Income Tax Scrutiny Notice: 143(3) & 144B, If you Received reply now

📄 Understanding Section 143(3) & 144B of the Income Tax Act – Scrutiny Assessment in India

🔍 What is Section 143(3)?

Section 143(3) provides for a detailed scrutiny assessment by the Income Tax Department. In this assessment, the Assessing Officer (AO) examines the return filed by the taxpayer in depth to ensure the correctness of:

• Total income reported
  
• Claims of deductions, exemptions, expenses
  
• Transactions reported in Form 26AS, AIS/TIS, etc.
  

The AO may ask for further information, documents, and explanations before finalizing the assessment.

💻 What is Section 144B?

Section 144B lays down the faceless assessment procedure, under which assessment is conducted digitally without physical interaction. It ensures:

• Complete transparency and accountability
  
• Assessment by specialized units (Assessment Unit, Verification Unit, Technical Unit, Review Unit)
  
• Communication only through electronic mode via the Income Tax portal
  

⏱️ Time Limits under Section 143(3) and 144B

1. 📬 Time Limit for Issuance of Notice (Section 143(2)):

• Notice under Section 143(2) must be issued within 3 months from the end of the financial year in which the return was filed.
  

Example:
If you filed your return for AY 2024-25 on 31 July 2024, then the last date to issue notice under Section 143(2) is 30 June 2025.

2. 📅 Time Limit for Completion of Assessment:

Example:
For AY 2023-24 (financial year ending 31 March 2023), the assessment must be completed by 31 March 2025.

✅ Reasons for Scrutiny under Section 143(3)

Scrutiny may be triggered due to:

1. High-value or suspicious transactions
   
2. Mismatch in income and TDS/26AS
   
3. Disproportionate deductions or losses claimed
   
4. Non-disclosure of foreign income/assets
   
5. Random selection under CASS
   
6. Business irregularities or related party transactions
   

📁 How to Prepare for Scrutiny

Step 1: Read the Notice Carefully

• Understand whether the notice is under Section 143(2) (scrutiny) or 142(1) (seeking info)
  
• Note the DIN, Assessment Year, and last date to respond
  

Step 2: Compile All Supporting Documents

📨 How to Respond under Faceless Assessment

Log in to Income Tax Portal:
https://www.incometax.gov.in

Go to: Pending Actions → e-Proceedings

Access the Notice: Download it and note the specific queries

Prepare Point-wise Reply:
Use simple, structured, and numbered responses for each issue

Upload Supporting Documents:

• Use clear PDFs
  
• Properly label annexures (Annexure A, B, C, etc.)
  Submit Reply: Within the timeline given in the notice
  

✍️ Sample Reply Format

Subject: Response to Notice under Section 143(2) for AY 2023-24

Respected Sir/Madam,

This is with reference to the notice under Section 143(2) dated [DD/MM/YYYY]. Please find below point-wise response:

Query 1: Discrepancy in salary income  

Response: The difference arose due to arrears received in June. Form 16 and computation attached (Annexure A).

Query 2: Claim under Section 80D  

Response: Mediclaim premium paid via bank – receipts attached (Annexure B).

… [Continue for other points] …

Regards,  

[Your Full Name]  

PAN: XXXXXXXX  

Mobile: XXXXXXXXXX  

Email: yourname@email.com

⚠️ What If You Don’t Respond?

• The AO may complete the assessment ex parte under Section 144
  
• Income may be estimated on a best judgment basis
  
• Deductions or exemptions may be disallowed
  
• You may face penalty or prosecution
  

🧾 Final Checklist

✔️ Read the notice carefully
✔️ Understand timelines
✔️ Prepare point-wise response
✔️ Gather and upload clear documents
✔️ Submit before due date
✔️ Maintain acknowledgment

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