Section 143(2) of Income Tax Act, 1961:- How to Respond It 

What is Section 143(2):-Diwali celebration

It is a notice issued u/s 143(2), upon finding discrepancies in either under-reporting of income or over-reporting of losses in respond to File Income Tax Return. This can be called the Second Chance from the IT Department.

Section 143(2)

Prerequisites about the notice sec 143(2):-

The following are the necessities that are required to be kept in mind,  the following are:-

  When you receive the notice u/s 143(2), you must produce all documents supporting the deductions, exemptions, allowances, reliefs, and other claims made while filing the returns.

  You must provide proof related to all your income sources.

  You may receive a notice in the form of a PDF via email on your registered email address. It will also be sent to the postal address.

  If you have not filed returns for the financial year, the assessing officer cannot issue a notice u/s 143(2). He must first issue a notice u/s 142(1), asking you to first file returns.

  The assessing officer does a detailed inquiry.

Time Limit for Issuance Of notice u/s 143(2):-

It is required to be issued within a period of six months from the end of the financial year in which the return was filed provided that Income Tax Return must have been filed before serving of this notice by the Income Tax Department.

Operation of sec 143(2) notice:-

Step 1:  Your income tax return has been filed either under sec 139 subsections or through notice under sec 142(1) issued by the Department on the non-filing of any IT Return for the relevant Financial Year.

Step 2:  Then, 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.

What happens if you fail to respond?

You cannot take the notice lightly and ignore it. If you do not respond to the department within the stipulated time period,

  You may be subject to a penalty of Rs.10,000 under Section 272A for each failure to respond.

  The assessment officer may close the assessment with the information he has with the best judgment under Section 144.

  A higher taxable income can be considered, resulting in a higher tax and penalty payable by you.

  If you choose to dispute the higher tax demand, a minimum of 20% of the tax due must be paid before you file an appeal with higher authorities.

  It may lead to prosecution; if found guilty, it may result in imprisonment.

Income Tax Return filing

Time limit to issue the final assessment order

Assessment Year (AY) Time limit from the end of the (AY)
2017-18 or before 21 months
2018-19 18 months
2019-20 onwards 12 months


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