Your ITR vs Your Data: Why Many Taxpayers Got 143(2) Scrutiny Notices This Year

 

If your email inbox suddenly looks more active than your bank account, don’t worry-you’re not alone. The country is experiencing a full-fledged Section 143(2) Storm for AY 2024-25. Across India, taxpayers are asking the same question: “Why me?” And interestingly, even the honest ones are asking this with equal sincerity. A scrutiny notice doesn’t always mean something is wrong. Sometimes, it only means your return is too interesting for the system to ignore.

Now, why suddenly this year has become the “Storm Year” for 143(2)? Let’s decode the reasons-based on data trends, AI behavior, taxpayer patterns, and good old logic.

1.  AI Has Become Smarter Than the Taxpayer (Unfortunately):
This is the first year where the new AI-based risk assessment module is in full force. The system is reading your AIS, TIS, Form 26AS, loan details from tax audit reports, bank statement trails, GST turnover, property registration data, brokerage reports, even FD renewals. If your return says something but your financial ecosystem says something else, the algorithm quietly marks you “High Interest.” The message is clear: data rarely lies, and it never forgets.

2.  The Great AIS–ITR Mismatch Wave:
AIS has now become the central trigger for scrutiny. Many taxpayers treated AIS as optional reading material, but the system takes it very seriously. Typical mismatches include:
• Foreign travel of ₹3.5 lakh vs income of only ₹3 lakh (a lifestyle–income mismatch).
• Share trading reflected in AIS but no capital gains in ITR.
• Heavy deposits but “Self-employed with zero revenue.”
Once these inconsistencies cross certain risk scores, scrutiny becomes almost automatic. Saying “AIS galat hai” doesn’t work unless corrected on the portal.

3.  High-Value Transactions Are Now Fully Visible:
Cash deposits, credit card bills, property purchases, and even gold transactions are now reported by multiple agencies. The SFT system acts like the country’s most efficient detective. If your declared income and your spending habits live in different time zones, the system notices. That polite phrase – “lifestyle vs income mismatch”-is simply a softer way of saying, “Sir, income kam hai par enjoyment zyada hai.”

4.  Refund Claims Under the Microscope:
Refunds always attract extra attention. But with the rise of “refund consultants” promising magical refunds, scrutiny has intensified. AI now flags patterns that don’t make sense: salary earners suddenly making political donations, traders showing sky-high expenses like commission, interest, depreciation, which apparently looks excessive, and so on. If your refund is too large or unusual for your income level, expect a gentle digital knock.

5.  Business Turnover Mismatch with GST:
For businesses and professionals, GST vs ITR mismatch is the year’s biggest trigger. Even a 10–15% gap is enough. Cases where GST returns show higher sales but ITR shows lower turnover-and vice versa-get flagged instantly. Exporters and e-commerce sellers are especially monitored because their data flows from multiple systems, all of which must align.

6.  Property Transactions Are More Transparent Than Ever:
Property deals now sit in a single data gri-circle rates, stamp duty values, cash transactions, PAN of parties. Common triggers include:
•  Selling below stamp duty value.
•  Cash components in sale deeds.
•  Capital gains not tallying with AIS.
High cost-of-improvement claims also invite questions-not because proof is needed while filing, but because it is expected during scrutiny. The system doesn’t judge your property decisions; it only wants your paperwork ready.

7.  Taxpayers with Sudden Income Changes:
This year, many scrutiny cases involve unusual income fluctuations:
•  Salary earners suddenly showing investment income.
•  Consultants with a 60% drop in receipts.
•  Traders shifting between capital gains and business income every year.
The system prefers stability. When numbers behave like roller-coasters, scrutiny follows.

8.  High-Risk Sectors under the Microscope:
Faceless assessment is the norm, but complex cases still require deeper examination. Industries like jewellery, real estate, co-operative societies, banks, and scrap trading businesses were flagged as high-risk in recent surveys. Belonging to these sectors naturally increases the probability of scrutiny.

9.  Old Risk Scores Catching Up:
Every taxpayer now carries a dynamic risk score. Even if you escaped scrutiny earlier, your cumulative history can trigger it this year. For example:
•  Past mismatch + present refund + big transactions;
•  Earlier non-response + AIS mismatch + cash deposits;
The system doesn’t chase people-it chases patterns.

10.  Salary Class Not Spared:
Salaried taxpayers often assume Form 16 is a protective shield. Not this year. Notices are being issued due to:
•  Late correction of employer TDS returns.
•  HRA claims followed by owner’s denial of rent receipts in AIS.
•  AIS showing share or crypto trades.
Many don’t realise their AIS captures co-operative bank interest, mutual fund purchases, and other small transactions as well. The system does.

Why Even the Most Straightforward Returns Got Picked This Year:
A surprising trend this year is scrutiny of extremely simple returns-basic salary cases, pensioners, and small businesses. This isn’t because they did anything wrong. It’s because AI is experimenting and learning. The system is “training” itself by picking varied cases to understand behavioural patterns. Think of it as the machine testing the waters-and unfortunately, taxpayers became the sample size.

So What Should Taxpayers Do Now?
• Don’t panic. A notice is not a tax demand.
• Check the exact reason mentioned-it’s often clear from the notices.
• Collect supporting documents early.
• Correct AIS errors promptly.
• Be compliant & respond on time to avoid complications.
• If unsure, seek professional help-it saves time and reduces risk.

The Bottom Line:
This year’s scrutiny wave isn’t a “raid.” It is the outcome of a hyper-intelligent, data-integrated system that relies on information, not assumptions. The department isn’t looking at you; it’s looking at your data. And if your data is dramatic or contradictory, the system simply invites you for a conversation.
The good news? If everything is genuine and documented, scrutiny may only be an irritating formality. The bad news? Honesty still remains India’s most underrated tax-saving tool.

[Views expressed are the personal view of the author. Readers are advised to seek professional advice before taking any decisions. Readers may forward their feedback & queries at nareshjakhotia@gmail.com.  Other articles & response to queries are available at www.theTAXtalk.com]