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Tax notices + litigation · Income Tax Notice

Section 143(2) (now 270(8)), Scrutiny notice: the real assessment begins

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Sec 143(2) (now Sec 270(8), Income-tax Act 2025) means the IT department has selected your return for detailed scrutiny. A human AO (Assessing Officer) or faceless assessment unit will examine specific items in your return. The notice will say what is being questioned, income, deductions, transactions.

Provisions

IT Act 1961, Sec 143(2) (now 270(8)) | Time limit: 3 months from end of AY | Notice must be issued within 3 months of end of AY (for AY 2024-25 → by 30 June 2025)

Analysis

Types of scrutiny: • CASS (Computer Aided Scrutiny Selection): System-selected based on risk parameters, high cash deposits, large deductions, mismatch with TDS data. • Manual scrutiny: AO specifically selected your case, usually means a tip-off or serious red flag. Sec 143(2) (now Sec 270(8)) leads to a formal assessment under Sec 143(3) (now Sec 270(10)). You must respond, ignoring it results in best judgment assessment (AO assumes the worst and raises a demand without hearing you).

Close

  1. Check the notice date, if beyond the time limit, the notice is invalid. File a legal objection immediately.
  2. Read exactly what is being questioned, don't respond to what isn't asked
  3. Do NOT submit documents before reading the full notice, scope creep is common
  4. Engage a CA immediately, your response creates a paper trail that affects all future proceedings
  5. File initial response acknowledging receipt and requesting time extension if needed

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