Section 245 Notice — Underreporting of Income and Denial of Relief
Strategic response to Section 245 notices for substantial underreporting of income with penalties.
Section 245 applies when income is underreported by more than 10% and the shortfall exceeds INR 25 lakhs. The notice initiates proceedings that can result in denial of relief under Section 245(1), meaning the income difference is simply added and no reasonable cause is entertained. We challenge Section 245 applicability and mount a reasonable cause defense to preserve relief eligibility.
Section 245 notice strategy
Expert handling of Section 245 underreporting notices with focus on preserving reasonable cause defense.
- Threshold analysis (10% + ₹25L test)
- Reasonable cause documentation
- Mistake of law vs fact arguments
- Onus reversal and defense strategy
- Notice response and hearing preparation
- Relief preservation memo
- Appellate remedy if relief is denied
What this service includes
The core elements of Section 245 Notice work.
Threshold Check
Verify whether the 10% underreporting + INR 25 lakh threshold is met; if not, Section 245 does not apply.
Onus Reversal
Under Section 245, the burden shifts to you to prove reasonable cause. We identify and document all mitigating factors.
Reasonable Cause
Demonstrate that the underreporting was due to mistake of fact (inadvertent) not evasion or negligence.
Relief Memo
Prepare a detailed memo on reasonable cause with timeline, supporting documents and precedent.
Our process
From initial consultation to completion.
Engagement & Scope
Understand your situation and define the scope of work and deliverables.
Analysis & Strategy
Review your existing filings, identify issues and develop a corrective strategy.
Implementation
Execute filings, submissions and required responses with full documentation.
Completion & Support
Deliver final work, support any follow-up and integrate with ongoing compliance.
Why we lead in Section
What sets our approach apart.
Burden matters
Once Section 245 applies, you must prove reasonable cause. Failure means income is added without relief.
Penalty avoidance
Establishing reasonable cause prevents penalties and interest; the cost of failure is substantial.
Timing advantage
Early intervention before final reassessment shows good faith and strengthens reasonable cause argument.
Section 245 Notice questions answered
What people ask before engaging us.
Ready for expert Section support?
Let our team help you navigate this process with clarity and confidence.
