 148	Income escaped assessment; case reopened \| High \| Challenge validity; represent on merits
Demand Notice 156	Payment of tax/interest/penalty due \| High \| Pay/rectify/appeal/stay
Best Judgement 144	AO estimates income (no taxpayer response to 142(1)) \| Very High \| Appeal immediately; should have responded to 142(1)

Section 142(1) is the entry point in the assessment chain. Responding properly at this stage can prevent escalation to 143(2) scrutiny or 144 best judgement. Many Mumbai taxpayers treat it casually because it's 'just asking for information' – but a poor response directly leads to adverse assessment. Patron treats every 142(1) response as the final representation, because in faceless assessment, it often is.

Key Benefits

Why Choose Patron for Section 142(1) Response in Mumbai

NeAC & Local AO Coordination

Most notices via faceless assessment (NeAC). Some exceptions handled by local Mumbai AOs. Patron coordinates with both electronically and in person depending on case type.

AIS Reconciliation Expertise

AIS is the primary trigger. Patron reconciles bank transactions, MF redemptions, property transactions, share trading, and foreign remittances with ITR. Discrepancies explained with documentation.

Escalation-Preventing Responses

Comprehensive, documented, cross-referenced, professionally presented responses that close the case at 142(1) stage. Save Mumbai taxpayers from months of scrutiny proceedings.

Startup & Business Specialisation

Powai startups (angel tax, ESOP), BKC MNCs (transfer pricing), Fort businesses (expense verification), Andheri professionals (income reconciliation) – specific expertise per category.

Trusted by Mumbai Taxpayers

Trust Signals: 10,000+ Businesses | 4.9 Google Rating | 50,000+ Documents Filed | 15+ Years

“I received a 142(1) notice about Rs 45 lakh in share transactions in my AIS. Patron reconciled my demat statements, showed the net gain was only Rs 80,000 (already declared), and submitted a response that closed the case in 2 months without any addition. A friend who handled his own 142(1) ended up in scrutiny for 18 months.”

— Investment Professional, Nariman Point

Offices in Pune, Mumbai, Delhi, and Gurugram serving taxpayers with IT notice response, assessment defence, and compliance.

Faceless Assessment Flow for Mumbai Taxpayers

Step	Action	Actor	Mumbai Taxpayer's Role
1	Section 142(1) notice issued	NeAC	Receive on e-filing portal; notify Patron
2	Response submitted within deadline	Taxpayer/Patron	Documents + written explanation on portal
3	Case assigned to Assessment Unit	NeAC (automated)	No role; AU may be in any ReAC
4	AU reviews; may request more info	AU via NeAC	Respond to additional queries on portal
5	Verification Unit inquiry (if needed)	VU	Cooperate with verification
6	If satisfied: case closed	AU/NeAC	Check portal for closure
7	If not satisfied: draft assessment shared	AU via NeAC	Submit objections within deadline
8	Final assessment order	AU/NeAC	Appeal if adverse (CIT(A)/ITAT)

Related Services

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Legal & Compliance Framework

Section 142(1)(i): Require filing of return (non-filers)
Section 142(1)(ii): Require production of accounts and documents
Section 142(1)(iii): Require information, notes, workings
Section 142(2A): Special audit direction (with CIT approval)
Section 271(1)(b): Penalty Rs 10,000 for non-compliance
Section 276D: Prosecution – imprisonment up to 1 year + fine
Section 144: Best Judgement Assessment (if no response)
Section 143(2): Scrutiny notice (may follow 142(1))
Faceless Assessment: NeAC → AU (ReAC) → VU → TU → RU
Account Limit: AO can request accounts for last 3 years only
Response: E-filing portal under E-Proceedings; typically 15 days

Filing Portal: incometax.gov.in (e-filing portal)

Frequently Asked Questions – IT Notice Section 142(1) in Mumbai

Get answers about what 142(1) means, response time, non-compliance consequences, scrutiny vs inquiry, document scope, faceless assessment, partial compliance, and personal hearings.

Quick Answers

Section 142(1) ka notice aaya hai – kya kare? E-filing portal pe jaao, E-Proceedings mein notice padho. Kya maanga hai: return file karo (142(1)(i)), documents do (142(1)(ii)), ya information likho (142(1)(iii)). 15 din mein respond karo. AIS data match karo ITR se. Patron 2 din mein analyse karke 10 din mein response file karta hai.

Respond nahi kiya toh kya hoga? Rs 10,000 penalty (Section 271(1)(b)). Section 144 mein AO khud income estimate karega – hamesha zyada hogi. Prosecution bhi ho sakta hai (1 saal jail). Patron ensure karta hai timely complete response.

Yeh scrutiny notice hai kya? Nahi. 142(1) preliminary inquiry hai – information maang raha hai. 143(2) scrutiny hai – full assessment. Lekin agar 142(1) ka response achha ho toh scrutiny tak jaane ki zarurat nahi. Patron aise response draft karta hai jo case close karwa de.

Don't Let a 142(1) Inquiry Become a 144 Best Judgement – Respond Now

Section 142(1) is the Department's first question. A comprehensive response can close the case without any addition. But non-response or a poor response leads directly to Section 144 best judgement assessment – where the AO estimates your income without your input (always adverse). The 15-day deadline is firm. Under faceless assessment, the case moves fast.

Get your 142(1) response prepared today – Call +91 945 945 6700 or WhatsApp us.

Get End-to-End Section 142(1) Response in Mumbai

IT notice under Section 142(1) in Mumbai is the Department's preliminary inquiry tool – whether triggered by AIS mismatches, non-filing detection, business expense verification, angel tax queries, or transfer pricing documentation. A comprehensive, documented, timely response at this stage can close the case without escalation.

Patron Accounting's Mumbai office provides end-to-end services: notice analysis, AIS reconciliation, document organisation, comprehensive written response, e-filing portal submission, faceless assessment coordination with NeAC and AU, follow-up query management, and escalation defence.

With offices in Pune, Mumbai, Delhi, and Gurugram, 10,000+ businesses served, and 4.9 Google rating, Patron Accounting LLP delivers expert IT notice resolution across India.

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IT Notice 142(1) Response Across India

Patron Accounting handles Section 142(1) notice responses in major cities with AIS reconciliation, faceless assessment coordination, and escalation defence.

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Content Created: 24 March 2026 | Last Updated: 24 March 2026 | Next Review: 24 June 2026 | Reviewed By: CA & CS Team, Patron Accounting LLP

This content is reviewed quarterly for accuracy of IT Act provisions, Faceless Assessment Scheme updates, and e-filing portal changes. Freshness Tier: 1.

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