Income Tax Notice u/s 143(2) for Scrutiny Assessment – How to Respond?

A notice issued under Section 143(2) of the Income Tax Act shows that the tax department wants to verify that you haven’t understated any income, overstated your losses, or paid less tax than you owe.

Before carrying out a detailed scrutiny assessment under Section 143(3), the Assessing Officer must first send you a notice under Section 143(2). This scrutiny is a deeper review of your return and can only happen if you’ve already filed an income tax return.

Below, we’ll look at the common reasons you might receive a 143(2) notice, what it means for you, and the steps you should take to respond effectively.

What Does a Notice Sent u/s 143(2) Mean?

If the Income Tax Department spots any inconsistencies in your filed return—such as under‑reported income or inflated losses—it may issue a Section 143(2) notice for a scrutiny assessment. This notice means the authorities have flagged certain items in your ITR and are asking you to clarify those points. The main aim is to verify the accuracy and authenticity of the deductions and figures you’ve claimed.

 

When is Notice u/s 143(2) Issued?

A Section 143(2) notice is issued by the Income Tax Department whenever your return is picked for a scrutiny or detailed assessment under Section 143(3). In essence, this scrutiny is a deeper review of your filed ITR to verify that:

• You haven’t under‑reported any income
• You haven’t overstated your losses
• You’ve paid the correct amount of tax
• There are no mismatches in reported figures
• Any high‑value transactions are properly explained
• All other aspects of your return are error‑free

Such a notice must be served within three months of the end of the financial year in which you filed your return. For example, if you filed your ITR on 31 July 2024, the relevant financial year (2024–25) ends on 31 March 2025, so the Section 143(2) notice must be issued by 30 June 2025.

 

What is the Time Limit for Issuance of Notice u/s 143(2)?

A Section 143(2) notice for a scrutiny assessment may be issued only within three months of the end of the financial year in which you filed your return. (Before 1 April 2021, this period was six months.)

 

What Should You Know About Notice u/s 143(2)?

• Notices under Section 143(2) are typically sent as a PDF attachment via email.
• You cannot receive a Section 143(2) notice if you haven’t filed your ITR; in that case, the Assessing Officer must first issue a notice under Section 142(1) asking you to file your return.
• Under the Faceless Assessment Scheme, all notices are uploaded directly to the Income Tax e‑filing portal. You’ll also get an email and SMS alerting you to check your account.
• Once you receive a 143(2) notice, you must submit all documents that substantiate your deductions, reliefs, allowances, exemptions, and other claims made in your return.
• You’ll need to provide proof for every source of income you’ve declared.
• The Assessing Officer will then carry out a thorough examination based on the information and documents you’ve provided.

 

So, How Does Notice u/s – 143(2) Work?

Step 1: Within three months of the end of the financial year in which you filed your return, the Assessing Officer issues a Section 143(2) notice to kick off a scrutiny assessment under Section 143(3).

Step 2: You—or your authorized tax representative—must either:

• Appear in person before the AO to present your documents and arguments, or
• Respond online by uploading the required evidence and written submissions through the e‑filing portal.

Step 3: After reviewing all the material you’ve provided, the AO will issue a final assessment order, determining any additional tax payable or refund due, based on the evidence on record.

What is the Final Order u/s 143(3)?

When the Assessing Officer issues you a notice under Section 143(2) of the Income Tax Act to produce evidence on a specified date, they will—after reviewing your documents and hearing your explanations—assess your total income or loss and determine any tax due or refund payable by issuing an order under Section 143(3).

Types of Notices u/s 143(2)

Limited Scrutiny: Also known as Computer-Assisted Scrutiny Selection (CASS), this targets returns flagged by specific parameters, typically for errors or mismatches. The notice will specify the area under review, such as property transactions or foreign tax credits.

Complete Scrutiny: Here, the entire ITR and all supporting documents are examined. These cases are also identified through CASS reports and may include reviews of previous years’ returns.

Manual Scrutiny: Cases are chosen based on criteria set by the Central Board of Direct Taxes (CBDT), which may change from year to year.

 

How will I receive this Notice u/s 143(2)?

You’ll usually get the notice as a PDF via the email address registered with the Income Tax Department. It will also be dispatched to your postal address.

 

If I haven’t filed my return, will I get a notice u/s 143(2)?

If you haven’t filed an income‑tax return, the department cannot issue a Section 143(2) notice or conduct a scrutiny of your records. Instead, your income will be assessed by best judgment under Section 144, and, if applicable, reassessment proceedings under Section 147 may be initiated.

What are the consequences of not complying with the notice issued u/s 143(2)?

Always respond to an Income Tax Department notice—you should never ignore it. If you fail to do so, you could face:

• A penalty under Section 271(1)(b) of up to ₹10,000 (for assessment years beginning on or after April 1, 2017, penalties fall under Section 272A(1)), and even prosecution.
• A best judgment assessment under Section 144.

 

Is a 143(2)-notice triggered by a 142(1) notice?

A Section 142(1) notice is issued first to request your books of account, income statement, and asset‑liability details for a preliminary review. If the Assessing Officer finds these explanations unsatisfactory, they may follow up with a Section 143(2) notice to conduct a full scrutiny of your accounts. In practice, taxpayers often receive both notices together—Section 142(1) for initial information and Section 143(2) for detailed examination.

Have you received a Section 143(2) notice? Remember, a timely and complete response is crucial to avoid further penalties or assessments.