Notice Under Section 143(2) Income Tax Scrutiny: Meaning, Time Limit, Reply & What to Do

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Receiving a notice under Section 143(2) income tax scrutiny often means your Income Tax Return has been selected for scrutiny. The Income Tax Department uses the scrutiny process to verify the correctness and completeness of information reported in your ITR, including income, deductions, exemptions, losses, and other claims.

If you receive a notice under Section 143(2), do not ignore it. Check the notice carefully, identify the issues mentioned, collect supporting documents, and submit a complete response within the prescribed time.

KKS Capital Advisors helps taxpayers understand and respond to income tax scrutiny notices, including documentation, online submissions, and tax representation.

What Is a Notice Under Section 143(2) of the Income Tax Act?

A notice under Section 143(2) is issued when the Assessing Officer wants to examine the correctness and completeness of an income tax return through scrutiny assessment.

In simple terms, an income tax notice under Section 143(2) tells you that the department wants additional information, documents or explanations regarding your ITR.

The notice itself does not mean that you have committed tax fraud or that additional tax is automatically payable.

The Income Tax Department uses scrutiny to verify matters such as:

• Income reported in the ITR
• Deductions and exemptions claimed
• Business or professional income
• Capital gains
• High-value transactions
• Losses claimed or carried forward
• Investments and financial transactions
• Information received from third parties
• Differences between the ITR and information available with the department

The statutory provisions under Section 143(2) provide for requiring the taxpayer to attend or produce evidence supporting the return.

Quick Answer: What Does a Section 143(2) Notice Mean?

A Section 143(2) notice means your filed income tax return has been selected for further scrutiny or verification.

You should:

1. Verify the notice on the Income Tax e-Filing portal.
2. Check the assessment year and DIN.
3. Read the issues mentioned in the notice.
4. Note the response deadline.
5. Collect relevant documents.
6. Prepare a point-by-point response.
7. Submit the response through the e-Proceedings facility.
8. Keep a copy of the submission and supporting documents.

The Income Tax Department’s e-Proceedings facility allows taxpayers to view applicable notices and submit responses with attachments through the e-Filing portal.

What Is Income Tax Scrutiny?

Income tax scrutiny is a detailed examination of an income tax return.

The objective is to verify whether the income, deductions, exemptions, losses and other information reported by the taxpayer are correct and properly supported.

A Section 143(2) notice is associated with scrutiny proceedings under the Income-tax Act, 1961.

For taxpayers dealing with older assessment years, the Income-tax Act, 1961 continues to be relevant. The Income Tax Department has clarified that scrutiny proceedings relating to AY 2026-27 and earlier years continue under the 1961 Act even after the new Income-tax Act, 2025 comes into force.

Why Do You Receive an Income Tax Scrutiny Notice?

There is no single reason why a return gets selected for scrutiny.

Possible areas examined during scrutiny include:

1. Income mismatch

The income reported in your ITR might differ from information available through other tax records.

For example, the department might compare your return with information relating to salary, interest, securities transactions or other reported financial activity.

2. Large financial transactions

High-value transactions can require supporting documentation and explanations.

Examples include:

• Property transactions
• Large investments
• Securities transactions
• Significant bank transactions
• High-value purchases
• Large deductions

3. Deductions and exemptions

The department might ask you to substantiate deductions or exemptions claimed in your ITR.

You might need documents such as:

• Investment proofs
• Donation receipts
• Home loan certificates
• Rent-related documents
• Insurance documents
• Medical expense records
• Other supporting evidence

4. Business or professional income

Businesses and professionals might need to provide:

• Books of accounts
• Bank statements
• Invoices
• Expense records
• GST records
• TDS details
• Financial statements
• Supporting documents for business expenses

5. Information available with the Income Tax Department

The department might have information from sources other than your ITR.

A scrutiny proceeding gives the taxpayer an opportunity to explain the relevant transaction or claim with supporting evidence.

Section 143(2) Notice vs Section 143(1) Intimation

These two communications serve different purposes.

Section 143(1)	Section 143(2)
Preliminary processing of the ITR	Scrutiny of the ITR
Generally involves automated processing	Involves further verification
Adjustments can be made as permitted by law	Documents and explanations can be requested
Does not represent detailed scrutiny	Connected with scrutiny assessment
Taxpayer receives an intimation	Taxpayer needs to respond to the scrutiny proceeding

A Section 143(2) notice should therefore not be treated as an ordinary tax-processing intimation.

Section 143(2) vs Section 142(1)

Taxpayers often confuse these two notices.

Section 142(1)	Section 143(2)
Used to request information, documents or a return in specified circumstances	Used for verification of the return in scrutiny
Can arise during assessment proceedings	Connected with scrutiny assessment
Focus depends on the information requested	Focus is on verifying the correctness and completeness of the return
Detailed documents can be requested	Evidence supporting the return can be required

In practice, taxpayers sometimes receive both notices during assessment proceedings. The correct response depends on the exact wording and requirements of each notice.

What Is the Time Limit for Issuing a Section 143(2) Notice?

For proceedings under the Income-tax Act, 1961, the current rule provides that a notice under Section 143(2) for scrutiny must generally be served within three months from the end of the financial year in which the return was furnished.

For example, if an ITR is furnished during FY 2025-26, the relevant financial year ends on 31 March 2026. The three-month period would therefore extend to 30 June 2026, subject to the applicable statutory provisions.

Tax2win also explains the three-month limitation for Section 143(2) notices under the 1961 Act.

Because tax legislation has transitioned in 2026, you should identify the relevant tax year or assessment year before applying a time-limit rule.

Important 2026 Update: Income-tax Act, 2025

The tax framework changed from 1 April 2026 with the implementation of the Income-tax Act, 2025.

This creates an important distinction for taxpayers.

If your scrutiny relates to AY 2026-27 or an earlier assessment year, the Income Tax Department has clarified that the proceedings continue under the Income-tax Act, 1961.

For newer tax years governed by the Income-tax Act, 2025, section numbering and terminology differ.

This means you should not automatically apply a new section number to an old assessment year.

Always check:

• Assessment Year or Tax Year
• Act under which the proceeding is being conducted
• Section mentioned in the notice
• Notice issue date
• Response deadline

This distinction is particularly important for taxpayers receiving notices during the 2026 transition period.

How to Check an Income Tax Notice Under Section 143(2) Online

You should verify the notice through the official Income Tax e-Filing portal.

The department provides an e-Proceedings facility through which taxpayers can view applicable notices and submit responses with attachments.

Step 1: Log in

Log in to your Income Tax e-Filing account.

Step 2: Open Pending Actions

Go to the relevant Pending Actions section.

Step 3: Open e-Proceedings

Select e-Proceedings and check the proceedings available for your account.

Step 4: Open the notice

Find the relevant notice and review:

• Section
• Assessment Year
• DIN
• Issue date
• Response date
• Questions raised
• Documents requested

Step 5: Download and save the notice

Keep a copy of the original notice for your records.

What Should You Do After Receiving a Section 143(2) Notice?

Follow a structured process.

1. Read the notice completely

Do not focus only on the first page.

Read the questions, information requirements and response instructions.

2. Identify the exact scrutiny issue

Determine what the department wants to verify.

For example:

• Salary income
• Business turnover
• Capital gains
• Property transactions
• Deductions
• Foreign income
• Bank transactions
• Investments
• Expenses
• Losses

3. Match documents with each question

Create a simple document checklist.

For example:

Query	Supporting document
Salary income	Form 16, salary records
Interest income	Bank statements, interest certificates
Capital gains	Contract notes, broker statements
Property transaction	Sale/purchase documents
Business income	Books, invoices, bank statements
Deductions	Investment and payment proofs
TDS mismatch	Form 26AS, AIS, TIS and supporting records

4. Reconcile the information

Compare the notice with your:

• ITR
• AIS
• TIS
• Form 26AS
• Bank statements
• Books of accounts
• Financial statements
• TDS records

Investigate differences before preparing your response.

5. Prepare a point-by-point reply

Your response should address each question separately.

Avoid submitting irrelevant documents without explaining their connection to the query.

6. Submit the response online

Upload the response and supporting documents through the appropriate e-Proceedings facility.

The Income Tax Department states that responses to applicable notices can be submitted through e-Proceedings with attachments.

7. Keep proof of submission

Save:

• Submitted response
• Acknowledgement
• Uploaded documents
• Notice copy
• Relevant correspondence

How to Prepare a Reply to Notice Under Section 143(2)

A good reply should be clear, factual and supported by evidence.

A basic structure is:

Subject

Reply to Notice under Section 143(2) for the relevant assessment year.

1. Taxpayer details

Include the required identification details.

2. Reference to the notice

Mention the notice date, DIN and assessment year.

3. Response to each query

Address every question separately.

4. Supporting documents

List the documents attached with each response.

5. Clarification

Explain any mismatch or difference identified during reconciliation.

6. Closing

Request that the submitted explanation and supporting documents be considered during the assessment proceedings.

Do not copy a generic reply without checking whether it addresses the specific questions in your notice.

Common Mistakes When Replying to a 143(2) Notice

Avoid these mistakes:

• Ignoring the notice
• Missing the response deadline
• Submitting incomplete documents
• Giving generic explanations
• Providing documents without explanation
• Failing to reconcile AIS and ITR information
• Making unsupported claims
• Uploading incorrect documents
• Giving inconsistent information in different submissions
• Failing to retain the submission acknowledgement

The Income Tax Department’s e-Proceedings guidance also states that once a response is submitted through the portal, it cannot be edited. Review your response carefully before final submission.

What Happens After You Reply to a Section 143(2) Notice?

After receiving your response, the tax authority can examine the information and supporting evidence submitted during the proceedings.

Further questions or document requests might follow.

The assessment process can ultimately result in an assessment order determining the taxable income and corresponding tax liability or refund, as applicable.

Therefore, receiving a scrutiny notice does not by itself establish that additional tax is payable.

The outcome depends on the facts of the case, information available with the department, taxpayer’s explanations and supporting evidence.

What Happens If You Do Not Respond to a Scrutiny Notice?

Ignoring a Section 143(2) notice is risky.

Failure to comply with statutory requirements can have consequences under the Income-tax Act, including possible assessment based on available information and applicable penalty provisions.

The exact consequences depend on the nature of the notice, the default and the applicable law.

If you are unable to understand the notice or collect the required information, seek professional tax assistance before the response deadline.

Do You Need a CA to Reply to a 143(2) Notice?

You are not required to engage a CA for every tax notice.

However, professional assistance is useful when:

• The notice contains multiple questions
• Large transactions are involved
• Business income is under scrutiny
• Capital gains are being examined
• There are AIS or Form 26AS mismatches
• Foreign income or assets are involved
• Significant deductions are questioned
• Books of accounts are requested
• The department has raised a complex tax issue
• You need representation during assessment proceedings

KKS Capital Advisors provides income tax notice reply and tax advisory support for individuals and businesses. Its services include tax advisory, ITR filing and representation related to income tax notices.

How KKS Capital Advisors Helps With Income Tax Scrutiny Notices

KKS Capital Advisors provides structured support for taxpayers dealing with income tax notices.

The process typically involves:

• Reviewing the notice
• Identifying the scrutiny issues
• Reviewing the relevant ITR
• Checking AIS, TIS and Form 26AS information
• Reconciling financial data
• Preparing document checklists
• Drafting responses
• Supporting online submissions
• Assisting with further queries
• Providing tax advisory and representation support

KKS Capital Advisors is a CA firm in Gurgaon offering tax advisory, ITR filing, and income tax notice reply services.

If you have received an income tax scrutiny notice, you should first understand exactly what the department has asked for before preparing your response.

Final Checklist After Receiving an Income Tax Scrutiny Notice

Before submitting your response, check:

• Notice is verified on the e-Filing portal
• Assessment Year or Tax Year is correct
• Applicable Act and section are identified
• DIN is checked
• Response deadline is noted
• Every question has been addressed
• Supporting documents are complete
• AIS and TIS have been reconciled
• Form 26AS has been checked
• ITR figures have been verified
• Response has been reviewed
• Attachments are correctly labelled
• Submission acknowledgement is saved

Get Professional Help With Your Income Tax Scrutiny Notice

A Section 143(2) notice requires a factual and document-based response. Start by understanding the issue, reconcile the relevant information, and answer each question with appropriate evidence.

If you need help with an income tax notice under Section 143(2), scrutiny proceedings or tax compliance, KKS Capital Advisors provides tax advisory and income tax notice reply support.