Notice for demand under section 156

Options to respond to Outstanding Demand Notice

There are four options available with a taxpayer to respond against outstanding demand notice. Given below are the options :

• Demand is correct.
• Demand is partially correct.
• Disagree with demand.
• Demand is not correct but agree for adjustment.

Guide on how to respond to outstanding demand

Step 1 : Login into your income tax e-filing portal with your user id and password.

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Step 2 : Select the option of Pending Actions-> Response to Outstanding Tax Demand

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Step 3 : Click on submit response

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Step 4 : After submit, you will be taken to given below screen and the options discussed above will be displayed.

Option 1 : Now if you click on Demand is correct

IF you agrees with the demand then on the Response to Outstanding Amount page, select the Demand is Correct option and the disclaimer Once you submit the response as Demand is correct, then you cannot Disagree with Demand later on as displayed here:-

On the same page, select Not paid yet option and click Pay Now then you will be taken to the e-Pay Tax page where you can make the tax payment . On successful payment, a success message is displayed along with a Transaction ID. Please keep a note of the Transaction ID for future reference.

If demand is already paid, then just Select Yes, Already paid and Challan has CIN. Click Add Challan Details.

To add the challan details, select Type of Payment (minor head), enter Challan Amount, BSR Code, Serial Number and select Date of Payment. Click Attachment to upload the copy of the challan (PDF) and click Save.

NOTE:-
- The maximum size of a single attachment should be 5 MB.
- If you have multiple documents to upload, put them together in a zipped folder and upload the folder. The maximum size of all the attachments in a zipped folder should be 50 MB.

After entering the Challan details, click Submit to submit the response and the details of challan entered.

On successful validation, a success message is displayed along with a Transaction ID. Please keep a note of the Transaction ID for future reference as shown above.

Option 2 : Disagree with demand (Either in partial or in full)

On Response to Outstanding Amount page, select Disagree with the demand (Either in full or in Part) option. Click Add Reasons.

To select the reason(s) for your disagreement, select from the options and click Apply. (You can select one or more options.)

Let’s Understand the reasons which are required to be selected:-

• Demand has already been paid – Here depending upon applicability 3 types of options are present, One should select the relevant option then provide the (If available & applicable) Challan Identification Number (CIN), BSR code, date of payment, the serial number of challan and amount.
• Demand has already been reduced by rectification/revision – Provide the date of order, demand amount after rectification, details of AO etc.
• Demand has already been reduced by appellate order but appeal effect has to be given by the department – Provide the date of order and the appellate order passed by (details of appellate authority, and the reference number of order).
• Appeal has been filed – Here depending upon status one should select that whether Stay petition filed or stay has been granted or instalment granted.
• Rectification/revised return has been filed at CPC – If you select this reason, then please provide additional information related to the revised return filed.
• Rectification has been filed with assessing officer – Mention the date of application and remarks (comments, if any of the taxpayer).
• Others – If there is any other reason apart from mentioned above then select this reason and provide you comment.

After selecting the appropriate reasons for your disagreement, select each reason you listed in Step 2 on the Response to Outstanding Amount page and enter the appropriate details for each reason.

Note: Completed status will be displayed against the reason for which you have submitted the details.

After submission of details for all the reasons selected, click Pay Now to pay the remaining outstanding amount available in the payment summary (if you partially disagree).

Note: You will be taken to the e-Pay Tax page where you can make the tax payment. After payment, you will be taken to the Response to Outstanding Amount page, click Submit to submit your response.

Click Confirm to confirm your submission.

On successful submission, a success message is displayed along with a Transaction ID. Please keep a note of the Transaction ID for future reference.

After Submission, you will get this type of info in response to outstanding demand:-

Time limit to respond to the demand

The assessee shall pay the amount of demand within 30 days from the date of service of notice. However, in some exceptional cases,the time period of thirty days may be reduced by the assessing officer with prior approval of joint commissioner.

An assessee can also make an application to the AO to extend the time for payment or allow payment by instalment, provided the application should be made before expiry of thirty days.

Consequences of delay/ Penalty for delay

• Interest u/s 220(2) – Interest at a rate of one per cent per month or part of the month which is payable after the expiry of 30 days. Such interest shall be payable by the assessee even if the Assessing Officer has approved the application for an extension of time period for the payment or allowed payment in installment.
• Penalty u/s 221 – A penalty may be imposed by the Assessing Officer up to the amount demanded in demand notice, provided a reasonable opportunity of being heard is given to the assessee. If the assessee proves that the default was for good and sufficient reasons, no penalty shall be levied.

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