Income Tax Notice Under Section 143(2)

Section 143(2) is the notice the Income Tax Department issues when it selects your return for scrutiny assessment: a detailed examination to confirm you have not understated income, over-claimed deductions or losses, or underpaid tax. It follows the routine Section 143(1) intimation and precedes the Section 143(3) assessment order. The notice is issued by the Assessing Officer, now via the National Faceless Assessment Centre, and requires you to produce evidence supporting the entries in your return. It is a request to substantiate, not a demand for tax: no amount is raised at this stage. It sits among the several types of income tax notices a filer can receive, often written as a notice u/s 143(2), and it is one of the more serious.

Three sections are easy to confuse, so hold them apart:

• Section 143(1) is the automated CPC intimation that processes your return; Section 143(2) is the officer-driven scrutiny selection; Section 143(3) is the assessment order that closes the scrutiny.
• A 143(2) notice can be issued only after a return is filed, and usually after the 143(1) intimation has gone out.

Returns are selected for Section 143(2) scrutiny mainly through the Computer-Assisted Scrutiny Selection (CASS) system, which flags returns carrying risk parameters, and through the CBDT's annual compulsory-selection guidelines. The most common triggers are a mismatch between your return and your AIS / Form 26AS / TDS data, unusually large deductions or exemptions, high-value cash deposits or property and share transactions, a substantial refund claim, undisclosed foreign income or assets, and returns linked to a search, survey, or specific information the department has received. The notice states the issue flagged, so the stated reason tells you exactly what to substantiate. Selection is risk-driven and often automated; by itself it is not an accusation of wrongdoing.

The two routes work differently. CASS is algorithmic and risk-based, and usually produces limited scrutiny aimed at one parameter. The CBDT compulsory-selection guidelines are manual, covering cases such as those flowing from a search or survey or a reopened assessment. In a limited-scrutiny notice the specific parameter is named, which is why the flagged reason is your first thing to read.

Common triggers, at a glance:

• Mismatch with AIS / Form 26AS
• Unusually large deductions or exemptions
• High-value or cash transactions
• A big refund claim
• Foreign income or assets
• Search, survey, or specific-information cases

A Section 143(2) notice must be issued within three months from the end of the financial year in which the return is furnished, under the proviso to Section 143(2) of the Income-tax Act, 1961 as amended by the Finance Act, 2021 (which reduced the window from six months to three). For a return for AY 2026-27 filed during FY 2026-27, the financial year ends 31 March 2027, so the notice must be served by 30 June 2027. If it is issued even a day later, the scrutiny is time-barred and any resulting assessment can be challenged as invalid.

Work the dates once and the rule becomes concrete:

• Return filed 10 August 2026 (AY 2026-27), so the return is furnished during FY 2026-27.
• FY 2026-27 ends 31 March 2027.
• Three months later, the last date to serve the 143(2) notice is 30 June 2027.

The clock runs from the end of the financial year of filing, not the end of the assessment year. The full limitation table, section by section, showing how far back the department can go, lives on the dedicated time-limits page.

A Section 143(2) scrutiny covers only the single assessment year of the return that was selected: it does not reopen a chain of earlier years. Because the notice can be issued only for a return already filed, and only within three months of the end of the financial year of filing, it examines your most recent selected return, not several past years at once. To go back and examine income believed to have escaped assessment in an earlier year, the department must instead issue a reassessment notice under Section 148, which carries its own, and much longer, time limits. In short, one 143(2) notice equals one assessment year; reaching further back requires Section 148.

So the common fear, that scrutiny means the department digs through all your past returns, is misplaced: one 143(2) notice touches one assessment year. A separate 143(2) could issue for another year only if that year's return is independently selected within its own time limit. For the reach and current limits of reassessment, see the Section 148 reassessment notice page.

A Section 143(2) notice comes in three forms. The notice itself states which type applies, so read the stated reason first, then prepare accordingly.

In limited scrutiny you answer only the flagged point and resist scope-creep; in complete or compulsory scrutiny you prepare the whole file. The third category is compulsory scrutiny, selected under the CBDT's annual guidelines.

No. You will not visit a tax office. Since the Faceless Assessment Scheme under Section 144B, Section 143(2) scrutiny is conducted end-to-end by the National Faceless Assessment Centre (NFAC): the notice arrives in your e-Filing portal, all submissions are electronic, and there is no in-person officer allocated to you. If you disagree with a draft or show-cause finding you can request a personal hearing, which is granted through video conferencing: you (or your authorised representative or CA) attend remotely, never in person. Physical document submission is no longer required for faceless scrutiny; upload everything through e-Proceedings.

Two points worth holding on to:

• A personal hearing over video conferencing is a right you request at the draft or show-cause stage, not an in-person option; it is not a visit to the officer.
• Certain jurisdictional or exception cases, such as search, international tax, or specified central-charge cases, can fall outside faceless assessment.

The notice will name NFAC as the issuer, which is normal and genuine.

Respond to a Section 143(2) notice through the e-Proceedings tab on the income-tax e-Filing portal, before the date stated in the notice. First authenticate the notice and note the DIN; then read the stated scrutiny reason to see whether it is limited or complete; then prepare a point-by-point written submission with supporting evidence (bank statements, sale deeds, contracts, computation sheets, Form 26AS/AIS reconciliations) and upload it. Attend any scheduled video hearing with your CA. Non-response lets the Assessing Officer pass a best-judgment assessment under Section 144 on the information available, so never let the deadline lapse.

The steps, in order:

1. Verify your notice is genuine and note the DIN printed on it.
2. Read the stated scrutiny reason to see whether it is limited or complete.
3. Prepare a point-by-point written submission with supporting evidence.
4. Upload it through the e-Proceedings tab and track acknowledgements.
5. Attend any scheduled video hearing with your CA.

For complete or compulsory scrutiny, engage a CA early, because the whole file is in play and the drafting of replies matters. A full sample reply and the portal walkthrough with attachment limits, so you can reply on the e-Filing portal step by step, live on the how-to-respond page.

Documents to keep ready for a 143(2) scrutiny

Keep a tailored file, matched to the flagged issue:

• Filed return and computation of income.
• Form 16 / 16A and Form 26AS, with AIS / TIS reconciliation.
• Bank and credit-card statements for the year.
• Proof for each deduction or exemption claimed (80C, 80D, HRA, home-loan interest, and the like).
• Capital-gains proofs (sale deeds, broker or contract notes, cost records).
• Documentation for loans, gifts, and high-value or cash transactions.
• For business or profession: books of account, invoices, and GST returns.

Bring only what the notice's flagged issue requires in a limited scrutiny, and the full file for complete or compulsory scrutiny. Salaried recipients most often need only the 26AS / AIS reconciliation and their deduction proofs.

Ignoring a Section 143(2) notice lets the Assessing Officer complete a best-judgment assessment under Section 144, estimating your income and tax without your explanation, almost always to your disadvantage. You can also face a penalty of Rs 10,000 per failure under Section 272A(1)(d) for non-compliance with the notice, plus interest, and after assessment a penalty for under-reporting or mis-reporting income under Section 270A. Because you lose the chance to explain and the appeal path becomes harder, responding on time is far cheaper than ignoring.

The full picture of penalties and best-judgment assessment, section by section, sits on the consequences page.

Section 143(2) differs from the two notices people confuse it with. Section 143(1) is an automated CPC intimation that processes your return for arithmetical errors and mismatches. It is not scrutiny. Section 143(2) is a deliberate selection for detailed examination by an officer. Section 148 is a reassessment notice issued when income is believed to have escaped assessment, often for earlier years and with much longer time limits. In short: 143(1) is processing, 143(2) is scrutiny of a filed-and-selected return, and 148 is reopening a past assessment.

The three contrasts, one line each:

• Stage: the Section 143(1) intimation processes; 143(2) scrutinises; the Section 148 reassessment notice reopens.
• Trigger: 143(1) runs on every return; 143(2) follows CASS or CBDT selection; 148 follows a belief that income escaped assessment.
• Time limit: 143(2) within three months of the FY-end of filing; 148 on its own, much longer limits.

A 143(2) scrutiny is often preceded by a Section 142(1) inquiry notice asking for information or documents. For the full attribute comparison of the two, see 142(1) vs 143(2) compared side by side.