Scrutiny assessment under section 144

No it is not mandatory to issue notice u/s 143(2) . But they Issue SCN u/s 144 to provide an opportunity of being heard.

Notice is first served mandatorily under 143(2) only.

In case assessee fails to appear on hearings and/or also does not co-operate then AO has power to pass ex-party order under section 144.

Kapadia pravin it is not mandatory to issue notice u/s 143(2) in case of assessment u/s 144.
Best judgment assessment

(1) 1 ] If any person-

(a) fails to make the return required 2 under sub- section (1) of section 139] and has not made a return or a revised return under subsection (4) or sub- section (5) of that section,] or

(b) fails to comply with all the terms of a notice issued under subsection (1) of section 142 3 or fails to comply with a direction issued under sub- section (2A) of that section], or

(c) having made a return, fails to comply with all the terms of a notice issued under sub- section (2) of section 143, the 4 Assessing] Officer, after taking into account all relevant material which the 5 Assessing] Officer has gathered, 6 shall, after giving the assessee an opportunity of being heard, make the assessment] of the total income or loss to the best of his judgment and determine the sum payable by the assessee 7 ] on the basis of such assessment: 8 Provided that such opportunity shall be given by the Assessing Officer by serving a notice calling upon the assessee to show cause, on a date and time to be specified in the notice, why the assessment should not be completed to the best of his judgment: Provided further that it shall not be necessary to give such opportunity in a case where a notice under sub- section (1) of section 142 has been issued prior to the making of an assessment under this section.]

144 best judgement orders passed under the following scenarios
scenario 1
case is selected in Cass for limited or complete scrutiny by issuing 143(2) notice and if assessee non-complied with provisions of section 143(2), AO can pass 144 order after giving assessee an opportunity by issuing scn.

scenario 2:
circumstances similar to that of scenario 1 but where assessee responds to 143(2) but fails to respond to 142(1) notice issued subsequently to 143(2) notice. in this circumstance also AO can pass order 144 but he has no obligation to issue scn
scenario 3:
In assessment or reassessment proceedings if assessee fails to file ITR in response to 148 notice, AO can invoke 144 provisions and pass Best judgement order after issuing scn

scenario 4 & 5 are similar to scenarios 1 & 2 except in later it is regular scrutiny and in the former it is assessment or reassessment proceedings under section 147

Section 144 assessment is the department's last resort when a taxpayer has not responded to notices under Sections 142(1) or 143(2), or has not filed a return at all.

The Assessing Officer (AO) can complete the assessment using best judgment based on all available information: bank data, SFT filings, AIS entries, and third-party reports. You do not get to present your own figures unless you have responded at each prior stage.

Key points:
- Before the order is passed, the AO must give you one final opportunity to be heard. Use it. File a written submission with bank statements, TDS certificates, Form 26AS, and a reconciliation of income.
- After the order is passed, file an appeal before the Commissioner of Income Tax (Appeals) within 30 days of receiving the order. Also apply for a stay of demand if the assessed tax is large.
- The order will include tax, interest under Sections 234A, 234B, and 234C, and potentially a penalty under Section 270A for under-reporting or misreporting.

If the notice is still in process (notice stage, not order stage), it is much easier to resolve by responding with full documentation before the assessment is completed.

For a detailed step-by-step on how income tax scrutiny notices work and the response process, this [income tax scrutiny notice guide](https://taxgarden.in/blog/income-tax-scrutiny-notice-section-143-2-how-to-respond-india) covers what to do at each stage.