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The Income Tax Department checks your filed income tax return in detail from Income tax scrutiny assessment process. The department wants to confirm that you have reported your full income, claimed only valid deductions, and paid the correct tax. Assessment done under Income Tax Act's Section 143(3) when you received notice under section 143 (2).
Being picked for scrutiny does not mean you did something wrong. Many returns are selected through random or system-based checks. If your records are in order, you can close the case with a clear reply and proper proof.
| Point | Normal Processing (Section 143(1)) | Scrutiny Assessment (Section 143(3)) |
|
Type of check |
Computer check for errors and mismatch |
Detailed check by the department |
|
Who checks |
Central Processing Centre (CPC) system |
Assessing unit under the faceless system |
|
Documents asked |
Usually none |
Bank statements, bills, books, proof of claims |
|
Time taken |
A few weeks |
Several months |
|
Result |
Intimation with refund or demand |
Assessment order, which can change your income and tax |
| Type | What It Covers |
|
Limited scrutiny |
Only specific issues marked in the notice such as a deduction claim or a large cash deposit |
|
Complete scrutiny |
Every part of your return, including income, expenses, and deductions |
|
Compulsory scrutiny |
Cases picked under set rules, such as those linked to a search action or a notice from another authority |
A limited scrutiny case can be changed to complete scrutiny with the approval of a senior officer. Always read the notice to see which type applies to you.
The department picks returns in three ways:
Common triggers include:
| Step | What Happens |
|
1 |
Your return is selected for scrutiny |
|
2 |
Notice under Section 143(2) is sent through the e-filing portal and email |
|
3 |
Notice under Section 142(1) asks you for details, documents, and an explanation |
|
4 |
You upload your reply and proof on the portal |
|
5 |
Your replies are reviewed and may asked more questions by assessing unit. |
|
6 |
If the unit is not satisfied, it sends a show-cause notice and a draft assessment order |
|
7 |
You get time to give your objection |
|
8 |
The final order is passed under Section 143(3) read with Section 144B |
|
9 |
You pay any demand or file an appeal |
Most of the cases are now handled by a faceless assessment system. You do not meet any officer, and everything is done online. In some special situations, a video hearing can be requested.
Keep facts correct and backed by proof. A wrong statement can lead to a heavy penalty.
| Result | What It Means |
|
No change |
The department accepts your return as filed |
|
Income increased |
Some income or claim is not accepted, so tax goes up |
|
Deduction disallowed |
A claim is rejected because proof is missing or the rule is not met |
|
Refund reduced |
The refund claimed is cut down |
|
Penalty proceedings |
Penalty notice may follow if the department finds under-reporting |
| Default | Penalty |
|
Under-reporting of income (Section 270A) |
Under-reported income, 50% of the tax |
|
Misreporting of income (Section 270A) |
200% of the tax on the misreported income |
|
Not complying with a notice (Section 271(1)(b)) |
₹10,000 for each default |
|
Interest on unpaid tax |
Under Sections 234A, 234B, and 234C, 1% per month |
Misreporting includes wrong entries, false claims, and not recording a transaction. Replying honestly and on time helps you avoid the heavier penalty.
If you disagree with the assessment order, you can appeal.
You can also file a rectification request under Section 154 if the order has a clear mistake, such as a calculation error.
Scrutiny involves strict time limits and proof-based replies. A weak reply can raise your tax and invite a penalty. With CA Arpit Gupta, you get:
A scrutiny notice has strict dates, and your reply decides the result. Let an experienced Chartered Accountant study your case, prepare your reply, and handle the process for you.
Contact CA Arpit Gupta on Call or WhatsApp at: +91-7081220600
Call now to book a consultation and get your scrutiny assessment handled on time.
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