Answer

ITR

Reply to a show cause notice with draft assessment

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  1. Facts

    Before passing an order with additions, the faceless unit issues a show cause notice with a draft. This is your last chance to explain before the final order.

  2. Provisions and law

    • Sec 144B, Income-tax Act 1961 (now Sec 273, Income-tax Act 2025)Assessments are done in faceless mode through the National Faceless Assessment Centre.
    • Sec 143(3), Income-tax Act 1961 (now Sec 270(10), Income-tax Act 2025)Officer passes a scrutiny assessment order after considering evidence.
    • Sec 270A, Income-tax Act 1961 (now Sec 439, Income-tax Act 2025)Penalty may be proposed on under-reported income.

  3. Analysis

    Answer each proposed addition separately: what the officer says, why it is wrong, and which document proves it. If part is correct, accept it and fight the rest, which keeps you credible. Ask for a video hearing if needed. Your reply here also becomes the record for any appeal later.

  4. Conclusion

    1. List each proposed addition in the draft.
    2. Write a point-wise reply with evidence.
    3. Request a video hearing if useful.
    4. Submit before the due date.

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Scrutiny assessment, Sec 143(2) (now 270(8))

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