The Intimation under Section 143(1)

Most people who file an income-tax return never meet an Assessing Officer. What they receive instead is an e-mail from the Centralised Processing Centre with a document headed “Intimation under section 143(1)”, and a table in which their own figures sit beside the department’s. Where the two columns agree, nothing more happens. Where they differ, the intimation may raise a demand or cut a refund. The reader’s difficulty is knowing what the processing could lawfully change, whether he was entitled to be asked first, and what the intimation is (and is not) in law.

Which Act governs which years

The Income-tax Act, 2025 replaced the Income-tax Act, 1961 from 1 April 2026. Under section 536(2)© of the 2025 Act, the 1961 Act continues to apply to any proceeding, including one begun on or after 1 April 2026, “in respect of any tax year beginning before the 1st April, 2026”. Processing is such a proceeding. So:

• returns for assessment year 2026-27 (financial year 2025-26) and every earlier year are processed under section 143(1) of the 1961 Act;
• returns for tax year 2026-27 onwards, which fall due from 2027, will be processed under section 270(1) of the 2025 Act.

Point	1961 Act	2025 Act
Processing and intimation	s.143(1)	s.270(1)
Prior communication, 30 days	first and second provisos to s.143(1)(a)	s.270(2)
Time limit for the intimation	second proviso to s.143(1)	s.270(4)
Meaning of “incorrect claim apparent”	Explanation (a) to s.143(1)	s.270(5)(a)
Rectification of the intimation	s.154(1)(b)	s.287(1)(b)

The wording of the two provisions is close to identical. The differences are noted below.

What the processing may change, and what it may not

Section 143(1)(a) permits only listed adjustments. Under the 1961 Act, as amended by the Finance Act, 2025, they are:

1. any arithmetical error in the return;
2. an incorrect claim, “if such incorrect claim is apparent from any information in the return”;
3. any inconsistency with the return of a preceding previous year, of a kind prescribed (clause (iia), inserted by the Finance Act, 2025 with effect from 1 April 2025);
4. disallowance of a loss where the return for the year of the loss was filed after the due date under section 139(1);
5. disallowance of expenditure, or an increase in income, indicated in the audit report but not taken into account in the return;
6. disallowance of a deduction under section 10AA or the Chapter VI-A “C” deductions where the return was filed after the due date;
7. addition of income appearing in Form 26AS, 16A or 16 but not included in the return. The third proviso switches this item off for returns for assessment year 2018-19 onwards.

“Incorrect claim apparent from any information in the return” has a closed definition. It covers only an entry inconsistent with another entry in the same return, an entry for which the information the Act requires to substantiate it has not been furnished, and a deduction exceeding a statutory limit expressed as an amount, percentage, ratio or fraction (Explanation (a)).

The list is the whole of the power. A difference of interpretation, a disallowance needing evidence, or an item outside the list is a matter for scrutiny, not processing.

The 2025 Act’s section 270(1)(a) carries the same six heads, renumbered (i) to (vi), with the Chapter VIII-C deduction in place of Chapter VI-A. The Finance Act, 2026 deleted the words “under section 144 or” from clause (vi), so that clause now refers only to Chapter VIII-C deductions. There is no Form 26AS item in the 2025 Act.

The prior communication and the 30 days

No adjustment can be made “unless an intimation is given to the assessee of such adjustments either in writing or in electronic mode” (first proviso to section 143(1)(a)). The response, if any, “shall be considered”, and only if none is received “within thirty days of the issue of such intimation” may the adjustment be made without one (second proviso). Section 270(2) of the 2025 Act says the same, calling the first step a “communication”. This avoids the 1961 Act’s double use of “intimation”.

Three points follow from the words:

• The 30 days run from issue, not receipt.
• The proposal must come before the adjustment. A final intimation that makes an adjustment never proposed is open to correction under section 154.
• A response does not bind the CPC to accept it. It binds the CPC to consider it.

Time limits

• For the intimation: none can be sent “after the expiry of nine months from the end of the financial year in which the return is made” (second proviso to section 143(1); section 270(4)). A return filed in July 2025 must therefore be processed by 31 December 2026.
• For a loss return: an intimation must also issue where a declared loss is adjusted even though no tax or refund results (first proviso to section 143(1); section 270(3)).
• Deemed intimation: where no sum is payable or refundable and no adjustment is made, the acknowledgement of the return is deemed to be the intimation (Explanation (b); section 270(5)(b)).

What the intimation is in law

The Supreme Court’s decision in Assistant Commissioner of Income Tax v. Rajesh Jhaveri Stock Brokers Pvt. Ltd. (2007) 291 ITR 500 (SC), decided on 23 May 2007, settles its character. The company had filed a return for assessment year 2001-02 declaring a loss of about Rs 2.71 crore. The return was processed under section 143(1), and the loss was accepted. A revenue audit objection then questioned a bad-debt claim of about Rs 12.86 crore, and the Assessing Officer issued a notice under section 148. The Gujarat High Court quashed the notice. The Supreme Court reversed it, holding that “the intimation under section 143(1)(a) cannot be treated to be an order of assessment”. Since there is no assessment, there is no “change of opinion” bar to reopening.

The reasoning still holds for the present section 143(1). It explains why an intimation that accepts a return protects nothing. Scrutiny under section 143(2) remains open within its own time limit, and reassessment within its own.

What to have ready before responding to a proposed adjustment

• The return as filed: the acknowledgement and the full return, downloaded from the filer’s account on the portal.
• The communication itself: downloaded from the portal, with each variance read line by line.
• Form 26AS, AIS and TIS: from the portal. Many proposals start from a mismatch with these. See the guide on reconciling AIS, TIS and Form 26AS.
• The tax audit report, where one was filed. This applies where the variance is under the “audit report” head.
• The previous year’s return, where the variance is an inconsistency under clause (iia).
• Challans for advance tax and self-assessment tax, if credit has been short-given.

Responding on the portal

The e-filing portal’s user manual for e-Proceedings describes the steps:

1. Log in and go to Pending Actions > e-Proceedings.
2. Choose the communication listed as “Prima Facie Adjustment u/s 143(1)(a)”.
3. Download the notice.
4. Click Submit Response. The portal lists each variance found by CPC.
5. Open each variance, click Provide Response, and choose Agree or Disagree.
6. Save each response and go back.
7. After responding to every variance, tick the declaration and submit.

The portal then shows a Transaction ID and sends a confirmation e-mail. The manual records that responses cannot be edited once submitted, and that the Submit button is disabled for CPC notices once the response date has passed.

No digital signature or EVC step is described for this response. Logging into the registered account authenticates it.

After the intimation is issued

• Demand: an intimation showing a sum payable is deemed to be a notice of demand under section 156 (section 289 in the 2025 Act). Payment falls due within 30 days under section 220. Interest at 1 per cent a month runs after that. See Responding to an Outstanding Demand.
• Refund: any refund determined is granted under section 143(1)(e), subject to set-off under section 245. See Income-Tax Refunds.
• Correction: mistakes apparent from the record in the intimation are corrected under section 154(1)(b). See Rectification of Mistakes.
• Appeal: an intimation under section 143(1) is appealable to the Commissioner (Appeals) under section 246A(1)(a) “where the assessee … objects to the making of adjustments”. For 2025 Act years, the appeal lies under section 357.
• Revised return: a revised return under section 139(5) remains possible within its own time limit. See Belated and Revised Returns.

Summary

1. Check which Act applies. For assessment year 2026-27 and earlier it is section 143(1) of the 1961 Act. For tax year 2026-27 onwards it is section 270(1) of the 2025 Act.
2. Read each proposed variance against the closed list of permitted adjustments and the definition of “incorrect claim apparent”.
3. Respond on e-Proceedings within 30 days of the communication’s issue, variance by variance, with the supporting documents.
4. Check that the final intimation makes only adjustments that were proposed, and that it was sent within nine months from the end of the financial year in which the return was filed.
5. Pay or contest any demand; follow any refund; use rectification, appeal or a revised return as the facts require.

The next guide in this set covers defective return notices under section 139(9).