I received a scrutiny notice under Section 143(2), what happens next

Question

My return has been selected for scrutiny and I received a notice under Section 143(2), and I am worried about what this process involves. I have been reading conflicting things online and I would like to understand what Indian law actually says about this, which Act and Section applies, what the realistic timelines and costs are, and what I should be doing right now to protect my position. If the matter can be resolved without litigation I would prefer that route, but I want to know what my rights are before I agree to anything or sign any document.

MyVakeel Legal Desk · Accepted Answer

I received a scrutiny notice under Section 143(2), what happens next is governed in India primarily by Income-tax Act, 1961, Section 143(2), Income-tax Act, 1961, Section 143(3) and Income-tax Act, 2025. The short answer is set out below, followed by the practical steps most people in this situation need to take. Read it alongside the specific provisions named, because the exact relief available to you turns on the facts you can prove on paper.

Section 143(2) of the Income-tax Act, 1961 empowers the assessing officer to issue a notice for scrutiny where the return is selected, often through the Computer Assisted Scrutiny Selection system, and this notice must generally be issued within a specified period from the end of the financial year in which the return was filed, failing which the scrutiny itself becomes invalid for want of limitation.

Scrutiny assessment today is largely conducted under the Faceless Assessment Scheme, meaning you will typically not meet the assessing officer in person; instead, notices, questionnaires and responses are exchanged electronically through the National Faceless Assessment Centre, and you should respond to every notice within the timeline given to avoid an ex parte or best judgment assessment under Section 144.

You should gather all supporting documents relevant to the items likely to be examined, such as source of large deposits, high-value transactions reported in the Annual Information Statement, or specific deductions claimed, and respond point by point with evidence rather than generic explanations, since the final assessment order under Section 143(3) will be based on the record built during this process.

If additions are made to your income in the final order under Section 143(3), you have the right to appeal to the Commissioner of Income Tax (Appeals) under Section 246A within thirty days of receiving the order, and you may also apply for stay of demand pending appeal if the tax demanded is disputed.

What to do next: 1) Verify the notice on the e-filing portal and note the response deadline; 2) Compile documentary evidence for the specific issues flagged; 3) Respond to each notice within the faceless assessment portal on time; 4) Consult a tax professional before the final hearing or draft assessment order.

If the other side has already issued a notice, filed a case or set a deadline, treat the matter as time-sensitive — most remedies under Income-tax Act, 1961, Section 143(2) carry limitation periods, and a delay you cannot explain weakens an otherwise strong case. You can post the details on the MyVakeel forum for a practising advocate to review, or book a paid consultation with a Bar Council verified lawyer in this practice area.