Assessments, Scrutiny & Notice Handling

What is an income-tax assessment?

An assessment is the tax department's examination of your return. Most returns are simply processed by the system, which checks for arithmetical errors and mismatches. Some are selected for scrutiny, where an officer examines them in detail. Older years can also be reopened through reassessment if the department believes income escaped tax.

Almost all of this now happens online and 'faceless' — notices arrive by email and on the income-tax portal, and responses are submitted electronically, without meeting an officer.

The key terms

The notices you're most likely to see:

Processing intimation

Sent after the return is processed, showing any adjustments, refund, or demand. Adjustments are proposed first, with a chance to respond.

Scrutiny notice

Tells you the return has been selected for detailed examination, and must be issued within a set time after the year in which the return was filed.

Faceless assessment

Scrutiny conducted electronically by assessment units, with no physical interface. Personal hearings can be requested by video conference in certain cases.

Reassessment

Reopening a past year if income is believed to have escaped assessment, preceded by a show-cause procedure and subject to time limits.

Defective return notice

Tells you the return is incomplete or inconsistent and must be corrected within a set time.

Penalty

Penalties for under-reporting or misreporting income can apply on top of tax and interest.

Appeal

An assessment order you disagree with can be appealed to the Commissioner (Appeals), and then to the Income Tax Appellate Tribunal.

Why a proper response matters

How you respond often decides the outcome:

Deadlines are strict

Missing a response deadline can lead to an order based only on the information the department has.

Everything is written

In faceless assessment, your written submissions and documents are what the officer relies on.

Additions carry penalties

Income added in assessment can attract penalties of 50% to 200% of the tax on it, as well as interest.

Data-driven selection

Notices are often triggered by mismatches between your return and AIS, GST, or third-party data.

Reassessment reaches back

Past years can be reopened within the time limits, especially where large amounts are involved.

Appeals take time

A good response avoids years of appeals.

Demands can be adjusted

Outstanding demands can be adjusted against refunds for other years.

Who is this for?

If an assessment order has already been passed, see our Appeals and Refund Claims & Rectifications services for the next steps.

Common notices compared

How the main notices differ:

What we'll need from you

The notice

The full notice, with its date, deadline, and questions.

Return and computation

The return for the year and its computation.

Books and documents

Bank statements, invoices, and records supporting the items questioned.

AIS and 26AS

The statements the department relied on.

Portal access

Access to your income-tax portal account.

Previous correspondence

Any earlier notices or responses for the same year.

Fees depend on the notice, the issues raised, and the volume of documentation.

How we handle notices

Responding to a notice usually involves:

1. 1

   Read the notice closely

   We identify exactly what's being asked, the deadline, and the legal basis.

2. 2

   Gather evidence

   Documents supporting each item are collected and organised.

3. 3

   Reconcile

   Figures are reconciled with AIS, 26AS, GST, and books.

4. 4

   Draft the response

   A clear written submission is prepared, point by point, with evidence.

5. 5

   Submit on the portal

   The response is filed online before the deadline, or an adjournment sought where justified.

6. 6

   Follow through

   Further queries are answered, and a hearing requested where appropriate.

After the assessment order

Once the order is passed:

Check the order

Compare the order with your submissions, and check the computation for errors.

Rectification

Apparent mistakes can be corrected through a rectification application.

Appeal

Disputed additions can be appealed to the Commissioner (Appeals) within the time allowed.

Stay of demand

While an appeal is pending, a stay of demand can be requested, usually on paying a part of it.

Penalty proceedings

Penalty proceedings may follow additions, and need separate responses.

Prevent repeats

Fix whatever triggered the notice, like unreconciled AIS items.

Benefits and responsibilities