How to Respond to Income Tax Notices Under Section 143(2)

A notice under section 143(2) means that your return is under scrutiny. Find out how to check, prepare and submit your reply properly.

Receiving an income tax notice under section 143(2) can be a cause of worry, especially if you are not sure why your return has been picked up for scrutiny. But just because you get this notice doesn’t mean you’ve done anything wrong.

An income tax notice under section 143(2) is issued when the Income Tax Department wants to scrutinise the return in detail. You may have to submit documents, explanations or other details to support the information provided in your ITR.

You have to read the notice carefully and reply within the time limit provided. Here’s what you need to know before submitting your response.

What is an income tax notice under section 143(2)?

A notice of income tax notice under section 143(2) is a scrutiny notice issued by the Income Tax Department. In case the Assessing Officer considers it necessary to check whether any income has been understated or excessive loss claimed or tax underpaid, he can issue the notice under the Income-tax Act, 1961.

The notice requests the taxpayer to appear or to furnish evidence in support of the return. In practice, the proceedings can be done electronically through the Income Tax e-Filing portal.

It is important to understand that a scrutiny notice is not a tax demand. It opens the study of the return. The department may ask questions about the specific income, deductions, expenses, investments or other information on the return.

Why do you receive an income tax notice under section 143(2)?

There is no single reason why a return may be selected for scrutiny. The department has guidelines for selecting certain returns for scrutiny, including cases covered by specified scrutiny parameters.

The notice may require you to explain or support information relating to areas such as:

Income reported in the ITR
Deductions and exemptions claimed
Business or professional income
Large transactions or investments
Losses claimed in the return
Tax payments and other financial information
Information that needs further verification

The information you require will depend on what the notice you receive is for and why you have it. So you can’t just rely on a generic checklist. You have to read the notice and the attachments.

Check the notice before preparing your reply

Before responding to an income tax notice under section 143(2), check the basic details carefully.

Look at:

Your name and PAN
Assessment Year
Date of the notice
DIN or document identification details
Section under which the notice was issued
Questions or information requested
Documents required
Response due date

Check the date of service of the notice, too. As far as notices under section 143(2) of the Income-tax Act, 1961 are concerned, the notice is generally to be served within a period of three months from the end of the financial year in which the return was furnished. This 3 month period is also confirmed by CBDT instructions.

This is independent of the deadline you have been given for the submission of your response.

How to respond to an income tax notice under section 143(2)

1. Read the notice from start to finish

First, be sure you understand what the Assessing Officer has asked you to supply.

If the notice only asks for certain information, don’t assume it’s asking for all of your financial information. List all questions and documents referenced in the notice.

2. Collect supporting documents

Gather the documents that support the information reported in your ITR.

Depending on the questions raised, these may include:

Form 16
Bank statements
AIS and Form 26AS
Salary or income records
Investment documents
Proof of deductions
Business records
Invoices and expense documents
Property-related documents
Previous tax records

Only submit documents that are relevant to the questions raised.

3. Match the documents with your ITR

Next, compare the information on the notice to your filed return.

Verify whether the income, deductions, expenses and other figures mentioned in your documents match with the ones declared in the ITR. This is because the difference in the output is due to the same output being obtained at the same number of iterations.

This step can also help you identify real errors in the return or learn why the department has asked for clarification.

4. Prepare a point-by-point reply

You have to specifically answer the questions asked in the income tax notice under section 143(2) of the Income Tax Act.

If the notice is about a specific deduction, for example, explain the deduction and attach documents that support it. If the department enquires about a bank transaction, identify the transaction and produce the documents needed to explain the transaction.

Do not send me a long explanation that doesn’t really explain the notice.

5. Submit the response through e-Proceedings

The Income Tax Department provides an e-Proceedings facility through the e-Filing portal. Registered users can view notices and submit responses with attachments through the portal.

The usual route is:

Log in to e-Filing portal >Pending Actions > e-Proceedings > Select the relevant notice > View Notice > Submit Response

The portal allows you to add written remarks and upload documents as required by the proceeding. After submission, keep the transaction or submission details for your records.

What documents should you keep ready?

The documents required depend on the questions in your income tax notice under section 143(2).

A useful starting point is to keep these records together:

Filed ITR and computation of income
Form 16, where applicable
Form 26AS
Annual Information Statement (AIS)
Bank statements
Investment and deduction proofs
Income and expense records
Property or loan documents, where relevant
Earlier correspondence with the Income Tax Department

Do not submit documents simply because they are available. The response should focus on the information requested in the notice.

What happens after you respond?

The scrutiny process doesn’t always end with filing a response. The Assessing Officer may look at your documents and ask you to give further information or clarification.

The e-Proceedings system of the Income Tax Department enables taxpayers or their authorised representatives to see and reply to notices issued by the Income Tax Department. The department also has a facility to view the submitted responses.

Keep copies of your notice, reply, supporting documents and submission confirmation. These records can be useful if further questions are raised later.

What if you do not respond to the notice?

If you ignore an income tax notice under section 143(2), you can land in trouble as the scrutiny may continue without the information you could have provided.

The department can take action on the material before it. So if you can’t file a document or need more time, see what options are available to you in the proceeding and act accordingly instead of just ignoring the notice.

If the issue is one of complex transactions, large amounts of money or disagreement with the department you may wish to seek professional help before lodging your response.

Section 143(2) and the new Income-tax Act

The one change that will take effect from 1 April 2026 is important. The new tax regime has replaced the Income-tax Act, 1961 with the Income-tax Act, 2025

But the Income Tax Department states that assessment process for tax years beginning before 1 April 2026 will continue to be conducted on the Income-tax Act, 1961. This implies that, prior to specifying a section number, you should check the appropriate tax year or assessment year.

The section numbers of the scrutiny provisions for the current matters under the new Act would be different. Always read the actual notice and understand the law which applies to your case.

Common mistakes to avoid

When responding to an income tax notice under section 143(2),

avoid these common mistakes:

Missing the response deadline
Sending unrelated documents
Giving an explanation without supporting evidence
Ignoring differences between the ITR and financial records
Uploading unclear or incomplete documents
Submitting information without checking it first
Giving contradictory answers in different submissions
Assuming that no response is required because the notice is only for verification

A clear response supported by relevant records makes it easier to address the questions raised in the notice.

Final steps after receiving the notice

In case of receiving an income tax notice under section 143(2), one needs to carefully examine the notice, assessment year and questions asked. After that, all the records should be collected and compared against the ITR and a point by point reply prepared.

The reply should be sent through the prescribed e-Proceedings process, keeping evidence of the sending. In case of complex issues and doubts regarding the requested information, you should seek professional help before sending a reply.

For further assistance with income tax notice under section 143(2), you can contact a professional in taxation and get your notice and documents reviewed. At MY LEGAL BUSINESS LLP

FAQs

What is an income tax notice under section 143(2)?

An income tax notice under section 143(2) is a scrutiny notice for detailed examination of a taxpayer’s return. The taxpayer may be required to supply evidence or information in support of the return.

How to respond to an income tax notice under section 143(2)?

You can reply through the e-Proceedings facility available on the Income Tax e-Filing portal where the notice is available for viewing and where you can give written remarks and upload supporting documents.

Is a section 143(2) notice a penalty?

No. A notice under section 143(2) is a scrutiny notice. Used to review the return and request supporting information. The notice is not a tax demand or penalty.

Can I see the response I submitted?

Yes. Taxpayers can view responses filed by themselves or their authorized representatives through the e-Proceedings facility of the Income Tax Department.