Income Tax Notices · AY 2026-27

Income Tax Scrutiny Notice —
Section 143(2) Explained

What a scrutiny notice means, the difference between limited, complete and CASS scrutiny, why returns get picked, and exactly how to reply online through faceless e-Proceedings.

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143(2)Scrutiny section

3 mthsNotice time limit

12 mthsOrder deadline (from AY-end)

144BFaceless regime

Quick Answer

A notice under Section 143(2) means your Assessing Officer has selected your ITR for detailed scrutiny. It can be limited (specific issues), complete (whole return) or CASS (system-selected on risk). The assessment is now faceless under Section 144B — you reply online via e-Proceedings on incometax.gov.in with supporting documents, within the deadline stated in the notice (commonly 15-30 days).

Section 143(2)

Limited scrutiny Specific issues

Complete scrutiny Whole return

Mode Faceless

Know your notice

Types of Income Tax Notices

The department issues several notices — the section decides how serious it is and how you must respond. A 143(1) intimation is routine; a 143(2) is a real scrutiny.

Section	Purpose	Reply Window	What to Do
143(1)	Intimation after ITR processing — refund, demand or no change	30 days (if demand)	Pay demand, or rectify under 154 if wrong
143(2)	Scrutiny — AO examines the return in detail	As specified	Reply online with documents; use a CA for complex cases
142(1)	Pre-assessment enquiry — AO seeks documents/details	As specified	Submit exactly what is asked; non-compliance is penalised
148	Reassessment — income believed to have escaped	Per notice	File return in response; often needs legal advice
156	Demand notice — tax, interest or penalty payable	30 days	Pay, or appeal before CIT(A) under 246A

Section references are as commonly cited; the Income-tax Act, 2025 (in force from AY 2026-27) renumbers provisions — always check the exact section quoted in your own notice on incometax.gov.in.

143(1) is not scrutiny — 143(2) is

A 143(1) intimation is auto-generated after every return is processed and is nothing to worry about by itself. A 143(2) means a human (or the faceless unit) will actually examine your income, deductions and claims. Treat it seriously and diarise the reply deadline the day you receive it.

Why me?

Common Triggers for Scrutiny Selection

Most cases are picked by CASS (Computer-Assisted Scrutiny Selection) on risk parameters, or under CBDT's compulsory-scrutiny guidelines. The usual red flags:

Large cash deposits inconsistent with declared income.
Mismatch between your ITR and AIS / Form 26AS (TDS, interest, capital gains, SFT).
High-value transactions reported by banks/registrars (property, shares, credit-card spend).
Capital gains not declared, or foreign assets / foreign income not disclosed.
Deductions (80C, 80D, HRA) that look disproportionate to income.
A history of under-reporting, or a sharp year-on-year swing in income.

TaxClue Insight

Most mismatch-driven scrutiny is avoidable. Reconcile your ITR with AIS and Form 26AS before you file — the majority of limited-scrutiny notices come from income the department already sees that the taxpayer simply forgot to report.

Want your AIS reconciled before you file, so scrutiny never starts?

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Faceless e-Proceedings

How to Respond to a 143(2) Notice

Scrutiny is now faceless under Section 144B — run by the National Faceless Assessment Centre. There are no office visits; every reply is filed online and every notice arrives by email and SMS as well as on the portal.

Log inincometax.gov.in with PAN

→

e-ProceedingsOpen the notice under Pending Actions

→

Gather proofBank, Form 16, AIS, 80C proofs

→

Submit replyUpload docs + explanation, in time

Read whether it is limited or complete scrutiny
Note the exact reply deadline
Bank statements — all accounts
Salary slips & Form 16
Form 26AS & AIS download
Investment / 80C & 80D proofs
Capital-gains statements from brokers
Property sale/purchase documents
Foreign income or asset details
Business income & expense records

Reply only to the specific issue in a limited scrutiny — do not volunteer unrelated information. For complete scrutiny, CASS cases, or anything involving capital gains, foreign income or large cash, a Chartered Accountant should draft the response and represent you.

Watch the two time limits

The department must serve the 143(2) notice within 3 months from the end of the financial year in which you filed the return — a notice served late is time-barred. Separately, the scrutiny order must be passed within 12 months from the end of the relevant assessment year. Check both dates before you reply.

Facing a complete or CASS scrutiny? Let a CA handle the reply.

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Do not ignore it

What Happens If You Do Not Respond

Ignoring a 143(2) notice is a costly mistake. The consequences escalate quickly:

If you reply properly

Issue is explained with documents and closed
No addition, or a minor agreed adjustment
Assessment order passed and matter ends
Refund, if any, is released

If you ignore it

Best-judgement assessment under Section 144
Income estimated, deductions disallowed
Penalty for under-reporting under 270A
Interest, demand notice, possible prosecution

If a best-judgement demand is raised, your remaining route is a rectification (if there is an error apparent) or an appeal before the CIT(A) — far more expensive and slower than simply replying on time.

TaxClue handles the whole notice

From reading the notice and identifying the exact issue, to drafting a documented reply and representing you before the faceless unit, TaxClue's CA-led team manages scrutiny end to end — so a notice does not turn into a demand.

Government sourcese-Filing & e-Proceedings: incometax.gov.in · Scrutiny notice: Section 143(2), Income-tax Act · Faceless assessment: Section 144B (National Faceless Assessment Centre) · Best-judgement assessment: Section 144 · Under-reporting penalty: Section 270A

Frequently Asked Questions

Basics

What is an income tax scrutiny notice?

A scrutiny notice under Section 143(2) means the Income Tax Department has selected your return for detailed examination. Instead of just processing it, the Assessing Officer (or the faceless unit) will verify your income, deductions and tax liability against supporting documents and third-party data. You must respond online with evidence within the deadline stated in the notice.

What is Section 143(2) of the Income Tax Act?

Section 143(2) is the provision under which the department issues a scrutiny notice. It is served when the department wants to make sure you have not under-reported income or over-claimed deductions or losses. Receiving it does not by itself mean you have done anything wrong — many cases are picked by system-based (CASS) selection on risk parameters.

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

Section 143(1) is a routine intimation generated automatically after your ITR is processed — it compares your return with department data and may show a refund, a demand or no change. Section 143(2) is a scrutiny notice — a detailed examination of all or specific aspects of your return by an Assessing Officer or the faceless unit. A 143(2) is far more serious and needs a documented response.

Types

What are the types of income tax scrutiny?

There are three broad types. Limited scrutiny is restricted to specific issues (for example, a single mismatch or an unusually high deduction). Complete scrutiny covers your entire return — all income sources, deductions and tax liability. CASS (Computer-Assisted Scrutiny Selection) is system-driven selection based on risk parameters, which can be limited or complete.

What is limited scrutiny?

Limited scrutiny is confined to the specific issue(s) mentioned in the notice — the Assessing Officer cannot examine anything beyond them without converting it to complete scrutiny with approval. If the mismatch is minor and you can explain it clearly with documents, limited scrutiny is often the easiest type to close. Reply only to the flagged issue and do not volunteer unrelated information.

What is faceless assessment under Section 144B?

Faceless assessment means the entire scrutiny is conducted digitally through the National Faceless Assessment Centre with no physical meetings. Notices are served on the e-Filing portal and by email and SMS, and every reply is filed online through e-Proceedings. Cases are allocated randomly across the country, which removes any local interface with a specific officer.

Triggers

What triggers an income tax scrutiny?

Common triggers include large cash deposits inconsistent with income, mismatches between your ITR and AIS or Form 26AS (TDS, interest, capital gains, SFT data), undisclosed capital gains, foreign assets or foreign income not disclosed, deductions that look disproportionate to income, and a history of under-reporting. CASS also selects returns on risk-based parameters and CBDT issues compulsory-scrutiny guidelines each year.

Does a high refund claim increase scrutiny risk?

A large or unusual refund relative to your income and TDS pattern can attract attention, especially if it is driven by deductions that are not supported by AIS or third-party data. The safest protection is to reconcile your return with AIS and Form 26AS before filing and to keep proofs for every deduction you claim.

Response

How do I respond to a Section 143(2) notice?

Log in to incometax.gov.in, go to Pending Actions and open e-Proceedings, and read the notice to see whether it is limited or complete scrutiny. Gather the relevant documents — bank statements, Form 16, Form 26AS, AIS, investment proofs, capital-gains statements — then upload them with a written explanation for each query and submit before the deadline. For complex cases, engage a CA to draft and file the response.

What documents do I need to reply to a scrutiny notice?

Typically bank statements for all accounts, salary slips and Form 16, Form 26AS and the AIS download, investment and deduction proofs (80C, 80D), capital-gains statements from brokers and mutual-fund platforms, property purchase or sale documents, foreign income or asset details, and any business income and expense records. Provide only what supports the issue raised — do not flood the file with unrelated papers.

How long do I get to respond to a scrutiny notice?

The reply window is stated in the notice itself and is commonly 15 to 30 days from the date of the notice. If you genuinely need more time you can request an adjournment through e-Proceedings, but you should file at least an acknowledgement and interim response within the given period rather than let it lapse.

Should I hire a CA to respond to a scrutiny notice?

For a limited scrutiny involving a single mismatch you can clearly explain with documents, you can reply yourself through the portal. For complete scrutiny, CASS cases, or notices involving capital gains, foreign income or large cash transactions, a Chartered Accountant is strongly recommended. A CA can frame the reply correctly, represent you before the faceless unit, and avoid inadvertent admissions that increase your liability.

Time Limits

What is the time limit for issuing a 143(2) notice?

The department must serve the scrutiny notice within three months from the end of the financial year in which the return was filed. A notice served after that date is time-barred, and any scrutiny built on it is invalid. Always check the service date on your notice against this limit.

How long can a scrutiny assessment take?

The assessment order must generally be passed within twelve months from the end of the relevant assessment year. In practice the faceless unit issues further questionnaires under Section 142(1) during this period, so keep engaging and responding until the assessment is completed and the order is served.

Consequences

What happens if I do not respond to a scrutiny notice?

Ignoring a 143(2) notice is a serious mistake. The Assessing Officer proceeds to a best-judgement assessment under Section 144, estimating your income from available information, disallowing claimed deductions and usually raising a large demand with penalty under Section 270A for under-reporting, plus interest and possible prosecution. Your only remedies then are rectification or a costly appeal.

Can I appeal a scrutiny assessment order?

Yes. If you disagree with the assessment order, you can file an appeal before the Commissioner of Income Tax (Appeals) under Section 246A, generally within 30 days of receiving the order. However, appeals are slow and expensive — replying properly during scrutiny is almost always cheaper than litigating the resulting demand afterwards.

Done-for-you

Related TaxClue Services

ITR FilingFile a clean, AIS-reconciled return so scrutiny never starts.Explore →Income Tax Notice HelpReply to any 143(1), 142(1), 148 or demand notice, done for you.Explore →Income Tax AssessmentEnd-to-end representation before the faceless assessment unit.Explore →Section 148 ReassessmentHandle income-escaping reassessment notices the right way.Explore →

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