Scrutiny Notices for AY 24-25

CBDT has started MASS dispatch of Scrutiny Notices for AY 2024–25.

Here’s what to do if YOU receive one, based on cases we have personally seen in the past few days.

1️⃣ What is a Scrutiny Notice?

It’s a formal notice issued u/s 143(2) of the Income Tax Act.

It means the department wants to verify specific information in your ITR and not that you’ve done anything illegal.
2️⃣ Who’s Getting Picked This Time?

Surprisingly, many individuals are under the radar - especially those who:

🔸 Reported only salary income inspite of multiple incomes in AIS
🔸 Ignored mutual fund capital gains
🔸 Missed showing dividend income
🔸 Claimed inflated deductions but didn’t declare related proofs to employers.
3️⃣ Real Examples (Just This Week):

These 3 scrutiny notices came to my notice in my office in last week:

📌 Case 1 – ₹6L mutual fund redemptions shown in AIS, but ITR only declared salary!
📌 Case 2 – ₹1.9L VDA transactions missed; 80D & 80G claimed.
📌 Case 3 – ITR-1 filed despite holding RSUs in the US (foreign assets).

All 3 were filed intentionally to hide taxes. All received notices under 143(2).
4️⃣ Where to Check If You’ve Got One?

📧 Email from: donotreply@incometax.gov.in
💻 Portal:
Go to: e-Proceedings → Assessment → View Notices
✅ Download & read the PDF carefully
📅 Note the reply deadline - usually 15 to 30 days.incometax.gov.in
5️⃣ What To Do Immediately ?

✔️ Get your Form 26AS + AIS + TIS
✔️ Match them with your ITR line-by-line
✔️ Collect all supporting docs:
•MF capital gains statements
•Salary + perquisite breakup
•Bank account proof of dividends
•Donation receipts, etc.
6️⃣ Filing a Response – Be Structured

Go to e-Proceedings → Assessment → Submit Response

Upload clear, labelled PDFs and no zip files

Include a short cover note summarising your position and ITR submissions.
7️⃣ Should You Take Professional Help?

If your ITR has:
🔸 Capital gains
🔸 RSUs/foreign holdings
🔸 Business income
🔸 Refund mismatch or large deductions

Don’t experiment. Consult an expert.
A wrong reply may invite penalty, re-assessment, or delay closure.
8️⃣ Ignoring It? Think Again.

If no reply is filed in time, the AO may pass a Best Judgment Assessment u/s 144.

That means:
❌ Refund denied
❌ Deductions disallowed
✅ Tax computed as per their assumptions
🚨 Possibly highest tax slab
9️⃣ This Is Manageable - If You Act

Have seen scrutiny cases closed peacefully when:

✔️ Documents were in order
✔️ Timely & complete response was filed
✔️ Communication was polite and logical

It is just a legal review process. Treat it that way.
🔟 Avoiding Scrutiny in Future

📌 Match AIS & 26AS before filing
📌 Don’t ignore dividends, MF redemptions, or stock gains
📌 File ITR-2/3 if you have multiple income heads or capital gains
📌 Disclose RSUs & foreign assets in Schedule FA

⚠️ And remember that once you receive a scrutiny notice, you cannot file an Updated Return u/s 139(8A) to fix mistakes. That door is closed.
✅ Final Advice

Scrutiny doesn’t mean you’re in trouble but mishandling it surely can put you there.

It’s mostly about mismatches, not fraud.

But once 143(2) is issued:
➡️ No updated return
➡️ Everything must now be supported and explained
➡️ Be honest, be proactive, and seek help if needed more