Income Tax Assessment in India — All Types Explained

Updated: 3 June 2026 | Income Tax Act, 1961 | Faceless Assessment Scheme 2020

Income tax assessment is the process by which the Income Tax Department evaluates a taxpayer's income and tax liability. There are five types: Self-Assessment (140A), Summary Assessment u/s 143(1) (automated CPC processing), Scrutiny Assessment u/s 143(3) (detailed officer examination), Best Judgment Assessment u/s 144 (non-compliance by taxpayer), and Income Escaping Assessment u/s 148 (reopening old cases). All scrutiny assessments are now conducted under the Faceless Assessment Scheme (Section 144B) — no physical appearance required.

144B

Faceless Assessment — all scrutiny cases handled by Delhi-based National e-Assessment Centre
Randomly assigned Assessment Units; no face-to-face interaction; all submissions through e-proceedings portal. Video hearings available on request.

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Never ignore an assessment notice. Non-response to a 143(2) or 148 notice leads to Best Judgment Assessment under Section 144 — where the AO estimates income without your inputs, almost always resulting in a higher demand. Respond within the deadline; file an extension request if needed.

Types of Income Tax Assessment — Quick Reference

Section	Type	Trigger	Taxpayer Response
140A	Self-Assessment	Taxpayer files ITR and pays self-assessment tax on shortfall	Voluntary; calculate tax payable via ITR, pay Challan 280, file return
143(1)	Summary / Intimation	Automatic CPC processing of filed ITR; mismatch with TDS/AIS data	Check intimation; if demand raised, respond within 30 days or pay; file rectification u/s 154 if error
143(2) + 143(3)	Scrutiny Assessment	Return selected by risk-based algorithm; 143(2) notice issued within 3 months of FY of filing	Respond to questionnaires via e-proceedings portal; submit documents; hearing via video if needed
144	Best Judgment Assessment	Taxpayer fails to file ITR, respond to notices, or maintain books	Opportunity given before order; appeal before CIT(A) or ITAT after order
147 / 148	Income Escaping Assessment (Reopening)	AO has specific information that income escaped assessment; prior approval required	Respond to show cause notice u/s 148A; object to reopening before AO; appeal to High Court via writ
144B	Faceless Assessment	Governs the procedure for all scrutiny assessments; National e-Assessment Centre (Delhi) coordinates	All through e-proceedings; show cause notice mandatory before adverse addition

Key Time Limits — Limitation Periods

Assessment Type	Time Limit	Basis
143(1) Intimation	Within 9 months from end of AY in which return filed	E.g., for AY 2025-26 return, intimation by 31 Dec 2026
143(3) Scrutiny Order	Within 12 months from end of AY in which return filed	E.g., for AY 2025-26, order by 31 Mar 2027
148 Reopening (up to ₹50L)	Within 3 years from end of relevant AY	Standard cases of income escaping assessment
148 Reopening (above ₹50L)	Within 10 years from end of relevant AY	Only with PCCIT/CCIT approval; specific information required
Search cases (148)	Up to 10 years	Post-search/seizure proceedings

Section 143(1) — Summary Assessment

After you file your ITR, the CPC (Centralized Processing Centre) in Bengaluru processes it automatically and compares your reported income, TDS, and taxes against its database (Form 26AS, Annual Information Statement). The 143(1) intimation is sent to your registered email within a few months of filing. It will show one of three outcomes: return accepted as filed (no demand/refund), demand raised (you owe more tax), or refund determined (department owes you money). The intimation is not an assessment order and can be corrected by filing a rectification request under Section 154 if there is a factual error.

FACELESS

Section 143(3) — Scrutiny Assessment

Selected returns (typically 0.1-0.5% of all filers, chosen by risk-based algorithm) receive a 143(2) notice initiating scrutiny. Under the Faceless Assessment Scheme, the case is assigned to a random Assessment Unit. The AO sends questionnaires through the e-proceedings portal asking for explanations and documents on specific transactions. The final assessment order under 143(3) determines income and tax demand. Limitation: the order must be passed within 12 months from the end of the AY in which the return was filed.

REOPENING

Section 147/148 — Income Escaping Assessment

The AO may reopen a completed assessment if there is "reason to believe" that income has escaped assessment. Post Finance Act 2021, the AO must issue a 148A notice (show cause notice) before issuing a 148 notice. The taxpayer can respond and object to the reopening; if the AO proceeds, the taxpayer can challenge it in High Court. For amounts > ₹50L escaping assessment, reopening is permitted up to 10 years. The information triggering reopening must be "specific" — general suspicion is not sufficient after the Supreme Court ruling in Ashish Agarwal (2022).

Income-tax Act 2025 note: The Income-tax Act, 2025 (effective AY 2026-27 onwards) consolidates and renumbers many assessment provisions. The underlying assessment machinery (summary, scrutiny, reopening, faceless) remains substantively the same. Legacy section references (143, 144, 148) continue to be used in practice and in existing orders and appeals.

Frequently Asked Questions

What is the difference between a 143(1) intimation and a 143(2) notice?

A Section 143(1) intimation is an automated communication from the CPC (Centralized Processing Centre, Bengaluru) after processing your ITR. It compares your return data with information available with the department (TDS data, Form 26AS, AIS) and either confirms your return, raises a demand, or determines a refund. No human officer is involved; it is fully system-generated. A Section 143(2) notice, on the other hand, is issued by an Income Tax Officer (or National Faceless Assessment Centre under faceless assessment) when your return is selected for detailed scrutiny. It initiates a full examination of your books, income sources, deductions, and financial transactions. A 143(2) notice must be issued within 3 months from the end of the financial year in which the return was filed.

How should I respond to a scrutiny assessment notice under Section 143(3)?

When you receive a 143(2) notice (the precursor to 143(3) scrutiny), you must respond through the e-proceedings portal on the Income Tax e-filing website (incometax.gov.in). Under the faceless assessment scheme (Section 144B), all proceedings are conducted electronically — no physical visit to the IT office is required. Respond to each questionnaire or notice within the given time limit (extension can be requested for reasonable cause). Provide supporting documents (bank statements, purchase invoices, loan agreements, sale deeds, capital gain calculations) as per the specific queries raised. Always submit responses through the portal and keep acknowledgment receipts. Engaging a CA or tax advocate is advisable for complex scrutiny cases.

What are my rights under faceless assessment?

Under the Faceless Assessment Scheme (Section 144B, introduced from 2020-21), taxpayers have the right to: (1) receive show cause notice before any adverse addition to income, with at least 7 days to respond; (2) personal hearing via video conference if requested; (3) challenge the assessment before the Faceless Appeal Unit (Section 250); (4) be assessed by a randomly assigned unit — no physical interface with the assessing officer; (5) receive a reasoned assessment order. The Supreme Court in Union of India v. Ashish Agarwal (2022) affirmed taxpayer rights and struck down certain blanket reassessments, reinforcing procedural safeguards. An assessment order passed without proper show cause notice can be challenged in High Court on writ jurisdiction.

Can the Income Tax Department reopen my old ITR after 3 years?

Yes, under Section 148 (income escaping assessment), the IT Department can reopen assessments beyond 3 years in specific circumstances. For amounts up to ₹50 lakh: reopening allowed within 3 years from the end of the relevant assessment year. For amounts above ₹50 lakh: reopening allowed up to 10 years from the end of the relevant assessment year. For search cases (survey/raid): up to 10 years. A prior approval from specified authority (PCCIT/CCIT) is required for reopening beyond 3 years. Post-amendment (Finance Act 2021 and Supreme Court ruling in Ashish Agarwal), a show cause notice must be issued before any reassessment proceedings begin. The 148 notice can only be issued if the AO has specific "information" (as defined) suggesting income has escaped assessment.

What happens if I ignore or fail to respond to an assessment notice?

Ignoring an income tax assessment notice is very risky. If you fail to respond to a 143(2) notice or questionnaire, the Assessing Officer can proceed to a Best Judgment Assessment under Section 144, estimating your income based on available information — typically resulting in a higher tax demand. Additionally, under Section 271(1)(b), a penalty of ₹10,000 can be levied for each failure to comply with a notice. If the income determined in best judgment assessment results in under-reporting, penalties under Section 270A (50% to 200% of tax on under-reported income) and prosecution under Section 276CC can follow. Always respond within the specified time; if more time is needed, file an adjournment request through the portal.

Income Tax Notice ITR Filing Due Date File Income Tax Return Income Tax Refund Tax Slabs 2026-27

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