Received an Intimation for Faceless Assessment Under Section 144B or Notice u/s 143(2) of the Income Tax Act?? Here’s What It Really Means

Quick Summary

✔ Section 144B notice means your scrutiny assessment will be conducted electronically.

✔ It follows a Section 143(2) scrutiny notice.

✔ All responses must be filed through the Income Tax Portal.

✔ Failure to respond may lead to Best Judgment Assessment under Section 144.

✔ Professional representation can significantly reduce additions and penalties.

Thousands of taxpayers across India are now receiving an official communication from the National Faceless Assessment Centre (NFAC) that reads:

INTIMATION TO ASSESSEE FOR COMPLETION OF ASSESSMENT IN ACCORDANCE WITH PROCEDURE OF SECTION 144B OF THE INCOME TAX ACT

Dear Taxpayer,

This is to intimate that your case for Assessment Year 2025-26 has been selected for the purpose of faceless assessment/re-assessment. The case has been assigned to Assessment Unit for completion of assessment in faceless manner in accordance with the procedure laid down in section 144B of the Income-tax Act, 1961.

The proceedings will be conducted electronically in ‘e-Proceedings’ facility through your account in e-Filing website (www.incometax.gov.in).

You are advised to periodically check your account in e-Filing website and give specific reply to communication/notices issued within specified time. This will enable passing of fair assessment order after due consideration of your reply/explanation. Non-responsiveness may lead to passing of best judgment assessment order and other penal consequences.

Yours faithfully,
National Faceless Assessment Centre
INCOME TAX DEPARTMENT

This is an electronic communication from National Faceless Assessment Centre, which need not be digitally signed for authentication.

If you have received this communication, do not panic — but do not treat it as routine correspondence either. This intimation carries significant legal weight and marks a critical juncture in your tax assessment process.

Read: 

• What Happens After Receiving a Scrutiny Notice Under Section 143(2)? The Full Journey No One Tells You About

• Got a 200% Penalty Order Under Section 270A? There Is Now a Legal Way Out.

What Is This Intimation and How Is It Connected to Section 143(2)?

This intimation under Section 144B is not a standalone notice issued independently. It is sent after a notice under Section 143(2) has already been issued selecting your return for scrutiny. The Section 144B intimation is a procedural assignment communication — it informs you that your case has now been formally assigned to a Faceless Assessment Unit for the actual conduct of proceedings under the faceless assessment scheme.

In simple terms: Section 143(2) selects your return for scrutiny. Section 144B governs how that scrutiny is conducted — entirely online, through the e-Filing portal, with no physical interface with any Assessing Officer. If you have received this intimation, a 143(2) notice is already on record for your PAN. Log in to www.incometax.gov.in immediately and check the e-Proceedings tab.

What Is Section 144B and Faceless Assessment?

Section 144B of the Income Tax Act, 1961 is the legal backbone of the Faceless Assessment Scheme. Under this scheme:

• All scrutiny proceedings are conducted entirely electronically through the income tax portal.
• Cases are assigned to Assessment Units randomly across India — you will have no idea which city or officer is handling your case.
• All notices, queries, draft orders, and final orders are served only through the e-Filing portal, registered email, and SMS.
• Every communication carries a unique Document Identification Number (DIN) for traceability.
• Personal hearings are available only upon specific request and are not granted as a matter of right.

What Should You Do Immediately?

1. Log in to incometax.gov.in and go to e-Proceedings under ‘Pending Actions’.
2. Check for any unanswered notices — particularly Section 143(2) or Section 142(1) — and note the exact response deadline.
3. Do not assume you have plenty of time. Faceless proceedings move quickly and deadlines are strict.
4. Engage a Chartered Accountant immediately.The consequences of an incorrect, incomplete, or late response at this stage can escalate through every subsequent stage of assessment.

⚠ Important: Non-responsiveness to notices in e-Proceedings can lead to a Best Judgment Assessment under Section 144, where the Assessing Officer determines your tax liability without your input — invariably resulting in inflated demands, interest, and penalties.

Common Reasons for Selection for Scrutiny

• High refund claims
• AIS mismatch
• Form 26AS mismatch
• Large cash deposits
• Property transactions
• Share trading losses
• F&O losses
• High deductions under Chapter VI-A
• Foreign asset disclosures
• Capital gains mismatch

Frequently Asked Questions (FAQs): Scrutiny Notice & Faceless Assessment

Q1. I received a notice under Section 143(2). Does this mean I have done something wrong?

Not necessarily. A notice under Section 143(2) is a verification exercise, not an accusation. Returns are selected for scrutiny through CASS (Computer Assisted Scrutiny Selection) and AI-based systems like Project Insight based on statistical parameters — a mismatch with Form 26AS/AIS, a high refund claim, unusual deduction patterns, or PAN-linked high-value transactions not disclosed in the return. That said, once selected, you must respond professionally and on time.

Q2. What is the difference between the Section 144B intimation and a Section 143(2) notice?

The Section 143(2) notice is the primary notice that formally informs you your return has been selected for scrutiny. The Section 144B intimation is a follow-up procedural communication — it tells you that your case has been assigned to a Faceless Assessment Unit and that all proceedings will be conducted through the e-Filing portal under the Faceless Assessment Scheme. The two go hand in hand: 143(2) triggers the scrutiny, 144B governs how it is conducted. If you have received the 144B intimation, your 143(2) notice is already on record.

Q3. Do I need to submit documents when responding to a 143(2) notice?

No, not at this stage. The Section 143(2) notice is essentially an initiation notice — your response is a formal acknowledgment that you are participating in the process. The actual request for documents, bank statements, and evidence comes through a subsequent notice under Section 142(1). However, you should start organising your records from the moment you receive the 143(2) notice, and engage a CA immediately, because the 142(1) notice can follow quickly.

Q4. What is the National Faceless Assessment Centre (NFAC)?

The NFAC is the centralised body set up by the Income Tax Department to conduct all scrutiny assessments under the Faceless Assessment Scheme (Section 144B). It allocates cases to Assessment Units across India on a random, anonymous basis. The taxpayer never interacts with a specific Assessing Officer — all communication is through the e-Filing portal. Communications from NFAC are legally valid even without a digital signature.

Q5. What happens if I do not respond to notices in e-Proceedings?

Persistent non-response leads to a Best Judgment Assessment under Section 144. The Assessing Officer will determine your income and tax liability based solely on the data available to the department — Form 26AS, AIS, TIS, third-party data from banks, registrars, and mutual funds — without any input or explanation from you. This almost always results in significantly inflated tax demands. Subsequently, penalty proceedings under Section 270A and recovery proceedings including bank attachment can follow automatically.

Q6. What is the penalty for claiming a deduction I was not entitled to? 

The penalty framework under Section 270A of the Income Tax Act, 1961 provides:

• 50% of tax on under-reported income — applies when the assessed income exceeds the returned income due to an unsupported or disallowed deduction.
• 200% of tax on misreported income — applies when the claim involved fabricated or false documents, non-disclosure of income, or deliberate concealment.

The critical change brought in by Finance Act 2026 is this: penalty under Section 270A can now be levied through the assessment order itself — no separate penalty order or separate penalty notice is required. This means the financial impact hits you simultaneously with the final assessment order, leaving no buffer period. Earlier, a separate show cause notice for penalty would follow the assessment order, giving you time to respond. That procedural protection is now significantly reduced.(effective from 1-4-2027, not applicable for notice received for AY 2026-27)

Under the new Income Tax Act, 2025 (effective from 1-4-2027), the immunity route shifts from Section 270AA with Form 68 to Section 440 with Form 161. If you qualify for immunity — i.e., you paid the tax and interest and there is no case of misreporting — you can apply for immunity from penalty and prosecution. A Chartered Accountant is essential to evaluate this option and act within the statutory window.

Q7. Can I attend a personal hearing in a faceless assessment?

Faceless assessments are designed to be fully electronic. However, personal hearings through video conferencing are available on specific request — the taxpayer must formally apply through the e-Filing portal. These are not granted automatically and are subject to the discretion of the Assessment Unit. Physical hearings before an Assessing Officer are not permitted under the faceless scheme.

Q8. What is a Draft Assessment Order and how much time do I have to respond?

After reviewing your responses to the 142(1) notice, the Faceless Assessment Unit may issue a Draft Assessment Order (also called a Show Cause Notice) proposing additions or disallowances to your income, recomputed tax demand, and interest under Sections 234A/B/C. You are typically given 3 to 7 days to file your written objections. This is the most consequential stage of the entire assessment — a strong, point-wise rebuttal supported by documents, legal precedents, and CBDT circulars can result in the proposed additions being dropped or significantly reduced. Failure to respond results in the draft being finalised as the binding Final Assessment Order under Section 143(3).

Q9. By when must the scrutiny assessment for AY 2025-26 be completed?

Under Section 153 of the Income Tax Act, the time limit for completing a scrutiny assessment under Section 143(3) is 12 months from the end of the Assessment Year in which the income is assessable. For AY 2025-26, this means the final assessment order must ordinarily be passed by 31 March 2027. This extended timeline does not mean you can wait passively — each individual notice within the proceedings carries its own tight deadline (often 15 days or less), and missing any one of them can have serious consequences for the entire case.

Q10. What are my options if I cannot pay the tax demand after scrutiny?

You have three main options: (a) pay the full demand within 30 days of the Section 156 demand notice to stop interest under Section 220(2) from accruing; (b) file an appeal before the Commissioner of Income Tax (Appeals) within 30 days and separately apply for stay of demand through the e-Filing portal — note that filing an appeal does not automatically stay recovery; or (c) apply for payment by instalments under Section 220(3), supported by a stay application and documentary evidence of financial hardship. Do not ignore the demand — recovery proceedings including bank account attachment and salary garnishee orders can follow automatically after the 30-day window closes.

Q11. Why is it essential to hire a Chartered Accountant for a scrutiny case — and not just any CA?

A scrutiny assessment involves far more than uploading a few documents. It requires:

• Legal interpretation of the Income Tax Act and CBDT circulars
• Careful correlation between your ITR, Form 26AS, AIS, TIS, Form 16, and bank statements
• Drafting structured, legally defensible written responses at each stage
• Knowledge of recent case laws and judicial precedents to contest unjust additions
• Timely filing of each response — missed deadlines in faceless proceedings are extremely difficult to undo
• Strategic evaluation of whether to apply for immunity under Section 440/Form 161 (IT Act, 2025) or contest the additions through appeal

A CA experienced specifically in scrutiny assessments and tax dispute resolution — not just return filing — makes a decisive difference to the outcome of your case.

Quick Answers to Common Questions About Section 144B Notices

What is a Section 144B Notice?

A Section 144B notice is a communication from the Income Tax Department informing you that your scrutiny assessment will be conducted under the Faceless Assessment Scheme through the Income Tax Portal. All proceedings take place electronically without any physical interaction with the Assessing Officer.

Is a Section 144B Notice Serious?

Yes. While it is not a penalty notice, it indicates that your income tax return is under scrutiny. Failure to respond appropriately can result in additional tax demands, penalties, and best judgment assessment.

Why Did I Receive a Section 144B Notice?

A Section 144B notice is generally issued after your return has been selected for scrutiny under Section 143(2). Common reasons include mismatches in AIS, Form 26AS, high-value transactions, unusual deductions, or large refund claims.

How Do I Respond to a Section 144B Notice?

Log in to your Income Tax Portal account, review the pending proceedings, understand the information requested, and submit a complete response within the prescribed deadline. Professional assistance is advisable for scrutiny proceedings.

What Happens If I Ignore a Scrutiny Notice?

Ignoring scrutiny notices may lead to a Best Judgment Assessment under Section 144, where the department determines your tax liability without considering your explanation. This often results in higher tax demands and penalties.

What Is Faceless Assessment Under the Income Tax Act?

Faceless Assessment is a system under Section 144B where scrutiny assessments are conducted electronically through the Income Tax Portal. The taxpayer and assessing officer do not meet physically during the proceedings.

What Is NFAC?

NFAC (National Faceless Assessment Centre) is the central authority that administers faceless assessments in India. It coordinates communication between taxpayers and assessment units through the Income Tax Portal.

What Is the Difference Between Section 143(2) and Section 144B?

Section 143(2) is the notice that selects your return for scrutiny, while Section 144B prescribes the procedure for conducting that scrutiny through the faceless assessment framework. In simple terms, Section 143(2) initiates scrutiny and Section 144B governs the process.

Can I Get a Personal Hearing in a Faceless Assessment?

Yes. A personal hearing through video conferencing may be requested in appropriate cases. However, such hearings are not automatic and are granted subject to the provisions of Section 144B.

What Happens After Receiving a Scrutiny Notice?

After receiving a scrutiny notice, the Income Tax Department may issue further notices under Section 142(1) seeking supporting documents and explanations. The proceedings ultimately culminate in an assessment order determining your final tax liability.

Do I Need a Chartered Accountant for a Section 144B Notice?

While not legally mandatory, professional representation can significantly improve the quality of responses and reduce the risk of additions, penalties, and prolonged litigation. Complex scrutiny matters are best handled by a CA experienced in assessment proceedings.

What Documents Are Commonly Required During Scrutiny Assessment?

The department may request bank statements, Form 16, Form 26AS, AIS, books of account, property documents, investment statements, loan records, and evidence supporting deductions or exemptions claimed in the return.

Quick Summary

✔ Section 144B notice means your scrutiny assessment will be conducted electronically.

✔ It follows a Section 143(2) scrutiny notice.

✔ All responses must be filed through the Income Tax Portal.

✔ Failure to respond may lead to Best Judgment Assessment under Section 144.

✔ Professional representation can significantly reduce additions and penalties.

Existing Article

Received Scrutiny Notice Under Section 143(2)?

Why Choose Balakrishna & Co. for Your Scrutiny Assessment?

Faceless Assessment and Scrutiny Notice Assistance in Bangalore

Receiving a scrutiny notice or a faceless assessment intimation is not the time to search for a CA who primarily files returns. You need a firm with deep, hands-on experience in tax dispute resolution, assessment proceedings, and penalty defense. That is precisely what Balakrishna & Co. brings to every client engagement.

37+ Years of Complex Tax Practice

Balakrishna & Co., Chartered Accountants, Bangalore, has over 37 years of experience in navigating complex income tax matters including scrutiny assessments, penalty proceedings under Section 270A, appeals before CIT(A) and ITAT, and cross-border tax advisory. Our team does not learn on your case — we bring proven expertise to every stage of your assessment.

Our firm has represented taxpayers in scrutiny assessments involving salary income, capital gains, business income, F&O transactions, foreign assets disclosures, NRI taxation matters, and high-value property transactions.

What We Do for Scrutiny Clients

• Notice triage: We review your 143(2), 142(1), and 144B communications and assess the exact nature and scope of the scrutiny — limited or complete, and what the department is really looking for.
• Document preparation: We identify every document required, reconcile it against your ITR, Form 26AS, and AIS, and prepare a complete, indexed response package.
• Legal reply drafting: Our responses to 142(1) notices and Draft Assessment Orders are structured, legally sound, and supported by relevant case laws and CBDT circulars — not generic submissions.
• Penalty strategy: With the 2026 change making penalty simultaneous with the assessment order, we assess from the very first notice whether your case qualifies for immunity under Section 440/Form 161 and advise accordingly.
• Appeals and representation: If the final order is unfavourable, we handle the full appeal process before CIT(A) and ITAT, including stay of demand applications.

Serving Clients Across India — Fully Online

Because faceless assessments are entirely electronic, our services are available to clients anywhere in India. All documents are exchanged digitally, responses are filed through the e-Filing portal, and consultation is available over call, email, or video. You do not need to visit our Bangalore office to benefit from our expertise.

Have you received a scrutiny notice or faceless assessment intimation?
Contact us today for a confidential assessment of your case. We will review your notices, assess your exposure, and advise you on the most effective course of action — before deadlines become a problem.

Need Help with Scrutiny Proceedings?

At Balakrishna & Co. Chartered Accountants, we have over 37 years of experience in handling scrutiny assessments, faceless assessment proceedings, tax disputes, penalty notices, and appeals before CIT(A) and ITAT. We assist clients across India at every stage of the assessment process.

Phone: +91 86182 59712
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Website: www.balakrishnaandco.com
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