Kickstart your investment
journey with just ₹500
0% commission • Earn upto 1.5% extra returns
The time limit to re-open income tax assessment cases has been reduced to 3 years from 6 years. Also, in case of serious tax evasion, the assessment can be reopened until 10 years, only when concealment of income is more than 50 lakh.
When the income tax department finds discrepancies, minor or major, in your income tax returns, a notice will be issued under Section 143(2). The discrepancies can be under-reporting income or over-reporting losses. The notice is issued to make sure that you have not underpaid tax in any way.
Step 1: Your income tax return has been filed.
Step 2: A notice is issued under Section 143(2) by the assessing officer.
Step 3: You and/or your tax representative will place your arguments in front of the assessing officer and submit documents, declarations as required.
Step 4: After considering all submissions, a final order will be passed u/s 143(3) about the tax payable or refund receivable.
You will receive one of the following notices under Section 143(2):
Limited Scrutiny: This is a Computer-Assisted Scrutiny Selection (CASS) where cases are selected based on set parameters. These are cases with inaccurate returns information or mismatches. The scrutiny will be limited to the particular area of return mentioned in the notice such as the claim of foreign tax credit or sale of a property.
Complete Scrutiny: A complete scrutiny will be carried out on the return filed and all supporting documents. The cases will be flagged based on CASS. Though the scope of scrutiny is not limited in this type, the assessing officer cannot verify documents beyond the particular assessment year.
Manual Scrutiny: Cases are selected for complete scrutiny based on the criteria defined by the Central Board of Direct Taxes; the criteria may vary every year.
The notice under Section 143(2) can be issued after an income tax return has been filed but within a period of six months from the end of the financial year in which the return was filed. For example, say, Mr Ram filed his returns on 31 July 2019 for the financial year 2018-19. The assessing officer can issue a notice under Section 143(2) only within 30 September 2020. This is because he can only issue the notice within a period of six months from the end of the financial year 2019-20, the financial year in which Mr Ram filed the returns.
You cannot take the notice lightly and ignore it. If you do not respond to the department within the stipulated time period,
|Assessment Year (AY)||Time limit from the end of the (AY)|
|2017-18 or before||21 months|
|2019-20 onwards||12 months|