Income Tax Assessment (Scrutiny) (143(3))

Income Tax Assessment (Scrutiny) (143(3))

🕵️ Income Tax Scrutiny Assessment under Section 143(3) – Complete 2025 Guide
Receiving a notice from the Income Tax Department under Section 143(3)? Don't panic — but don't ignore it either.
This section deals with the detailed scrutiny assessment of your Income Tax Return (ITR). The objective is to verify whether your declared income, deductions, and tax paid are accurate and supported by valid documents.
In this blog, we break down what Section 143(3) is, why you're selected for scrutiny, the procedure, documents required, and how our expert team ensures you respond professionally, legally, and confidently.

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📌 What is Section 143(3) of the Income Tax Act?
Section 143(3) refers to a scrutiny assessment where the Income Tax Department carries out a detailed examination of your return to confirm:
•    Accuracy of income declared
•    Validity of deductions/exemptions claimed
•    Verification of asset/liability disclosures
•    Any concealment or underreporting of income
✅ If satisfied, the department finalizes the assessment and determines your tax payable/refund. If not, additional tax demand or penalties may follow.

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📬 Why Do You Get a Notice under Section 143(3)?
The scrutiny assessment is generally triggered by:
•    Mismatch in Form 26AS/AIS vs. ITR
•    High-value transactions (property, foreign travel, crypto, etc.)
•    Claiming large refunds or exemptions
•    Random selection via Computer Aided Scrutiny Selection (CASS)
•    Suspicious bank entries or unreported income
•    Multiple ITR revisions
•    Non-reporting of foreign income/assets
📌 You’ll typically receive a 143(2) notice first, which signals the intent to initiate scrutiny under 143(3). You must respond within 15 days of receiving the notice.

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🗂️ What Documents Are Required?
To support your case, you need to submit the following (depending on the issue raised):
•    PAN, Aadhaar, and ITR acknowledgment
•    Form 16/16A (TDS certificates)
•    Salary slips, rent receipts, investment proofs
•    Bank statements and credit card statements
•    Capital gain statements (from mutual funds/stocks)
•    Foreign asset disclosures (if applicable)
•    CA audit reports (for businesses/traders)
•    Loan agreements, gift deeds, property papers
•    Crypto trading report (if applicable)
✅ Accuracy and completeness are crucial. Missing documents can weaken your case.

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🛠️ Scrutiny Assessment Process (143(3))
1. Notice under Section 143(2)
This is the first step indicating scrutiny. You must acknowledge and respond within the time mentioned.
2. Assignment to the Assessing Officer (AO)
The AO (offline or online) may issue further questionnaires via email or an e-filing portal.
3. Notice under Section 142(1)
Requesting specific documents or clarifications, like unexplained credits or deductions claimed.
4. Submission of Responses
All communication and document submission must happen via www.incometax.gov.in.
5. Personal Hearing (Optional)
In some cases, a virtual or physical hearing may be requested.
6. Final Order Passed
The AO will issue an Assessment Order under 143(3) mentioning:
•    Accepted return
•    Adjusted taxable income
•    Tax/refund payable
•    Penalties (if any)

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🕒 Time Limit for Completing Scrutiny
The final scrutiny order must be passed:
•    Within 12 months from the end of the financial year in which the return was filed
For FY 2023–24 (AY 2024–25), the deadline is 31st March 2026
📌 Delays beyond this limit may nullify the assessment unless exclusions apply.

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⚠️ Penalties for Non-Compliance
Default    Penalty
Ignoring notice    Best judgment assessment + penalty
Non-filing of response    ₹10,000–₹1 lakh depending on case
Concealment of income    100%–300% of tax evaded under Section 271(1)(c)
Misreporting foreign assets    ₹10 lakh under Black Money Act
✅ Timely and correct representation can save you from litigation.

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💼 Why Choose Us for Scrutiny Handling?
We help individuals, businesses, consultants, traders, and NRIs respond to scrutiny notices with expertise:
•    ✅ Drafting professional replies for 143(2), 142(1)
•    ✅ Collating and uploading required documents
•    ✅ Representation before AO (online/offline)
•    ✅ DTAA support (for foreign income queries)
•    ✅ Penalty mitigation and appeal filing (if needed)
📞 Received a 143(2) notice?
Don’t delay — let our CA experts help you respond accurately and close the assessment with confidence.

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🏁 Final Thoughts
A scrutiny under Section 143(3) doesn’t always mean something is wrong, but your response makes all the difference. With growing automation and data intelligence, tax scrutiny in India is becoming more common, but also more structured.
✅ Stay calm, stay compliant — and let our experts handle your scrutiny assessment smartly.