ITR
What happens if you do not reply in scrutiny
Updated . Every paid answer is checked by a CA. Free AI answers are labelled until a CA verifies them.
Facts
If you do not reply, the officer can pass a best judgment assessment on the material available. A penalty can also be levied for each failure to comply with a notice.
Provisions and law
- Sec 144, Income-tax Act 1961 (now Sec 271, Income-tax Act 2025)Best judgment assessment where the taxpayer fails to comply with notices.
- Sec 272A(1)(d), Income-tax Act 1961Penalty of ₹10,000 for each failure to comply with a notice under Sec 142(1) or 143(2).
Analysis
A best judgment order often adds amounts based on AIS data without giving credit for your genuine explanations. That means higher tax, interest and possible penalty, and you may have to fight in appeal. Each missed notice can add a ₹10,000 penalty. Even a late reply is better than none.
Conclusion
- Open all pending notices now.
- Reply to the latest one with whatever you have.
- Ask for time for the rest.
- Keep acknowledgements of every reply.
A Savvy can do this for you
Scrutiny assessment, Sec 143(2) (now 270(8))
₹4,999
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