Income Tax Scrutiny Notice u/s 143(2): How to Reply (2026 Guide)

A scrutiny notice arrives on the income tax portal, usually without warning, and it carries a deadline. What you do in the next few days largely determines whether the proceeding closes quietly or turns into a demand you spend two years appealing.

This guide covers the income tax scrutiny notice end to end: what it actually says, how to verify it is valid, what documents to assemble, how to reply through the portal step by step, what happens at the hearing, and the precise consequences of not responding.

It also addresses the position in 2026 specifically. The Income-tax Act, 2025 came into force on 1 April 2026, and the scrutiny notice provision is now Section 270(8) rather than Section 143(2). But the old Act continues to govern AY 2026-27 and earlier — so most notices being received right now are still Section 143(2) notices. Both are covered below.

For the wider process this notice sits inside, see our guide to income tax scrutiny assessment.

Quick Details: Income Tax Scrutiny Notice

What Is an Income Tax Scrutiny Notice?

A scrutiny notice is a formal communication from the Assessing Officer stating that your return has been selected for detailed examination, and requiring you either to attend the officer's proceedings or to produce evidence supporting the return you filed.

The statutory language is precise. Under the 1961 Act, Section 143(2) allowed the officer to serve such a notice where he considered it necessary or expedient to ensure that the assessee had not understated income, computed excessive loss, or underpaid tax. Section 270(8) of the 2025 Act carries the same power forward in substantially the same terms.

Two points are commonly misunderstood.

It is not the same as an intimation. The communication most taxpayers receive after filing is an intimation under Section 143(1) of the old Act, now Section 270(1) — an automated processing result. It is not a scrutiny notice and needs a different response.

It is not the same as a reassessment notice. Notices under Sections 148 and 148A of the old Act reopen a year already assessed, operate on much longer time limits, and follow a separate procedure. Check carefully which one you have, because the defences available differ entirely.

A scrutiny notice is also not an accusation. Case selection is largely automated, and a significant proportion of scrutiny proceedings close with no addition to income.

Why an Income Tax 143(2) Notice Should Not Be Ignored

The reply window is short. Most notices allow around 15 days. That is enough time only if your documents are already in order, which is precisely why the reconciliation work should be done at filing stage.

Non-response has a defined statutory cost. It permits a best judgment assessment and attracts penalty under Section 272A(1)(d) of the 1961 Act, currently ₹10,000 for each failure.

Best judgment assessments are usually worse than the truth. The officer estimates income from the material available — commonly bank credits — without allowing expenses you genuinely incurred but never evidenced.

Later remedies are expensive. Reversing an adverse order means appeal, professional fees and years of delay, and grounds not raised during assessment face procedural obstacles on appeal.

A defective notice is only useful if you spot it. An out-of-time notice, or one without a valid DIN, is open to challenge — but that point has to be taken, on record, at the right stage.

Key Requirements: Is Your Scrutiny Notice Valid?

Before drafting a single line of reply, check these four things. Each is a potential ground of challenge, and each takes minutes to verify.

Timing

The notice must be served within three months from the end of the financial year in which the return was furnished. A return filed in July 2025 falls in FY 2025-26, so the notice must be served by 30 June 2026.

DIN

Every notice must carry a valid Document Identification Number. A communication issued without one, outside the narrow exceptions prescribed, is treated as never having been issued.

Scope

The notice states whether the case is limited or complete scrutiny. Limited scrutiny confines the officer to the specific flagged issues, and that boundary is enforceable.

Identity

Confirm the PAN, assessment year or tax year, and return acknowledgement number on the notice match your own records. Errors here are uncommon but occasionally material.

Documents Required to Reply to a Scrutiny Notice

Reconciliation

A written reconciliation of your return against Form 26AS, the Annual Information Statement and the Taxpayer Information Summary, explaining every difference line by line. This resolves more queries than any other single document.

Income

Form 16 or salary records, business or professional income computation, audited financial statements where applicable, books of account for the year, and supporting ledgers for the items queried.

Banking

Statements for all bank accounts covering the full year, with material credits and debits identified and tied to the corresponding invoice, contract, deed or ledger entry.

Claims

Documentary proof for each deduction and exemption claimed — investment and insurance receipts, home loan interest certificates, rent receipts, and donation receipts with the required certification.

How to Reply to an Income Tax Scrutiny Notice: Step by Step

Verify

Check the date of issue against the limitation period, confirm the DIN, and note whether the scrutiny is limited or complete. Record these checks before you begin drafting your reply.

Assemble

Gather the documents for the specific queries raised, and prepare the reconciliation. Convert everything to legible PDFs with clear file names matching the query they answer.

Login

Open incometax.gov.in, sign in, and go to Pending Actions, then e-Proceedings. Locate the proceeding for the relevant year and open the notice to view the queries.

Respond

Answer each query separately and specifically, attaching the supporting document against it. Avoid general statements. A reply that says "details enclosed" without explaining them invites a further notice.

Submit

Submit the response and download the acknowledgement. Retain it with the notice and your document set — this is your proof of compliance within the window.

Follow Up

Monitor the portal for further queries, respond within each new deadline, and request a personal hearing by video conference where issues are factual, document-heavy or contested.

Benefits of Replying to a Scrutiny Notice Properly

Closure

A complete, well-evidenced reply often ends the proceeding with no addition to income. Closing at assessment stage costs a small fraction of what an appeal costs in fees, time and attention.

Penalty Defence

Penalty for underreporting is far harder to sustain where the taxpayer disclosed fully and explained each item on record. Your reply is the primary evidence of good faith.

Control

Responding keeps the determination of your income based on your documents rather than the officer's estimate. Silence transfers that determination entirely to the department.

Appeal Strength

Grounds raised and evidence filed during assessment carry weight at appellate stages. Points introduced for the first time in appeal are frequently refused admission.

Speed

Complete first replies avoid the cycle of further notices that drags proceedings out. Most delays in scrutiny are caused by partial responses, not by departmental backlog.

Common Mistakes to Avoid

Missing the Window

Allowing the reply period to lapse is the most costly error available. If more time is genuinely needed, file an adjournment request on the portal within the window rather than letting it expire.

Answering Broadly

Uploading a bundle of documents without explaining which query each answers forces the officer to reconstruct your case. Unexplained bundles generate further notices and avoidable additions.

Exceeding Scope

In limited scrutiny, volunteering material on issues not flagged can widen the examination. Answer the flagged issues fully and precisely, and nothing beyond them.

Wrong Provision

Citing Section 143(2) where Section 270(8) governs, or the reverse, undermines your credibility. Confirm which Act applies to your year before drafting.

Penalties and Consequences of Not Responding

Under the 2025 Act, best judgment assessment moves to Section 271, with the corresponding penalty provisions carried forward. The practical consequence is unchanged: the officer determines your income without your explanation.

Comparison Section

Section 143(2) Scrutiny Notice vs Section 148 Reassessment Notice

Confirming which of these you have received is the first thing to establish, because the defences and deadlines are entirely different.

Latest Updates, Rules, and Regulations

The scrutiny notice provision has changed number. With the Income-tax Act, 2025 in force from 1 April 2026, the scrutiny notice is issued under Section 270(8), and Section 270(9) provides that no such notice shall be served after the expiry of three months from the end of the financial year in which the return is furnished. Best judgment assessment moves from Section 144 to Section 271.

The limitation period is unchanged in substance. The three-month rule under Section 270(9) mirrors the proviso to Section 143(2) of the 1961 Act. Taxpayers do not need to recalculate deadlines on account of the new Act.

Most notices in 2026 are still Section 143(2) notices. Under the saving provision in Section 536 of the 2025 Act, the repealed Act continues to govern proceedings relating to earlier years. FY 2025-26 income is assessed as AY 2026-27 under the 1961 Act; FY 2026-27 income is assessed as Tax Year 2026-27 under the 2025 Act.

Faceless assessment is now statutory. Previously a scheme framed under Section 144B of the old Act, the faceless framework is embedded in the 2025 Act, with the National Faceless Assessment Centre continuing as the single interface and the right to a video-conference personal hearing preserved.

Verify before acting: published commentary on old-versus-new section mapping is inconsistent, and several widely circulated mapping tables conflict with the statutory text. The Section 270 and 271 references above are taken from the Act itself. Confirm reassessment and limitation section numbers with your tax advisor before citing them in a reply.

Frequently Asked Questions

What is an income tax notice under Section 143(2)? It is a scrutiny notice requiring you to attend the Assessing Officer's proceedings or produce evidence supporting your return, issued where the officer considers verification necessary. Under the 2025 Act the equivalent provision is Section 270(8).

What is the time limit for a Section 143(2) notice? Three months from the end of the financial year in which the return was furnished. A return filed in July 2025 falls in FY 2025-26, so the notice must be served by 30 June 2026.

How do I reply to an income tax scrutiny notice? Through e-Proceedings on incometax.gov.in. Answer each query separately with the supporting document attached against it, submit within the window, and download the acknowledgement.

How much time do I get to reply? Most notices allow around 15 days from the date of the notice, and the notice itself states the deadline. If you need longer, file an adjournment request on the portal before the window expires.

What happens if I ignore a 143(2) notice? The Assessing Officer may complete a best judgment assessment without your explanation and levy a penalty of ₹10,000 under Section 272A(1)(d). Prosecution is possible in serious cases.

Can a scrutiny notice be issued after the time limit? No. A notice served beyond the three-month period is open to challenge. Raise the objection on record at the first opportunity rather than after participating in the proceeding.

What is a DIN and why does it matter on my notice? A Document Identification Number authenticates departmental communications. A notice issued without a valid DIN, outside the narrow prescribed exceptions, is treated as never having been issued.

Is a 143(2) notice the same as a 143(1) intimation? No. An intimation under Section 143(1), now Section 270(1), is an automated processing result. A Section 143(2) notice begins a scrutiny proceeding and requires a substantive documented reply.

Do I need a CA to respond to a scrutiny notice? Not legally, but it is advisable where the queries involve books of account, business income, cash transactions or material additions. The cost of professional help at this stage is far below the cost of an appeal.

Which Act applies to my notice in 2026? If it relates to AY 2026-27 or earlier, the 1961 Act and Section 143(2). If it relates to Tax Year 2026-27 onwards, the 2025 Act and Section 270(8). Our guide to income tax notice time limits sets out the deadlines under both.

Conclusion

A scrutiny notice under Section 143(2) — now Section 270(8) for later years — is a verification proceeding with a short reply window and defined consequences for silence. Most cases are selected by an automated system on data mismatches, and most mismatches have documentary answers that already exist in your records.

Do three things first: check the notice was served within three months of the end of the financial year in which you filed, confirm it carries a valid DIN, and establish whether the scrutiny is limited or complete. Those checks shape everything that follows.

Then reply completely rather than partially. A specific, document-backed response to each query is what closes proceedings at assessment stage instead of carrying them into appeal.

If the reply window is already running, your next step is to assemble the reconciliation against your AIS and Form 26AS and file within the deadline, seeking an adjournment on the portal if you genuinely need more time. For the full process this notice sits within, read our guide to income tax scrutiny assessment.

Holding a scrutiny notice right now? The StartupFlora team assists businesses, MSMEs and professionals across India with notice replies, reconciliations and assessment representation. Talk to our team while the response window is still open.

This guide is general information, not tax advice on your specific facts. Outcomes turn on documentation and individual circumstances — consult a qualified professional on your own case.