Income Tax Scrutiny Handling

Income Tax Assessment Under Section 143(3) of Income Tax Act

Resolve notices, represent confidently, and protect your tax position with expert scrutiny handling.

What is Income Tax Scrutiny?

Income Tax Scrutiny is an in-depth review conducted by the Income Tax Department to verify the accuracy of your ITR (Income Tax Return). It involves examining your declared income, deductions, and financial transactions to ensure there is no misreporting or tax evasion..

Scrutiny is initiated by sending a notice under specific sections of the Income Tax Act (such as Section 143(2), 148, or 142(1)).

Why You May Receive a Scrutiny Notice

  • Mismatch in TDS vs income reported in ITR
  • High-value cash transactions (above ₹10 lakhs)
  • Unusual capital gains, losses, or refunds claimed
  • Foreign income or investments
  • Non-disclosure of income from multiple sources
  • Random selection by the IT Department

Common Sections for Scrutiny Notices

Section Purpose
143(1) Intimation about calculation errors, mismatches, refund adjustment
143(2) Regular scrutiny — income underreported, deductions overclaimed
142(1) Preliminary inquiry — for seeking additional documents
148 Reassessment if income is believed to have escaped assessment
139(9) Defective return that must be corrected
263/264 Revision of previous orders by Principal Commissioner

What Happens If You Ignore a Scrutiny Notice?

  • Mismatch in TDS vs income reported in ITR
  • High-value cash transactions (above ₹10 lakhs)
  • Unusual capital gains, losses, or refunds claimed
  • Foreign income or investments
  • Non-disclosure of income from multiple sources
  • Random selection by the IT Department

How FinXurance Supports You

We offer end-to-end assistance for handling scrutiny efficiently and professionally:

  1. Notice Review & Document Preparation
    • Analyze the exact issue raised in the notice
    • Cross-check your filed ITR, 26AS, AIS, and financial records
    • Compile a strong set of supporting documents (invoices, ledger, bank statements, agreements, etc.)
  2. Online Submission & Representation
    • Draft well-reasoned replies on the Income Tax e-Proceedings portal
    • Upload evidence and annexures in proper formats
    • File responses within deadlines to avoid ex parte assessments
  3. Representation Before Assessing Officer (AO)
    • Appear on your behalf if personal hearing is needed
    • Submit clarification, reconciliations, and legal interpretations
    • Coordinate for adjournments or resubmissions
  4. Reassessment or Appeal Filing
    • File for rectification under Section 154
    • Appeal against unjust assessments to CIT(A) or ITAT
    • Track proceedings and final order follow-up

Why Choose FinXurance for Scrutiny Cases?

  • Expert chartered accountants & legal tax professionals
  • Systematic documentation & tracking
  • Representation before income tax officers & appellate authorities
  • Regular updates and client coordination
  • Non-disclosure of income from multiple sources
  • High success rate in defending taxpayer positions
FAQs

Frequently Asks Questions

Scrutiny assessment refers to the examination of an income tax return by giving an opportunity to the assessee to substantiate the income declared and the expenses, deductions, losses, exemptions, etc. claimed in the return with the help of evidence.
During the course of scrutiny, the assessing officer gets an opportunity to conduct enquiries, as deemed fit, from the assessee and from third parties.
The exercise is aimed at ascertaining whether the income in the return is correctly shown by the assessee and whether the claims for deductions, exemptions, etc. are factually and legally correct.

If any omissions, discrepancies, inaccuracies, etc. come to light as a result of this examination, the assessing officer makes his own assessment of the assessee’s taxable income after taking into consideration all the relevant facts. These assessments are made under section 143(3) of the Income Tax Act. The assessing officer may charge mandatory additional interests and may levy penalties and may initiate prosecution proceedings.

Tax officer would perform tests and processes to confirm the correctness and genuineness of various claims, deductions, etc. made by the taxpayer in the income tax return, and to initiate a scrutiny assessment, the Income Tax officer must first issue an income tax notice u/s 143(2). The time limit to issue notice is three months from the end of the relevant F.Y. in which the return is filed.

Limited Scrutiny cases shall remain confined only to the specific reasons/issues for which the case has been picked up for scrutiny.
The time limit is only up to a period of 3 months from the end of the financial year in which the assessee filed his return.

Don’t worry!! Our expert will help you to choose a best suitable plan for you. Get in touch with our team to get all your queries resolved. Write to us at info@finxurance.com or call us @+91 9643 203 209.