The June 30 Cut-off: Who Actually Gets a Scrutiny Notice, and What I Tell Clients When They Do
Every June, a particular kind of phone call starts coming in. A client has read a headline about “30 June” and a “tax notice,” and wants to know whether he is about to be raided. So before we get into the law, let me say the calming thing first, the same thing I say on the phone: 30 June is not a deadline for you. You do not have to file anything, pay anything, or do anything on or before that date. It is a deadline for the Department.
That distinction is the whole article, really. But it is worth unpacking properly, because the people who genuinely should pay attention are a small set, and they are not always the ones panicking.
What the 30 June date is
When you file your return, the Assessing Officer does not get an open-ended right to pick it apart years later. For a regular scrutiny assessment, the law gives a window. A notice under Section 143(2) — the formal notice that tells you your return has been selected for detailed scrutiny — must be served within three months from the end of the financial year in which the return was furnished.
Apply that to the returns most people filed last year. A return for AY 2025-26 (the income of FY 2024-25), filed in July 2025, was furnished during FY 2025-26. That financial year ended on 31 March 2026. Three months later is 30 June 2026. So that is the last date on which the Department can issue a 143(2) notice for those returns. Miss it, and the door for regular scrutiny on that return shuts.
This is why the date matters and why it gets misreported. It is an internal administrative cut-off for the Department, dressed up by some headlines as if it were a doomsday for taxpayers. For the honest filer who kept his documents, 1 July is, if anything, a small relief.
A 143(2) notice is not an accusation
I labour this point with clients because the word “scrutiny” sounds like a verdict. It is not. A 143(2) notice means the Officer wants to verify, not that he has concluded. Verification can end three ways: no addition at all, a small adjustment, or a larger demand — entirely depending on the facts and, frankly, on the quality of the reply. I have closed plenty of scrutinies with a clean order. The notice is the start of a conversation, not the end of one.
It also helps to keep the family of notices straight, because clients mix them up:
A 143(1) intimation is the system-generated processing summary — arithmetic, mismatches, the refund or small demand. That is not scrutiny. A 142(1) notice is an inquiry, and can come even before you have filed. 143(2) is the real scrutiny selection. And 148 is reassessment, a different beast altogether, with its own — longer — time limits. When a client forwards me a screenshot in a panic, the first thing I check is which of these we are actually looking at. More often than not it is a 143(1), and the temperature drops immediately.
So who actually gets one?
Selection happens in two broad streams, and it is worth knowing which stream you might fall into.
The larger stream is CASS — Computer-Assisted Scrutiny Selection. This is the data-driven, risk-based net, and it has become considerably sharper. The Department now sees an extraordinary amount: your AIS, your 26AS, SFT reports from banks and registrars, GST data, foreign-remittance trails. Returns get flagged where the numbers do not reconcile. In my experience the recurring triggers are these — and none of them are exotic:
- A real mismatch between the income reflected in AIS / Form 26ASand what the return declares. Interest income quietly left out, a sold mutual fund, an FD that matured — small omissions, big flags.
- GST turnover not matching the turnover in the tax audit report or the ITR. For business clients this is now one of the most common pick-ups, because the two databases talk to each other.
- Deductions that look disproportionate to the income. A modest salary with an outsized 80C-and-housing-loan claim invites a second look.
- High-value transactions sitting in the SFT data — property, cash deposits, credit-card spends — that do not find a matching explanation in the return.
- A property sale recorded with the sub-registrar but no corresponding capital gain in the return.
- Foreign income or foreign assets not disclosed, where the data has arrived through information exchange.
The smaller, separate stream is compulsory scrutiny, which is rule-based rather than risk-based. The CBDT issues annual guidelines listing categories that must be scrutinised regardless of how clean the return looks — survey and search cases, matters flowing from specific intelligence inputs, certain recurring additions, and so on. If your client had a survey on his premises, he is going to get a notice; there is no point pretending otherwise, and the better service is to have the file ready.
The honest summary is the one the news pieces bury at the bottom: the vast majority of taxpayers will never see a 143(2) in their lives. A meticulous filer with reconciled numbers has very little to fear even if selected.
What I do when a notice actually lands
When a genuine 143(2) does arrive — and these days it arrives on the e-filing portal, with an email and an SMS to the registered contact — the drill is unglamorous but it works.
First, read what kind of scrutiny it is. A limited scrutiny notice names the specific issue — say, the capital gain on a property, or a particular deduction. The Officer cannot wander beyond that issue without converting it to complete scrutiny through a defined process. A complete scrutiny opens up the whole return. Knowing which one you are answering shapes everything that follows, and clients who skip this step end up volunteering information nobody asked for.
Second, verify the notice is real — the DIN, the assessment year, the acknowledgement number tying it to the actual return. Then read the response window. It is usually 15 to 30 days. That window is short and it is firm.
Third, assemble the evidence to the point in question — Form 16, 26AS, bank statements, investment proofs, sale deeds, whatever the issue demands — and respond through the faceless mechanism on the portal. The assessment is largely electronic now; you are not, in most cases, walking into an Officer’s room.
And the one rule I will not bend on: do not ignore it. Silence is the single most expensive choice available. Non-response can lead to a best-judgment assessment under Section 144, where the Officer estimates your income without your side of the story — and that is a far worse place to argue from. I would rather file a holding reply and seek time than let the date pass in silence.
What if 30 June comes and goes with no notice?
Then, for that return, regular scrutiny is off the table — a quiet relief most clients never even register. But I am always careful to add the caveat: it does not make the file immortal. If specific information later surfaces — undisclosed income, an asset abroad, a transaction the Department gets wind of — reassessment under Section 148 can still be initiated, on its own conditions and its own, longer limitation. The 30 June cut-off closes one door, not the whole corridor.
And if you spot the mistake first?
This is the part I wish more taxpayers acted on. If, sitting with your own papers, you realise you missed something — that FD interest, a small capital gain — you are not obliged to wait and hope the net misses you. For AY 2025-26 the updated return (ITR-U) under Section 139(8A) window is open, and a voluntary correction (with the additional tax it carries) is almost always a better posture than being caught on a mismatch. Coming clean before the notice changes the entire complexion of the matter.
A note for the year ahead: the new Act is now live
One thing the general-press coverage glosses over, and which matters to us as practitioners: the Income-tax Act, 2025 has been in force since 1 April 2026. So why are we still talking about Section 143(2)?
Because of the saving provisions. Proceedings and returns tied to AY 2026-27 and earlier continue to be governed by the Income-tax Act, 1961, even though the new Act has commenced. The AY 2025-26 returns we have been discussing were filed under the old Act and are assessed under it — which is precisely why the notice you receive this June will still cite Section 143(2), not anything from the new code.
For periods governed by the new Act, the machinery shifts. The scrutiny framework moves into Section 270: the scrutiny notice equivalent of old 143(2) sits at Section 270(8), the three-month limitation that creates the “30 June” effect sits at Section 270(9), and the scrutiny assessment order itself flows from Section 270(10). We will also be living with a vocabulary overlap for a while — officers and orders may keep saying “assessment year” for these saved old-year matters, while “tax year” applies to the newer periods. It pays to read each notice on its facts rather than assume the section number from habit.
The short version
30 June is the Department’s clock, not yours. A 143(2) notice is verification, not a verdict. The people who genuinely need to read it carefully are those with mismatches they already half-suspect — and the cleanest defence, as always, was built last year when the return was filed honestly and the documents were kept.
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The above reflects the position for AY 2025-26 scrutiny under the Income-tax Act, 1961, read with the transition into the Income-tax Act, 2025. It is general guidance and not a substitute for advice on a specific assessment. Section references should be confirmed against the bare Act for the relevant year before relying on them in a reply.
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