Understanding Income Tax Scrutiny Under Section 143(2): Simplified Guide

A Section 143(2) notice means the Income Tax Department has picked your return for a closer look – not that you have done anything wrong. Most cases close once you upload the right documents and explain the flagged entry on the e-Proceedings portal. This guide walks through exactly how the process works in 2026: what triggers scrutiny, how to verify your notice is genuine, how to file your reply step by step, and what happens if you miss the deadline.

1. What Triggers a Scrutiny Notice Under Section 143(2)

Section 143(2) is issued after your return is processed, when the department wants to verify specific claims or the entire return in detail. Most notices trace back to one of these triggers:

•     Mismatch between your ITR and Form 26AS or the Annual Information Statement (AIS)
•     A refund claim that looks unusually high relative to your income profile
•     Deductions or exemptions that appear disproportionate to declared income
•     High-value transactions on record – large cash deposits, property registrations, or investments – that don’t show up in your return
•     Turnover mismatches between GST returns and the tax audit report, for business and professional filers
•     Random, rule-based selection under the Computer-Assisted Scrutiny Selection (CASS) system
•     Manual selection by the CBDT for higher-risk profiles: foreign assets or transactions, undisclosed income, or search and survey cases

Knowing which of these applies to you is the fastest way to figure out what the officer actually wants to see and the documents you’ll need. If you’ve received a different notice altogether – Section 148, 154, or a demand notice – our guide to income tax notices and how to respond to each breaks down how each type differs and what response it needs.

2. How to Read Your Notice – DIN, Sections Cited & Deadline

Before you respond to anything, confirm the notice is genuine and note exactly what it’s asking for.

Verify the DIN first

Every valid notice carries a 20-character Document Identification Number (DIN). Log in to the e-filing portal and use the ‘Verify DIN’/‘Verify Service Request’ option to confirm it. A notice without a DIN, or one that doesn’t show up under your e-Proceedings tab, should not be acted on – verify before you respond.

Match the details to your return

Check that the PAN, Assessment Year, and Acknowledgement Number on the notice match your filed ITR, and read the stated reason for scrutiny – it will point to the specific mismatch or issue the officer wants explained.

Know the deadline for the notice itself

The department can only issue a Section 143(2) notice within three months from the end of the financial year in which you filed the return. For example, if you filed your return for FY 2024-25 (AY 2025-26) any time up to the due date or with a delay, the notice for that return had to reach you by 30 June 2026. A notice served after that window is legally invalid and can be challenged.

Know your reply deadline

Separately, the notice itself will state how many days you have to respond – typically between 15 and 30 days from the date of service. The exact due date is also visible on the e-Proceedings dashboard, so check the portal rather than relying only on the PDF.

A note on the new Income Tax Act, 2025

The Income Tax Act, 2025 took effect from 1 April 2026 and renamed ‘Assessment Year’ to ‘Tax Year’ along with renumbering several sections. If your notice relates to FY 2025-26 (AY 2026-27) or an earlier year, the provisions of the Income Tax Act, 1961 – including Section 143(2) as described here – continue to apply. Notices for Tax Year 2026-27 onward will cite the new Act’s section numbers and terminology, so check which Act your notice refers to before you draft a reply.

3. Step-by-Step: Drafting Your Reply on the E-Proceedings Portal

All replies to a Section 143(2) notice must be filed online through the e-Proceedings facility – emailed or physical responses are not a valid substitute.

1.   Log in to the income tax e-filing portal with your PAN and password, keeping your registered mobile number and email active for OTPs.
2.   Go to ‘Pending Actions’ and open ‘e-Proceedings’ to see every active notice linked to your PAN.
3.   Select the relevant notice for the Assessment Year in question and click ‘View Notice’ to read the full text and the response deadline.
4.   Click ‘Submit Response’ and choose whether you ‘Agree’ or ‘Disagree’ with the issue raised.
5.   If you agree, you can upload a revised computation or the relevant JSON/schedule; if you disagree, draft a point-by-point written reply addressing each query the officer has raised.
6.   Attach supporting documents as clear, readable PDFs, referencing each document against the specific point it supports.
7.   Submit the response before the deadline shown on the portal. Once submitted, a reply cannot be edited – but you can file a further response if the officer asks for more clarification.
8.   Track the case on the portal; you may receive acceptance, a further query, or move to a Section 143(3) assessment order.

If the notice requires a personal or video hearing, carry originals of everything you uploaded, since the officer may ask to see them at the appointed date, time, and venue.

4. Documents to Keep Ready Before You Respond

Gather documents by category before you start drafting, so your reply directly answers the issue flagged rather than dumping paperwork on the officer.

Financial records

•     Books of accounts – ledgers, cash/bank books, trial balance
•     Financial statements – P&L, balance sheet, cash flow statement (where applicable)
•     Audit reports – tax audit (3CA/3CB), statutory or internal audit, if applicable

Income-related documents

•     Sales/purchase registers, invoices, GST returns, export-import records
•     Bank statements, interest/dividend certificates, capital gains and Demat statements
•     Rent agreements, professional or commission income proofs

Deduction and exemption proofs

•     Form 16, salary slips, PF and gratuity details
•     Investment proofs under 80C/80D – LIC, ELSS, PPF, health insurance, home loan interest
•     House property ownership papers, municipal tax receipts, loan interest certificates

Business and statutory records

•     Stock and inventory records, contracts, GST compliance filings
•     Last 3–4 years’ ITRs, prior assessment orders, advance tax and TDS/TCS certificates
•     Bank KYC, loan documents, and digital records such as business emails or e-payment statements, where relevant to the issue raised

You only need to send what is relevant to the specific issue named in your notice – for a limited scrutiny case, avoid uploading your entire financial history unless the officer asks for it.

5. What Happens If You Miss the Reply Deadline

Missing the response window doesn’t make the notice go away – it narrows your options and typically raises your final tax outgo.

•   Penalty: ₹10,000 for each failure to comply, under Section 272A
•   Best judgment assessment: under Section 144, the Assessing Officer can finalize your assessment using only the information available to the department, usually to your disadvantage
•    Interest: additional interest under Sections 234A/B/C if the reassessment raises your tax liability
•    Higher future scrutiny risk: non-response is recorded against your compliance history and can trigger closer review in later years
•    Legal action: persistent non-compliance can escalate to prosecution

If you’re going to miss a deadline, request an extension from the Assessing Officer before it lapses – extensions aren’t automatic and are far easier to secure before the due date than after.

6. When to Bring In a CA Instead of Replying Yourself

Simple, well-documented mismatches – a missed Form 26AS entry, a small TDS gap – can often be cleared by a straightforward, honest reply. Bring in a Chartered Accountant when any of the following apply:

•   You’ve received a complete scrutiny or manual selection notice rather than a single-issue limited scrutiny
•   The notice involves foreign assets, foreign income, or cross-border transactions
•   You disagree with the officer’s position and need to build a documented, evidence-backed rebuttal
•   Multiple issues or red flags appear in the same notice, or your business has complex income streams
•   You’re unsure whether the notice itself is valid – wrong DIN, late issuance, or jurisdictional error
•   The case is heading toward a hearing, a Section 143(3) order, or a possible appeal

A professional response doesn’t just organise your paperwork – it frames the reply the way an assessing officer expects to see it, which materially affects how quickly the case closes and what it costs you.

7. PKC’s Scrutiny Notice Response Support

PKC’s tax advisory team handles Section 143(2) cases end to end, from the first notice to the final assessment order. This scrutiny defence work is part of PKC’s broader Income Tax Advisory services, covering planning, filing, and compliance review for individuals and businesses.

•   Strategic response framework built to minimize your tax liability
•   Dedicated scrutiny-defence specialists for business and professional cases
•   Round-the-clock support through the full assessment process
•   Appeal preparation included where the assessment needs to be contested
•   Complete handholding from notice receipt to assessment closure
•   Faceless assessment procedure management tailored for businesses
•   Documentation strategy designed to prevent assessment additions
•   Experienced representation that shortens scrutiny timelines

Frequently Asked Questions

Does getting a Section 143(2) notice mean I’ve done something wrong?

No. It only means your return has been picked for a closer check – through random CASS selection, a data mismatch, or a specific red flag. Plenty of scrutiny cases close with no change to the return at all.

How do I know if my notice is genuine?

Log in to the e-filing portal, open e-Proceedings, and verify the notice’s DIN using the ‘Verify DIN’ or ‘Verify Service Request’ option. A notice without a valid DIN, or one that doesn’t appear on your portal, should not be acted on.

What’s the difference between limited, complete, and manual scrutiny?

Limited scrutiny (usually CASS-driven) is restricted to the specific issue named in the notice. Complete scrutiny reviews your entire return – all income, deductions, and claims. Manual selection is chosen directly by the CBDT for higher-risk profiles, such as foreign transactions or undisclosed assets, and isn’t confined to a single issue.

Can I reply to a Section 143(2) notice by email instead of the portal?

No. Your response has to be filed through the e-Proceedings tab on the income tax portal. Email or physical submissions aren’t a valid substitute unless the notice specifically directs an in-person hearing.

What if I need more time to gather documents?

Request an extension from the Assessing Officer before the deadline lapses. Extensions aren’t automatic, and asking after the due date has passed is far less likely to succeed.

Can I revise my return after receiving a Section 143(2) notice?

Generally, once a notice under Section 143(2) (or Section 148) has been issued, filing a revised return is no longer an option for that assessment. Any correction needs to be made through your response to the notice itself.

What happens after I submit my response?

The Assessing Officer reviews your documents and either accepts your explanation, raises a follow-up query, or proceeds to a final order under Section 143(3). If you disagree with that order, you can appeal to the Commissioner (Appeals) or, beyond that, the Income Tax Appellate Tribunal.

Do I need a CA for every Section 143(2) notice?

Not always – a simple, single-issue mismatch can often be cleared with a clear, well-documented reply on your own. A CA is strongly recommended for complete or manual scrutiny, foreign-transaction cases, disputed claims, or anything likely to reach a hearing or appeal.