Income Tax Scrutiny Notice under Section 143(2) Meaning, Response & Checklist
Have you received an Income Tax Scrutiny Notice under Section 143(2)? Don’t panic. Each year, the Income Tax Department selects returns for deeper verification to ensure everything reported is accurate.
In FY 2024-25, over 1.65 lakh ITRs have been shortlisted for scrutiny, as per CBDT’s internal compliance parameters. Here’s your complete guide on what it means, how to respond, and how to avoid unnecessary stress.
What is a Scrutiny Notice under Section 143(2)?
A notice under Section 143(2) is issued by the Assessing Officer (AO) when your filed Income Tax Return (ITR) is selected for detailed examination. This is to verify:
- Correctness of income declared
- Validity of deductions or exemptions claimed
- Potential mismatches or high-value transactions
💡 Expert Tip: Most scrutiny cases today are selected using AI-based risk profiling, not random manual selection. It doesn’t mean you’ve done anything wrong.
Types of Assessment under the Income Tax Act
| Type of Assessment | Description |
|---|---|
| Self-Assessment (140A) | You compute and pay taxes when filing ITR |
| Scrutiny Assessment (143(3)) | Issued after Section 143(2) for in-depth verification by AO |
| Best Judgment (144) | Done when you fail to respond. AO decides your income based on available info |
Key Reasons Why ITRs Are Selected for Scrutiny
- High-value transactions not matching reported income
- Mismatch in TDS or AIS data
- Claiming large deductions or refunds
- Business losses without supporting documents
- Property sales/purchases without capital gains disclosure
Documents Required for Scrutiny Response
Prepare a digital folder with the following:
- Salary Income: Form 16, Salary Slips
- Business Income: Profit & Loss Account, Balance Sheet, GST returns
- Investments: PPF, LIC, ELSS proofs
- Property: Sale deeds, Rent agreements
- Others: Bank statements, source of large cash deposits
📁 Format Tip: Submit only PDF/JPEG files, clearly labelled and easy to read.
How to Respond to Section 143(2) Notice?
Follow this step-by-step guide:
- ✅ Login to incometax.gov.in
- 👉 Go to the e-Proceedings section
- 📄 Read the notice carefully, especially the due date for reply
- 📝 Prepare point-wise responses based on the questions raised
- 📎 Attach all relevant documents
- 🚀 Click “Submit” before the deadline (usually 15 days)
- 🔁 Keep checking your portal & email for further communications
🧑⚖️ Legal Note: As per CBDT Circulars, all scrutiny cases are now faceless and conducted online. No officer will visit you or ask for bribes — ignore fraudsters.
Does a 143(2) Notice Mean You Did Something Wrong?
Not at all. Scrutiny is not a penalty, it’s just a verification step.
- Many cases close with zero additions
- If your records are clear, there’s no issue
- Timely and transparent response is key
Latest CBDT Guidance
As part of its risk-based compliance, CBDT selects a limited number of cases for scrutiny. This year’s selection is based on data analytics, third-party information, and automated red flags.
📘 Source: CBDT Annual Report & Risk Management Framework, 2025
Frequently Asked Questions (FAQs)
Q1. How do I know if I’ve received a scrutiny notice?
Check your email and login to the Income Tax portal. Section 143(2) will be mentioned clearly.
Q2. Can I handle the notice myself or should I consult a CA?
If your return is simple, you can respond yourself. But for business or complex cases, consult a tax expert.
Q3. What happens if I ignore the notice?
Non-response may lead to Best Judgment Assessment under Section 144 with penalties.
Q4. Can I withdraw or cancel a scrutiny notice?
No. Once issued, it must be responded to within the deadline.
Summary
Income Tax Scrutiny Notice under Section 143(2) means your ITR is under detailed verification. It’s not a penalty—respond online with correct documents, stay calm, and seek professional help if needed.
Final Words: Don’t Panic, Just Respond
Getting a scrutiny notice is not the end of the world. It’s part of a system that ensures fairness. Responding sincerely and on time can close the matter smoothly.