An intimation under Section 143(1) of the Income Tax Act, 1961 is one of the most common communications that taxpayers and their CAs deal with. Despite being called a "notice", a 143(1) intimation is in most cases an automated processing communication — not a manual scrutiny. Understanding the difference, knowing when to respond, and knowing how to respond correctly saves significant time and avoids unnecessary tax demands.
This guide explains what a 143(1) intimation means, the situations that require a formal reply, the correct format for that reply, and what happens after you respond.
What is Section 143(1)?
Section 143(1) of the Income Tax Act provides for preliminary processing of income tax returns by the Centralised Processing Centre (CPC) in Bengaluru. The CPC processes every return filed and may make arithmetic corrections, disallow claims that are not supported by TDS data, or apply other adjustments before determining whether a refund is due or tax is payable.
After processing, the CPC sends an intimation under Section 143(1) which shows:
- The income declared in the return
- Adjustments made by the CPC during processing
- Resulting demand or refund
A 143(1) intimation is not a scrutiny notice. It does not mean your return has been selected for detailed examination. It is an automated processing communication.
Types of 143(1) outcomes
1. No demand, no refund The CPC agrees with the return as filed. No action is needed.
2. Refund intimation The CPC determines a refund is due. Verify the bank account details and ensure they are pre-validated on the income tax portal. No formal reply is needed.
3. Demand intimation The CPC has raised a demand — meaning it has computed tax higher than what was paid. This requires careful review and potentially a formal response.
4. Refund reduced The CPC has agreed with the return but reduced the refund amount due to an adjustment. Review the adjustment and decide whether to accept or contest it.
Common adjustments in 143(1) intimations
The CPC makes adjustments under Section 143(1)(a). Common adjustments include:
TDS mismatch: The TDS claimed in the return does not match what appears in Form 26AS or AIS/TIS. This is the most frequent cause of 143(1) demands.
Incorrect arithmetic: The CPC has recomputed tax based on its own arithmetic, which may differ from the return.
Disallowance of deductions: A deduction claimed under Chapter VI-A (80C, 80D, etc.) has been disallowed because the declaration was not supported or exceeded the prescribed limit.
Carry forward of losses: The CPC may restrict carry-forward of losses not returned within the due date under Section 139(1).
Incorrect tax rate applied: Particularly relevant for special rate incomes (LTCG, STCG, etc.) or for non-resident taxpayers.
When must you reply?
You are not always required to file a formal reply to a 143(1) intimation. Here is the decision framework:
No reply needed:
- The intimation shows no demand and no adjustments
- The intimation shows a refund which you agree with
Action needed (not a formal reply):
- Refund not received — check bank account pre-validation on the portal
- Demand raised but you agree with it — pay the demand within 30 days
Formal reply required:
- Demand raised but you disagree with the adjustment
- Refund reduced and you believe the reduction is incorrect
- TDS mismatch that you want to rectify
Options when you disagree with a 143(1) demand
Option 1: Rectification under Section 154 If the demand is due to a mistake apparent from the record — most commonly a TDS mismatch — file a rectification application on the income tax portal. This is the fastest route. The CPC processes rectification requests within a few weeks.
Option 2: File a revised return If the return itself contained an error and the due date has not passed, file a revised return under Section 139(5).
Option 3: Respond to the demand notice Log in to the income tax portal, go to "Pending Actions > Response to Outstanding Demand" and file your response with supporting documents.
Option 4: Appeal If you have filed a rectification and the CPC still upholds the demand incorrectly, you may appeal to the Commissioner of Income Tax (Appeals) under Section 246A. This should be a last resort for 143(1) matters.
Format for a formal written reply to 143(1)
While most responses to 143(1) are filed online through the income tax portal, there are situations where a CA needs to prepare a formal written reply — for client files, for submission with supporting documents, or for representation before the Assessing Officer.
The standard format is:
[CA Firm Name] [FRN] | [Address] | [Phone] | [Email]
Date: [DD Month YYYY]
To, The Income Tax Officer / DCIT / ACIT, Circle/Ward: [Circle and Ward number], [City]
Sub: Reply to Intimation under Section 143(1) of the Income Tax Act, 1961 In the matter of: [Assessee Name] | PAN: [XXXXXXXXXX] | Assessment Year: [AY 20XX-XX]
Reference: Intimation dated [date] | Demand of ₹[amount]
Respected Sir/Madam,
We, [CA Firm Name], Chartered Accountants, are the authorised representatives of [Assessee Name] (PAN: XXXXXXXXXX) for Assessment Year [AY]. We hereby submit our response to the intimation dated [date] issued under Section 143(1) raising a demand of ₹[amount].
Grounds of objection:
-
[Ground 1 — e.g., TDS mismatch: The intimation disallows TDS of ₹X credited to our client under Form 16A issued by [Deductor]. The TDS is duly reflected in Form 26AS / AIS. A copy of Form 26AS and Form 16A is enclosed herewith.]
-
[Ground 2 — e.g., Deduction disallowance: The intimation disallows deduction of ₹X claimed under Section 80C. Supporting investment proofs, including LIC premium receipt bearing policy no. XXXXXX, are enclosed.]
Prayer:
In view of the above, we respectfully request that: (a) The demand of ₹[amount] be deleted; and (b) A rectified intimation be issued in accordance with the correct computation.
We are available to provide any further information or documents as required.
Yours faithfully,
[Authorised Signatory] [Name] [Designation: Partner / Proprietor] [Firm Name] ICAI Membership No.: [XXXXXX] ICAI FRN: [XXXXXX]
Enclosures:
- Copy of ITR-V / Acknowledgement
- Form 26AS / AIS extract (relevant pages)
- Form 16A from relevant deductors
- Investment proof documents (as applicable)
- Copy of intimation under Section 143(1)
Key points when drafting the reply
Be specific about the adjustment you are contesting. Identify the specific line in the intimation that you dispute. Vague replies like "the demand is incorrect" are not helpful.
Attach all supporting documents. For TDS mismatches, always attach the relevant Form 16 / 16A / 26AS extract. For deduction disallowances, attach the investment proofs. Unsupported replies are frequently rejected.
Cite the correct section. If you are filing a rectification, cite Section 154. If you are responding to a demand notice on the portal, use the online response functionality and do not confuse it with an offline letter.
Authorisation. Ensure a valid Form 2848 (authority letter) or the CA's existing authorisation on the income tax portal is in place before representing.
Time limit. You have 30 days from the date of the demand to pay or respond. Do not miss this deadline.
What happens after you file a rectification?
- The CPC processes the rectification application, typically within 15–45 days.
- If accepted, a revised intimation is issued with the corrected demand or refund.
- If rejected, the CPC sends an order refusing the rectification with reasons.
- If rejected and you believe the refusal is incorrect, you may appeal under Section 246A.
Using CADocs for 143(1) notice replies
CADocs provides a ready-to-use notice reply template pre-formatted with the correct structure, section citations, standard grounds, and enclosure list. You fill in the client-specific details, download, and print on your firm letterhead — or download the complete document directly.
The template handles the most common grounds — TDS mismatch, Chapter VI-A disallowances, and arithmetic errors — with placeholder text that you replace with the actual facts. Start with the template →
Summary
- Section 143(1) is an automated processing intimation, not a scrutiny notice.
- Not every 143(1) requires a formal reply — review the outcome first.
- TDS mismatches are the most common cause of 143(1) demands.
- The fastest remedy for most 143(1) demands is a rectification under Section 154 filed on the income tax portal.
- For formal written replies, follow the standard format with correct section citations and all supporting documents attached.
- Respond within 30 days of the demand date.