Income Tax Scrutiny Notice Under Section 143(2) (2026)

How to · Income Tax · Scrutiny

Updated for 2026 · Claw Editorial

A notice under Section 143(2) is the start of a scrutiny assessment, a detailed examination of your return. Unlike the routine intimation under Section 143(1), this one needs a careful, documented response. This page explains what a Section 143(2) scrutiny notice means, how the faceless assessment process works, the strict time limit to serve the notice, and how to respond so the assessment stays on track. Last verified October 2026.

01What a scrutiny notice under Section 143(2) means

A notice under Section 143(2) of the Income-tax Act, 1961 tells you that the department will examine your return in detail. It is the formal start of a scrutiny assessment. The purpose is to confirm that you have not understated income, overstated a loss, or underpaid tax.

This is more serious than the routine intimation under Section 143(1). A scrutiny can lead to a full assessment order under Section 143(3), which may add income or raise a demand. It does not mean you have done anything wrong, but it does mean you must support your return with records.

02Why your case was picked

Cases are selected for scrutiny in two broad ways: by computer based risk flags and by specific criteria the department issues from time to time. Common triggers include a large mismatch between reported income and third party data, high value transactions, repeated losses, or specific issues the department decides to examine for a year.

The notice itself does not always state the exact reason in detail. During the assessment, the officer will raise specific questions. Your job is to answer each one with evidence, not to guess at the full picture from the notice alone.

03The faceless assessment process

Most scrutiny assessments are now faceless. Under Section 144B, the process is run electronically through the National Faceless Assessment Centre (NFAC). You do not meet the officer in person. Notices, questions and your replies are exchanged on the income tax portal, and the identity of the officer is not disclosed.

In practice this means you will receive the Section 143(2) notice online, followed by one or more notices under Section 142(1) asking for specific documents and explanations. You upload your responses on the portal within the time given. Personal or video hearings are allowed in defined situations.

04Time limit to serve the notice

A notice under Section 143(2) must be served within three months from the end of the financial year in which the return is furnished. This was reduced from six months by the Finance Act 2021.

For example, a return furnished during the financial year 2025-26 must have its Section 143(2) notice served by the end of June 2026. A scrutiny cannot begin after this window closes. Whether a notice served late is valid has been examined by courts case by case, and where a taxpayer takes part in the assessment without objecting, Section 292BB can limit a later challenge.

05How to respond

1. Confirm the notice is valid. Check the date of service against the three month window and the assessment year.
2. Read every question. Each notice under Section 142(1) lists specific points. Answer each one, and do not leave gaps.
3. Gather records. Keep bank statements, invoices, contracts, and proof of deductions ready, matched to the questions asked.
4. Respond on the portal, on time. Upload clear, labelled documents within the deadline. Ask for more time through the portal if you genuinely need it.
5. Keep the record. Save every submission and acknowledgement. This record matters if you later appeal.

If the assessment order adds income or raises a demand, you can appeal to the Commissioner of Income Tax (Appeals), then the Income Tax Appellate Tribunal (ITAT), and on questions of law to the High Court. A plain mistake in the order can instead be corrected by a rectification under Section 154.

06Where Claw fits

Claw is an all-in-one legaltech platform for Indian advocates, law firms, and corporate legal teams, combining AI-based case search, an AI legal assistant (Legal GPT), case management, and compliance automation across all Indian courts and tribunals.

A scrutiny that ends in an addition you cannot accept leaves the faceless unit and goes up the appeal chain, to the Commissioner (Appeals), the Income Tax Appellate Tribunal and the High Court. How earlier benches have treated the very addition made in your case is often the heart of the argument, and Claw lets you find it. Its store of more than 30 crore judgments, covering the Supreme Court from 1950 and the High Courts from 1990, returns comparable additions and the reasoning behind them in under five seconds. Alongside the research, you can keep your own assessment in view by party or advocate name, across the 9,102 courts, benches and forums Claw tracks.

Claw does not use customer case documents to train its AI models, so the records you examine remain private to you. Create a free Claw account to study how similar additions have been decided and to follow your appeal. To research the wider body of law, see case search across Indian courts.

07Sources and further reading

• Income Tax e-filing portal: incometax.gov.in
• Income Tax Department (Act and sections): incometaxindia.gov.in
• India Code (bare Act): indiacode.nic.in
• Claw: clawlaw.in

This page is general information, not legal advice. The law changes through amendments and judgments, so check the current text and take advice from a tax professional before you act.

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