Received Income Tax Notice u/s 143(2)? Don't Panic, Here is What You Need to Know:

Received Income Tax Notice u/s 143(2)? Don't Panic: Here is What You Need to Know When you file your Income Tax Return (ITR), you report details about your income, taxes paid, and deductions claimed for the year. Most of the time, this process is smooth, but sometimes the Income Tax Department may want to scrutinise your ITR. If the tax department finds something unusual in your ITR, it issues you a scrutiny notice under section 143(2) of the Income Tax Act, 1961.

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What is Scrunity Notice Under Section 143(2)?

Section 143(2) of the Income Tax Act gives authority to the Income Tax Department to carry out a detailed assessment of the return if it believes that there are mismatches or errors in your ITR. On finding such discrepancies, it issues a scrutiny notice under the said section to the taxpayer. The discrepancies could be large cash deposits, unexplained bank credits, mismatches between ITR and GST turnover, etc.

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However, there is no need to panic. This notice does not always mean you have done something wrong. It simply means the Income Tax Department is doing a detailed analysis of your filed return to verify the information you provided, which is normal.

I-T Dept Selects 1.6 Lakh ITR for Scrutiny

The income tax department has picked nearly 1.65 Lakh returns for scrutiny. Out of these ITRs, more than one lakh scrutiny notices have been issued under Section 143(2).

Types of Assessment in Income Tax

Here are the types of assessments in income tax that taxpayers should know:

• Self-Assessment: Here, the taxpayer calculates their tax payable and files their ITR. Most people do this.
• Scrutiny (Fair) Assessment: The Assessing Officer (AO) analyses your return and supporting documents in detail. It is conducted to verify the correctness of your ITR. The AO finalises your tax after checking everything.
• Best Judgment Assessment: If you ignore the notice or do not respond, the AO will calculate your income based on available information. This often leads to higher taxes, penalties, and interest.

Important Required Documents for Submission

Taxpayers may need to furnish the following documents:

• Bank Statements
• Salary slips
• Form 16
• Profit and Loss statement and balance sheet (for business owners)
• GST returns
• Investment proofs like LIC, PPF, ELSS, etc.
• Rent Agreements
• Sale Deed
• Source of large bank deposits

How to Respond to Scrutiny Notice Under Section 143(2)?

Here is how you can reply to the scrutiny notice under section 143(2):

• Visit the income tax portal at incometax.gov.in and log on to the website.
• Navigate to the e-Proceedings section.
• Open the notice, check what is being asked, and note the reply due date.
• Make point-wise and clear replies.
• Upload all supporting documents (PDF or JPEG).
• Submit your reply within the given deadline (usually 15 days).
• Keep on checking the portal and email for any updates from the income tax department.

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Conclusion

There is no need to panic if you get a scrutiny notice under section 143(2). Receiving this notice does not mean you have done something wrong. It is just a verification process. Timely response to the notice and be honest in your response. The responding process is completely online and faceless. If you have any doubts, it is best to consult a tax expert.