Section 156 Demand Notice – Tax Demand, Response & Consequences
A Demand Notice under Section 156 of the Income Tax Act is issued when the Income Tax Department determines that tax, interest, penalty, fee, or any other sum is payable by the taxpayer. This notice specifies the amount payable and the due date for payment.
A Section 156 notice is legally enforceable. Ignoring it can lead to recovery proceedings, attachment of bank accounts, and additional penalties.
At N D Savla & Associates, we help taxpayers review demand notices, respond correctly, and take appropriate action—whether it is payment, rectification, or appeal.
What Is a Section 156 Demand Notice?
Section 156 authorises the department to issue a demand notice after:
Processing of return under Section 143(1)
Completion of assessment, reassessment, or best judgment assessment
Passing of penalty or interest orders
The notice formally communicates the tax demand and starts the recovery timeline.
Common Reasons for Section 156 Demands
Demand notices are commonly raised due to:
Adjustments made under Section 143(1)(a)
Scrutiny or reassessment orders
Disallowance of deductions or losses
Interest or late fee computation
Mismatch of TDS or advance tax credits
Penalty proceedings
Not all demands are correct. Many arise due to system errors or data mismatches.
How to Respond to a Section 156 Demand Notice?
Verify the Demand
We cross-check the demand with:
Assessment order
Form 26AS and AIS
Challans and tax payment records
Decide the Correct Course of Action
Based on facts, the demand may be:
Paid in full
Partially accepted
Disputed through rectification or appeal
Online Response on Income Tax Portal
We submit acceptance or dispute of demand with proper documentation.
Rectification or Appeal Support
If the demand is incorrect, we assist with rectification under Section 154 or appeal before CIT(A).
Time Limit for Payment
Unless otherwise specified, the demand must be paid within 30 days from the date of service of the notice.
Failure to pay within time may trigger recovery action.
Penalties & Consequences of Non-Payment
Ignoring a Section 156 notice may result in:
Interest on outstanding demand
Penalty proceedings
Recovery under Section 222
Attachment of bank accounts or assets
Adjustment of future refunds
Early action can prevent coercive recovery measures.
Our Section 156 Demand Notice Services
Demand verification and advisory
Online response filing
Rectification and appeal handling
Stay of demand applications
Recovery prevention support
Refund adjustment management
Who We Assist?
We assist:
Salaried individuals and pensioners
Businesses and professionals
Companies and startups
NRIs with Indian tax demands
Taxpayers facing high-value or legacy demands
Why Choose N D Savla & Associates?
Strong experience in demand and recovery matters
Practical, solution-focused approach
Clear advice on risks and options
Timely execution
Trusted CA firm serving clients across Mumbai and India
We help you deal with the demand before it escalates.
Don’t Ignore a Demand Notice.
A Section 156 notice starts the recovery clock. Whether the demand is correct or not, it must be addressed.
If you’ve received a Section 156 Demand Notice, get professional help before taking action.
Speak to our tax compliance team today.
