Section 143(2) Scrutiny Notice: A Complete Response Guide
Notice at a Glance
| Parameter | Details |
|---|---|
| Notice type | Scrutiny assessment selection — full or limited |
| What it means | Your return has been selected for detailed examination |
| Time limit for issue | Within 3 months from end of FY in which return was filed |
| Example | ITR filed on 31 July 2025 → notice must be issued by 30 June 2026 |
| Assessment completion time | 12 months from end of AY in which notice is issued |
| Types | Limited scrutiny (specific issue) vs Complete scrutiny (all items) |
| Can assessee appear personally? | No — faceless; all communication through e-Proceedings portal |
| Consequence of non-response | Section 144 best-judgement assessment |
| Penalty risk | Section 271(1)(b) — ₹10,000 for each failure to comply |
| IT Act 2025 equivalent | Section 270(2) read with Section 268(1) |
What the Scrutiny Notice Actually Triggers
A Section 143(2) notice is not an allegation of tax evasion. It is a selection for detailed examination. In most cases, the selection happens through CASS (Computer Assisted Scrutiny Selection) — an automated system that flags returns based on risk parameters such as:
- High-value cash transactions reported in AIS/SFT
- Capital gains not matching property registration data
- Significant discrepancy between ITR income and AIS data
- Business income below sector benchmarks
- Large deductions relative to reported income
- Foreign transactions or DTAA-related claims
The Central Board of Direct Taxes has deployed its Computer Assisted Scrutiny Selection system to automatically flag returns. The Income Tax Department is now strictly implementing the faceless assessment regime with tight statutory timelines.
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