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What is a Notice under Section 143(3)?
A Notice under Section 143(3) is issued when the Income Tax Department selects a return for detailed scrutiny to verify the correctness of income, deductions, and claims made in the ITR.
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Why is a Scrutiny Notice issued?
It is issued to ensure that the income declared in your return is accurate and that no income has been concealed or understated.
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Who issues the 143(3) Scrutiny Notice?
The Assessing Officer (AO) of the Income Tax Department issues this notice after reviewing your return under Section 143(2).
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How much time do I have to reply to a 143(3) Notice?
The notice usually specifies a date by which you must respond. It is advisable to reply within the given deadline, generally within 15 to 30 days from receipt.
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What documents are required to reply to a Scrutiny Notice?
Documents such as ITR acknowledgment, Form 16, bank statements, purchase or sale invoices, and proof of deductions or exemptions must be submitted.
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How should I reply to a Scrutiny Notice?
The reply must be filed online on the Income Tax e-filing portal through the “e-Proceedings” section using valid login credentials.
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What happens if I ignore the Notice under 143(3)?
Ignoring the notice can lead to ex-parte assessment, additional tax demand, penalties, or even prosecution in severe cases.
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Can I request more time to reply to the Scrutiny Notice?
Yes, you may apply online for an extension citing valid reasons, and the Assessing Officer may approve additional time at their discretion.
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What if I find an error in my original ITR while replying?
You can file a revised return before submitting your reply, provided the assessment is not yet completed.
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How do I know the reason for Scrutiny Selection?
The reason is usually mentioned in the notice or can be viewed under the “e-Proceedings” tab on the portal once the case is assigned.
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Can I attend the hearing physically?
In most cases, scrutiny hearings are conducted online through the Income Tax portal, but physical appearances may be required in specific cases.
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What is the difference between Section 143(2) and 143(3)?
Section 143(2) is the intimation of scrutiny, while Section 143(3) is the actual assessment order made after reviewing your reply and evidence.
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Can a professional help in replying to the 143(3) notice?
Yes, engaging a Chartered Accountant or tax consultant ensures accurate documentation and a strong response to the department.
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What is the time limit for completing a 143(3) assessment?
Generally, the Income Tax Department must complete the assessment within 12 months from the end of the financial year in which the return was filed.
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Can I revise my response after submission?
If additional documents or clarifications are needed, you can upload supplementary responses before the final assessment is completed.
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What happens after I submit my reply?
The Assessing Officer reviews your submission, may ask for more details, and then issues a final order determining your tax liability or refund.
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Can I file an appeal against the 143(3) order?
Yes, if you disagree with the assessment, you can appeal to the Commissioner of Income Tax (Appeals) within 30 days of receiving the order.
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Is it mandatory to file the reply online?
Yes, all communications and replies for scrutiny assessments are handled only through the Income Tax e-filing portal.
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What penalties can arise from a 143(3) assessment?
Penalties may include tax additions for under-reporting income, late fees, and interest under Sections 234A, 234B, and 234C.
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How does Ebizfiling assist in replying to a 143(3) Notice?
Ebizfiling helps you draft a professional reply, prepare supporting documents, and file your response online to ensure complete compliance.