Section 143(2) Income Tax Notice for AY 2024-25: Scrutiny Assessment, Faceless Process & Deadlines Explained

1. Massive Issuance of Income Tax Notices u/s 143(2) - Detailed Guide and Professional Support

In June 2025, the Income Tax Department aggressively issued a large number of scrutiny notices under Section 143(2) for Assessment Year (AY) 2024-25.

This mass action was primarily triggered by:

a. Mismatches between ITR, AIS, and Form 26AS

b. Unreported mutual fund gains, cryptocurrency transactions, dividend incomes

c. Incorrect ITR forms used by taxpayers

d. Large cash deposits, GST mismatches, and TDS discrepancies

The Central Board of Direct Taxes (CBDT) has deployed its Computer Assisted Scrutiny Selection (CASS) system to automatically flag such returns. The Income Tax Department is now strictly implementing the faceless assessment regime with tight statutory timelines.

2. What is a Notice under Section 143(2)

A notice under Section 143(2) is issued when the Income Tax Department selects your return for scrutiny assessment.

The main objectives of the notice are:

a. To verify that income is not understated

b. To confirm that deductions or losses are not over-claimed

c. To ensure that taxes have been correctly computed and fully paid

Professional Insight: The Assessing Officer (AO) carefully examines whether the return filed is accurate and whether any income has escaped assessment.

3. Important Time Limits for 143(2) Notices

Example: For an ITR filed on 31 July 2025 (FY 2024-25), the last date for issuance of the notice is 30 June 2026.

4. Types of Scrutiny Notices under Section 143(2)

i. Limited Scrutiny - Focuses on specific issues such as high-value transactions, capital gains, or mismatches.

ii. Complete Scrutiny - Involves a detailed review of the entire return, including all deductions, incomes, and supporting documents.

iii. Manual Scrutiny - Cases selected based on special risk parameters notified by CBDT from time to time.

5. Documents Generally Required During Scrutiny under Section 143(2)

During the assessment, the AO may ask the assessee to submit specific documents within the stipulated time.

The commonly required documents include:

a. Filed ITR, Computation of Income, Form 26AS

b. TDS Certificates, Bank Statements, Capital Gains working

c. Supporting proofs for deductions under Section 80C, 80D, HRA, etc.

d. Business accounts, GST Returns, Stock Statements, Form 3CD

Note: All documents must be uploaded via the Income Tax Portal. Physical submissions are not permitted under the faceless assessment scheme.

Professional Note: The AO may further analyse these submissions to detect income escapement and may propose additions to the taxable income if discrepancies are found.

6. Faceless Assessment Process for 143(2) Notices (Section 144B)

Under the Faceless Assessment Scheme (Section 144B), all scrutiny assessments, including Section 143(2) proceedings, are:

a. Entirely digital - all communications are made via the Income Tax Portal, registered email, and SMS

b. Anonymous - the assessee does not know which AO is handling the case. Cases are electronically allocated across India

c. Video conferencing - available on request for personal hearings

d. Every communication carries a unique Document Identification Number (DIN) for traceability

7. Consequences of Non-Compliance with Section 143(2) Notices

Failure to properly respond to a Section 143(2) notice can result in:

i. Best Judgment Assessment under Section 144

ii. Penalty of ₹10,000 per default under Section 272A(1)

iii. Prosecution under Section 276D for willful default

iv. Ex-parte assessment based solely on the information available with the department

8. Best Practices to Handle Section 143(2) Notices

1. Monitor the Income Tax Portal and registered email daily
2. Prepare structured, point-wise replies to every query raised by the department
3. Submit all required documents within 15-30 days as specified in the notice
4. Appoint a Chartered Accountant (CA) for professional and technical handling
5. File timely adjournment requests if additional preparation time is needed
6. Ensure all submissions are backed by a properly signed Power of Attorney (POA)

9. Why Professional Assistance is Essential for Section 143(2) Scrutiny Notices

Scrutiny assessments under Section 143(2) involve highly technical procedures, strict timelines, and complex legal requirements that most laypersons are unfamiliar with.

Key Professional Advantages:

a. Procedural mistakes or missed deadlines can result in heavy tax demands or penalties

b. Improper submissions or missed legal objections can harm your case significantly

c. Chartered Accountants know the correct legal formats, deadlines, and how to raise critical legal challenges

d. Professionals track each deadline carefully and know how to safeguard your rights

10. Key Professional Defenses Only Experts Know in 143(2) Proceedings

i. Principle of Natural Justice

• The department must provide sufficient time to reply. If time is insufficient, the entire proceeding can be challenged
• This is a valid legal defense which most laypersons are unaware of

ii. Defects in Show Cause Notices (SCN)

• If the SCN does not properly specify proposed additions or lacks details, the notice may be legally invalid

iii. Invalid Service of Notices

• If the notice is not properly served to the correct address or email, the proceeding may be nullified

iv. Violation of Statutory Time Limits

• If the notice is issued beyond the statutory deadline (even by one day), the entire assessment is void

v. Non-Consideration of Submitted Evidence

• If the AO ignores evidence already submitted, this is a legally defective proceeding

vi. Failure to Provide Reasons for Scrutiny Selection

• If the selection reason is not properly disclosed, the scrutiny may be challenged

These procedural protections are not generally known to laypersons but are critical to protecting the assessee's rights.

11. Conclusion: Section 143(2) Notices Must Be Handled with Precision

Receiving a notice under Section 143(2) is a serious legal proceeding, but there is no need to panic. With timely responses, proper documentation, and professional assistance, scrutiny assessments can be successfully managed under the faceless regime.

We, at Varun Amita Gupta & Co., Chartered Accountants, Delhi, specialize in:

a. Income Tax Scrutiny

b. Faceless Assessment Proceedings

c. Representation and Litigation Handling

Our Complete Support Includes:

• Reviewing your notice in detail
• Preparing professional, legally sound replies
• Raising all necessary legal objections
• Representing you before the Income Tax Department from start to finish

The author can also be reached at varunmukeshgupta96@gmail.com