Section 143(2) of Income Tax Act – Scrutiny Notice Explained

Key Takeaways
 

• Under Section 143(2) of the Income Tax Act, the Income Tax Department reviews your filed return.
   
• They check for errors, mismatches, or missing details in the return.
   
• After review, they may accept your return as it is or make changes to your tax liability.
   

Section 143(2) of Income Tax Act empowers the Income Tax Department to scrutinise your return to verify if the deductions, exemptions, losses, or income declared are accurate. This scrutiny ensures that taxpayers are not under-reporting their income or over-claiming deductions.

It is a follow-up to your filed return under Section 139 or in response to Section 142(1). In essence, it’s a notice for scrutiny assessment, an official way for the department to check whether your return is “okay” or has discrepancies.

Bonus point: Many assume Section 143(2) of Income Tax Act means a full tax audit, but it’s actually a limited scrutiny. The tax officer only checks specific details or discrepancies in your return, not a complete examination.

Why Do You Get a Notice Under Section 143(2) of Income Tax Act?

You may receive a Section 143(2) of Income Tax Act notice if:

• The department suspects under-reporting of income
   
• There is a mismatch in Form 26AS/AIS vs ITR
   
• You claimed excessive deductions or losses that look suspicious
   
• TDS claims do not match employer filings or Form 16
   
• You were randomly selected under the Computer-Aided Scrutiny Selection (CASS) system

Rajeev had claimed ₹220,000 in HRA exemption and ₹350,000 as home loan interest, which may have triggered the notice. Sometimes, even an error in reporting small interest income from savings accounts or FDs can cause a discrepancy flag.

Types of Scrutiny Under Section 143(2) of Income Tax Act

Scrutiny under Section 143(2) of Income Tax Act can be classified into the following types:
 

Rajeev’s notice mentioned “Limited Scrutiny Mismatch in TDS Credit.” This meant the department was only interested in verifying a specific point in his return, not every single detail.

Timeline: When and How You Receive Section 143(2) of Income Tax Act

Section 143(2) of Income Tax Act prescribes a specific timeframe within which this notice can be issued. As per law:

• The notice must be issued within 3 months of the end of the financial year in which the return is filed.
   
• For returns filed in AY 2024–25 (FY 2023–24), the deadline to serve the notice under 143(2) is 30th June 2025.

The Income Tax Department follows strict timelines for issuing a notice under Section 143(2). The table below explains the sequence with an example.
 

This timeline shows that the notice must always be issued within three months from the end of the financial year in which the return is filed.

Section 143(2) of Income Tax notices are typically delivered by email or made available on the Income Tax e-Filing Portal under the e-Proceedings tab.

What Should You Do After Receiving Section 143(2) of Income Tax Act?

Here’s how you should respond to section 143(2) of Income Tax notice:

1. Don’t Panic: The notice isn’t an allegation of wrongdoing. It’s a routine query.
    
2. Read the Notice Carefully: Understand what aspect of your return is under scrutiny, whether it’s TDS, HRA, deductions, capital gains, or business income.
    
3. Check Form 26AS and AIS: These documents help reconcile income and TDS figures with your return.
    
4. Respond Promptly: Submit your response and documents online through the Income Tax Portal under the e-Proceedings section.
    
5.  

Rajeev, after speaking to his employer and CA, realised that the Q4 TDS entry by his company had not been reflected in Form 26AS by the time he filed. He uploaded his salary slips and Form 16 as evidence.

Bonus Tip: Taxpayers can often respond to notices under Section 143(2) electronically through the income tax e-filing portal, which helps avoid in-person meetings with tax officers.

Mode of Communication: E-Assessment System

With the implementation of the Faceless Assessment Scheme, communication is now electronic. There are no in-person meetings or visits to the income tax office.
 

Income Tax Portal (My Account > E-Proceedings)

Response Submission

Through the Portal with supporting documents

This system enhances transparency, reduces human discretion, and ensures a documented audit trail.

What Happens After You Respond?

Once you submit your response:

• The Assessing Officer will verify the documents
   
•