Notice under Section 143(2) — FAQs

Notice under Section 143(2) of the Income Tax Act — Scrutiny Assessment

Receiving a notice from the Income Tax Department often causes immediate concern, especially when the communication refers to Section 143(2) of the Income Tax Act. Many taxpayers assume that such a notice indicates wrongdoing or imminent tax demand. In reality, a notice under section 143(2) serves a procedural and statutory purpose—it merely signifies that the return filed has been selected for scrutiny assessment.

Section 143(2) operates at a critical stage of the assessment framework. While processing under section 143(1) is automated and limited to arithmetical and data-based checks, section 143(2) marks the transition from system-based processing to detailed verification by the tax authorities. This FAQ page explains the legal basis, timelines, scope, and consequences of a notice under section 143(2), enabling taxpayers and professionals to understand the provision in its proper statutory context and respond with confidence.

Income Tax scrutiny assessment process initiated through Notice under Section 143(2)

Frequently Asked Questions-Notice under Section 143(2)

A notice under Section 143(2) is a statutory notice issued by the Income Tax Department to inform a taxpayer that the Income Tax Return filed has been selected for scrutiny assessment. The purpose of this notice is to verify whether income has been correctly declared and deductions or exemptions have been properly claimed.

A notice under section 143(2) can be issued only after the Income Tax Return has been filed and within three months from the end of the financial year in which the return is filed, subject to amendments. If this notice is not issued within the prescribed time limit, the return cannot be taken up for scrutiny.

No. Notices under section 143(2) are issued only in selected cases based on risk parameters, data analytics, mismatches, or random selection. Most returns are accepted after processing under section 143(1) without scrutiny.

No. Receipt of a notice under section 143(2) does not imply concealment of income or tax evasion. It merely indicates that the return has been selected for verification. Many scrutiny assessments are completed without any tax addition.

An intimation under section 143(1) is a system-generated processing outcome, whereas a notice under section 143(2) is a statutory notice initiating scrutiny assessment. Processing under section 143(1) does not involve enquiry, while section 143(2) authorises the Assessing Officer to examine the return in detail.

After issuance of a notice under section 143(2), the Assessing Officer may call for information, documents, or explanations under section 142(1). The assessment proceedings then continue through electronic communication under the faceless assessment framework.

Yes. Valid service of notice under section 143(2) within the prescribed time limit is a jurisdictional requirement. Without a validly served notice, any assessment framed under section 143(3) would be invalid in law.

A notice under section 143(2) is generally served electronically through the Income Tax e-filing portal and is also communicated to the registered email ID of the taxpayer.

Limited scrutiny restricts the scope of enquiry to specific issues identified by the department, whereas complete scrutiny permits examination of the entire return. Conversion from limited to complete scrutiny requires compliance with prescribed procedures.

The taxpayer should carefully review the notice, note the assessment year and response timeline, collect relevant documents, and respond accurately through the e-Proceedings facility. Non-compliance may lead to adverse inference.

Failure to comply may result in best judgment assessment, levy of penalty, or further proceedings under the Act. Therefore, timely response is essential.

No. Issuance of a valid notice under section 143(2) within the statutory time limit is mandatory for framing an assessment under section 143(3).

Yes. A notice under section 143(2) can also be issued in respect of returns filed in response to notices under section 142(1).

Proceedings initiated under section 143(2) culminate in an assessment order under section 143(3), determining the final taxable income and tax liability.

FAQs explaining Notice under Section 143(2) issued for income tax scrutiny assessment
Income Tax Notices & Assessments FAQs — Section 143(2) scrutiny notice explained

Key Takeaway

A notice under Section 143(2) is the statutory gateway to scrutiny assessment under the Income-tax Act. It does not, by itself, determine tax liability or imply concealment of income. Instead, it authorises the Income Tax Department to examine the return in detail to verify the correctness of income declared and claims made.

Issuance and valid service of the notice within the prescribed time limit is a jurisdictional requirement, without which a scrutiny assessment cannot legally proceed. Once the notice is issued, the assessment process moves into the faceless assessment framework, where enquiries are conducted electronically and culminate in an assessment order under section 143(3).

Understanding section 143(2) is therefore essential for effective tax compliance. A timely, accurate, and well-documented response not only ensures procedural compliance but also significantly reduces the risk of adverse additions, penalties, or prolonged litigation. Proper appreciation of the scope and limitations of section 143(2) enables taxpayers to approach scrutiny proceedings as a structured verification process rather than as an allegation of default.

Next steps

Key official sources

Disclaimer

This FAQ is for informational purposes only and does not constitute legal or professional advice. Tax positions should be evaluated based on individual facts and applicable law.