Section 143(1) intimation vs 143(2) scrutiny notice: How to distinguish and respond

Most ITR filers cheer when an income-tax email lands in their inbox, mistaking every CPC dispatch for a refund advice. They are usually right - roughly 92 percent of the 7.28 crore returns filed in AY 2024-25 closed at the Section 143(1) stage with either a refund or no change, per CBDT's year-end press note dated 6 January 2025 (incometax.gov.in). The trouble starts with the small minority who receive a Section 143(2) notice instead and skim it like an intimation. Both arrive from donotreply@incometax.gov.in, quote your PAN and assessment year, and demand a portal log-in - but the legal weight is worlds apart. One is a closing receipt; the other opens a full case file. This Q&A walks through how to tell them apart, what each statutorily requires, and how to respond on the e-filing portal without missing the deadlines that convert a query into a Section 144 best-judgement assessment.

The Scenario

Ravi Iyer, 42, a salaried professional in Pune, filed his ITR-2 for AY 2025-26 on 18 July 2025 declaring total income of Rs 18.4 lakh and a refund of Rs 47,320. On 24 February 2026 he received an email titled 'Intimation u/s 143(1)' confirming the refund. He breathed easy. On 11 May 2026 he received a second email titled 'Notice u/s 143(2)' for the same assessment year, asking him to log in and respond within 15 days. He assumed it was a duplicate intimation and ignored it.

That assumption is dangerous. The two notices serve different purposes, run on different timelines, and carry very different penalties for inaction.

Statutory Answer

Section 143(1) - Summary processing. Under Section 143(1) of the Income-tax Act, 1961, the Centralised Processing Centre (CPC) at Bengaluru runs every filed return through an automated check: arithmetic accuracy, TDS credit reconciliation against Form 26AS and the Annual Information Statement, and disallowance of obvious errors such as a deduction claim higher than the statutory ceiling. The output is an intimation that records a refund, raises a demand, or accepts the return as filed. The Finance Act 2021 fixed the outer time limit at nine months from the end of the financial year in which the return is furnished. For a return filed in FY 2025-26, that limit expires on 31 December 2026.

If the intimation contains a computational disagreement - say CPC has disallowed a TDS credit that legitimately appears in your 26AS - the remedy is a rectification application under Section 154, filed online, within four years from the end of the financial year in which the intimation was passed. If the disagreement is substantive (you forgot to declare an income head), Section 139(5) permits a revised return up to 31 December of the assessment year, i.e. 31 December 2026 for AY 2025-26.

Section 143(2) - Scrutiny notice. Section 143(2) is the statutory gate to scrutiny assessment. It is issued by the jurisdictional Assessing Officer (or the National Faceless Assessment Centre under the Faceless Assessment Scheme 2019) when the case is selected through CASS - the Computer Assisted Scrutiny Selection algorithm. The proviso to Section 143(2), amended by the Finance Act 2021, requires service within three months from the end of the financial year in which the return is furnished. For a return filed during FY 2025-26, the last date for issue of a 143(2) notice is 30 June 2026.

A Section 143(2) proceeding culminates in an order under Section 143(3), which may confirm the returned income, vary it upward, or even reduce it. Failure to respond invokes Section 144, empowering the AO to pass a best-judgement assessment ex parte - typically the worst commercial outcome.

Worked Resolution

Place Ravi's two notices side by side. The first table shows the markers; the second the slab computation.

Now the numbers. Ravi's 143(1) intimation accepted his declared income of Rs 18,40,000 under the new regime. Liability on the FY 2025-26 slabs notified in the Finance (No. 2) Act 2024 works out as below.

No Section 87A rebate applies because total income exceeds Rs 12 lakh - the FY 2025-26 ceiling for the enhanced Rs 60,000 rebate under the new regime per the Finance (No. 2) Act 2024. Ravi's employer had already deducted TDS of Rs 2,22,040 across the year, so CPC computed a refund of Rs 47,320 and credited it within 21 days. That part is closed.

The 143(2) notice issued on 11 May 2026 is a separate matter. It will list specific issue codes - say a mismatch between Schedule FA (Foreign Assets) and the AIS, or a large refund triggering a routine high-value-refund review. Ravi must:

1. Log into incometax.gov.in, go to Pending Actions - e-Proceedings, and open the case.
2. Read the questionnaire enclosed in the 'Notices' tab. Treat it as the only authoritative list of issues - do not volunteer extra disclosures.
3. Upload documentary evidence (Form 16, bank statements, contract notes, foreign-asset proofs) in PDF, each under 5 MB.
4. If more time is needed, file an adjournment request via the same tab; the Faceless Assessment Centre routinely grants one 7-15 day extension.
5. Keep the digital signature certificate or Aadhaar OTP ready - the portal requires it for submission.

Missing the deadline triggers Section 144. Suppose the AO, on best judgement, disallows Ravi's Section 80CCD(2) employer NPS contribution of Rs 1,02,000 - the only major deduction still available in the new regime under Section 115BAC. Income gets reassessed at Rs 19,42,000, tax recomputed at roughly Rs 1,95,920, and interest under Sections 234A, 234B and 234C piles on at 1 percent per month each. A Rs 47,320 refund celebration converts into a demand of Rs 23,000-plus. The remedy then is an appeal to the Commissioner (Appeals) under Section 246A within 30 days of service - and the burden of proof flips squarely onto the assessee.

Practical decision checklist

Before drafting any reply, run three checks. First, open the PDF attached to the email and search for the literal string 'u/s 143(1)' or 'u/s 143(2)' - it always appears in the document body. Second, confirm the sender DIN (Document Identification Number) on the CBDT verification portal at incometax.gov.in/iec/foservices/#/pre-login/authenticateDinNotice; every legitimate notice issued after 1 October 2019 must carry a DIN per CBDT Circular 19/2019. Third, cross-check the AY and PAN - phishing scams routinely use last year's AY to fool recipients.

If it is a 143(1) intimation and you agree with it, no action is needed; the matter is closed once the refund is credited or the demand paid. If you disagree, you have two clean choices - a rectification under Section 154 (for arithmetic disputes) or a revised return under Section 139(5) (for substantive omissions). If it is a 143(2) notice, treat it as the start of regulated litigation. Maintain a notice register, respect every deadline, and consider engaging a chartered accountant the moment the scrutiny relates to capital gains, foreign assets, or unsecured loans, because additions in these areas are appellate hotspots.

Use the Oquilia income tax calculator to recompute the liability shown on your 143(1) line by line; the old vs new regime calculator to verify regime choice before filing a revised return; and the TDS calculator to reconcile Form 26AS entries that CPC may have disallowed. For capital-gains-driven scrutiny, the capital gains calculator helps reconstruct the cost-indexation working an AO will ask to see.

FAQ

Can a 143(1) intimation be issued after the nine-month limit if my return contains an arithmetic error?

No. The proviso to Section 143(1), substituted by the Finance Act 2021, is a hard outer limit - nine months from the end of the financial year in which the return is furnished. Once that date passes, the return is deemed processed at declared figures and CPC loses jurisdiction. Any subsequent adjustment can only happen through reassessment under Section 147 (subject to its own time limits) or a scrutiny already initiated under Section 143(2) within its three-month window.

What if I receive a 143(2) notice for an issue already addressed in a 143(1) intimation?

The two operate independently. A 143(1) intimation is summary processing and does not bar scrutiny. Respond to the 143(2) on its merits, attach a copy of the 143(1) intimation as part of your reply, and point out the items already accepted by CPC. The AO is not bound by CPC's view but typically uses it as a starting point.

How do I respond to a 143(1) intimation that wrongly reduces my refund?

File an online rectification under Section 154 from the Services - Rectification tab on incometax.gov.in. Choose 'Reprocess the Return' if the issue is a TDS or challan-credit mismatch, or 'Tax Credit Mismatch Correction' for a 26AS reconciliation. CPC must dispose of the rectification within six months from the end of the month of receipt. If unresolved, an appeal lies to the Commissioner (Appeals) under Section 246A.

Will responding to a 143(2) automatically lead to an addition or demand?

No. A 143(3) order can accept the returned income unchanged. The CBDT's 2024 Annual Performance Report records that of the 1.65 lakh cases assessed under faceless scrutiny in FY 2023-24, roughly 26 percent closed at returned income. Quality of documentary response is the decisive factor.

Can I appeal a 143(1) intimation directly to CIT(A) without filing a rectification first?

Yes. Section 246A(1)(a) lists an order under Section 143(1) among appealable orders. File Form 35 within 30 days of service and pay the appeal filing fee (Rs 250 to Rs 1,000 depending on assessed income). The practical route is rectification first - it is faster, costs nothing, and resolves arithmetic disputes without a hearing.

Does a faceless 143(2) notice need a physical hearing?

Not ordinarily. The Faceless Assessment Scheme 2019, codified into Section 144B by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act 2020, conducts proceedings entirely through the e-filing portal. A personal hearing through video conferencing may be requested under Section 144B(6)(viii) and is normally granted before any adverse variation is proposed.

Where can I read the bare text of these provisions?

The Income-tax Act, 1961 is hosted on indiacode.nic.in/handle/123456789/2435 and the consolidated version with current amendments is on incometax.gov.in/iec/foportal/help/individual/return-applicable-1. Always cross-check against the bare Act before acting on third-party summaries - including this one.

For further context, our earlier explainers on Section 194N TDS on cash withdrawals, PAN-Aadhaar linking under Rule 114AAA and the Section 44ADA presumptive scheme for professionals walk through compliance touchpoints that frequently surface in scrutiny questionnaires.