How to respond a notice Under Section 143(2) of Income Tax Act 1961


NOTICES UNDER INCOME TAX ACT 1961

Being a human being we can commit mistakes and to rectify these mistakes we need second chance. In case if you have committed any mistake in filing your return and want to rectify it, Income Tax department gives a second chance to every individual or entity by sending different notices for different mistakes. If you get a notice from the department, you might get panic. There are chances that you even don’t know whether to accept the notice or not.

Many amongst us do not know the next step after receipt of notice. It is very important to understand that there are different notices and each notice has its own meaning.

Read in detail to be acquainted with IT notice u/s 143(2) and all other details related to it.

  • What is the meaning of u/s 143(2) notice sent to you?
  • What steps you should take or know in regard the notice?
  • How it works?
  • Different types of notice u/s 143(2).
  • Time limit for issuing the notice.
  • What will be the result if you haven’t replied?
  • Time limit for issuing final assessment order?
  • What is the meaning of u/s 143(2) notice sent to you?

When Income Tax department identifies any sort of discrepancy (may they be major or minor) in income tax return filed, a notice is issued u/s 143(2). These discrepancies occur as over reporting losses of under reporting income. The main concern of income tax department in issuing notice is that, everyone should pay proper tax neither less nor more.

What steps you should take or know in regard the notice?

A notice will be received by a person in form of PDF on mail address that is registered under the department. IT Department also sends the notice to the registered address.

If you haven’t filed the income tax return for any financial year then income tax officer cannot give notice under section 143(2). First he /she will issue notice under section 143(1) which states that you are required to file income tax return first.

When you get the notice named as u/s 143(2), you should show all the relevant documents in support of exemptions, reliefs, deductions, allowances and other different claims made by you at the time of filing the return. You should show all the proofs in regard of the income sources.

A detailed enquiry is done by assessing officer that includes every single detail of your income and expenditures and other related things.

How this assessment works?

Step 1: Your return for the financial year is filed.

Step 2: Assessing officer will issue a notice under section 143(2).

Step 3: You need to provide your answer why there are discrepancies in the return to the assessing officer and provide all the documents & declaration which are in your favor and proves you are not guilty.

Step 4: On accessing your answer, a notice under section 143(3) will be issued to you as a final order which contains the details whether you need to pay extra tax or entitled for refund.

Different types of notices u/s 143(2)

You will get any one from the following u/s 143(2) notices:

Limited Scrutiny: This is Computer Assisted Scrutiny Selection (CASS). Here singular cases are elected by the computer itself on some set value parameters. Cases can be of inaccurate information of returns or any mismatches. This type of scrutiny is limited to specific areas of return which is mentioned in notice itself like foreign tax claim or sale of the property etc.

Complete Scrutiny: This type of scrutiny is based on return files and documents attached with the return. These cases are flagged out on the basis of CASS scrutiny. In this scrutiny, scope is not limited. Though, the assessing officer cannot check the documents after the particular year of assessment.

Manual Scrutiny: In this, cases are elected manually based on some criteria laid down by Central Board of Direct Taxes and these criteria may change every year. This scrutiny is laid down in those cases, if you have shown false documents or declarations at the time of filing the income tax return and this is a very serious affair.

Time limit for issuing the Notice

The notice u/s 143(2) is issued within the time period of 6 months after the filing of income tax return at end of financial year. You can understand this by following example: Mr. Sharma has filed is income tax return on 30 July 2018 for financial year 2017-18. It means that assessing officer has the power to issue the notice u/s 143(2) within 29 September 2019 as the notice can be issued within 6 months after end of financial year 2018-19, the year in which he has filed the return.

What will be the result if you haven’t replied?

Always remember that this notice cannot be taken lightly and don’t ignore it. In case if you have not replied within the specified time period, income tax department can take following action against you:

  • A penalty of Ten thousand rupees can be charged u/s 272A in case of failure to respond.
  • The assessing officer can close the case by giving the judgment with information he finds under section 144.
  • Higher income can be taken off which means you are required to pay higher tax, which results in extra penalty and extra tax both payable by you.
  • If you want to settle the dispute of higher tax been demanded, you need to pay minimum of twenty percent of the total tax due before filing the appeal to higher authorities.
  • If you are found guilty you may get judgment as imprisonment and may lead to further prosecution.


What is the time limit for issuing final assessment order?

Assessment Year (AY) Time limit from the end of the (AY)
2017-18 or before Twenty one months
2018-19 Eighteen months
2019-20 onwards Twelve months