How to Respond to Notice Under Section 143(2)?

Getting a scrutiny notice under section 143(2) means the Income Tax Department has selected your IT return for a detailed investigation. This notice is issued when the assessing officer wants further clarification or supporting documents regarding the return filed.

However, the notice does not directly mean you have avoided taxes; it simply means that the department wants some explanation and clarification regarding what you have filed.

In simpler terms, the notice under Section 143(2) is a scrutiny assessment notice. This means the income tax department has identified certain areas in your ITR that require further verification or clarification.

In this blog, we will understand the basics of the notice and how to respond to it when received.

What Does a Notice Under Section 143(2) Mean?

A notice under section 143(2) means a scrutiny notice. This is issued when the tax department selects your ITR for detailed verification, often due to inconsistencies, mismatches, or specific risk parameters.

However, before issuing a scrutiny notice under section 143(2), the IT department sends an intimation under section 142(1). If the response to that intimation is not sent, or is not satisfactory, then the assessing officer issues the final notice under section 143(2).

The inconsistencies and discrepancies found in one's ITR can stem from any of the following: over-reporting losses, under-reporting income, or claiming deductions to which you are not eligible.

Keep in mind that receiving a scrutiny notice does not necessarily mean you are guilty; it is issued mainly to ensure correct tax reporting and compliance.

Why a Notice Under Section 143(2) is Issued

As mentioned, Income Tax Notice under Section 143(2) of the Income Tax Act 1961 is issued when the assessing officer identifies a mismatch or discrepancy in your ITR. The following are some situations in which the notice can be issued.

• A major inconsistency between Form 26AS and AIS. 
• Turnover reported in the tax audit report not matching GST records.
• Tax deductions claimed not proportionate to reported income.
• High-value transactions reflected in financial statements or AIS.
• Property transactions or other income not disclosed in the ITR.

Types of Notices u/s 143(2)

Below is a rundown of the types of notices you can receive under section 143(2) of the Income Tax Act, 1961.

The Limited Scrutiny

These notices are generally selected through Computer-Assisted Scrutiny Selection (CASS) based on predefined risk parameters.

The assessment here focuses only on specific issues mentioned in the notice, for example foreign tax credit claims, property sale transactions, or certain deductions.

The Complete Scrutiny

As the name suggests, this involves a comprehensive review of the income tax return filed along with supporting documents. Cases may be selected through CASS, and the assessing officer may also examine previous years’ records where relevant.

Manual Scrutiny

Here, selection criteria are defined by the Central Board of Direct Taxes (CBDT). These criteria may change periodically, and such cases undergo detailed examination.

Time Limit to Issue the Notice

A scrutiny notice under section 143(2) can generally be issued within three months from the end of the financial year in which the income tax return was filed.

For example, if Mr. Mukesh filed his income tax return on 31 July 2025 for FY 2024-25, the assessing officer can issue a notice under section 143(2) only until 30 June 2026.

What is Faceless Assessment Under Section 144B?

Faceless assessment is a system through which the Income Tax Department conducts scrutiny assessments electronically. Notices are uploaded directly to the Income Tax portal.

Taxpayers usually receive alerts via email or SMS when notices are issued. Responses can be submitted online through the income tax portal.

The Faceless Assessment system ensures that the tax assessments are conducted online without you having to visit the Income Tax Department in person. 

What You Should Know About Section 143(2) Notice

Here are a few things that you must know about a notice issued under section 143(2)

• The income tax notice can be received in PDF format via email or via SMS. 
• If no ITR is filed, a scrutiny notice under section 143(2) cannot be issued; instead, a notice under section 142(1) may be issued asking you to file the return.
• As per the Faceless Assessment Scheme, the income tax notice is uploaded on the income tax portal. You can log into Portal and check the notices. You will also receive an email or SMS regarding the issuance of such notices, along with us. 
• You have to provide poof of all the income sources.
• The process may involve detailed verification depending on the type of scrutiny.

What Should I Do After Receiving Notice Under Section 143(2)?

The notice is generally received electronically through the income tax portal and email. In some cases, physical communication may also be sent.

Response Process of Notice Under Section 143(2)

• Log in to the Income Tax portal 
• Go to Pending Actions / e-Proceedings or Worklist section.
• View the notice issued.
• Submit the required response, explanations, or supporting documents as specified in the notice.

(The exact response requirements depend on the nature of the scrutiny notice.)

After submission, an acknowledgement or transaction reference number is generated.

What Will Happen If You Fail To Respond

You should not ignore this notice, as non-compliance may lead to consequences such as:

• Penalty under Section 271(1)(b) for non-compliance with notices.
• Best judgment assessment under Section 144 based on available information.
• Higher taxable income assessment leading to additional tax, interest, or penalties.
• Prosecution may occur only in serious cases of willful non-compliance.

What Is The Time Limit To Issue The Final Assessment Order

Generally, assessment orders under scrutiny are required to be completed within 12 months from the end of the relevant assessment year, subject to certain exceptions and extensions as per tax regulations.

Let The Experts Handle Your Section 143(2) Notice

Responding to a notice under section 143(2) within the prescribed timeline and accurately is essential. Failure to respond properly may lead to additional tax liabilities, penalties, or prolonged scrutiny.

Hence, NRI taxpayers should consider professional assistance when filing their ITR to reduce the chances of receiving such notices. If you receive one, consulting a tax professional with expertise in Indian tax laws can help ensure proper compliance.

One such expert we can discuss is Savetaxs. Savetaxs has been assisting NRIs with ITR filing in India and other tax-related services for years.

The experts here bring extensive combined experience to help manage tax compliance and optimize financial outcomes.