I-T returns: Norms notified for compulsory scrutiny

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Search and survey cases, income tax notices where no return was furnished as well as cases, where specific instances of tax evasion was detected will be taken up for complete scrutiny during the current financial year by the income tax department.

“Cases, in respect of which specific information pointing out tax evasion for the relevant assessment year is provided by any law-enforcement agency, and the return for the relevant assessment year is furnished by the assessee,” listed the Central Board of Direct Taxes (CBDT) as one of the parameters for compulsory selection of returns for complete scrutiny during the fiscal 2023-24.

Besides, cases in which notices have been served under Section 148 of the Income Tax Act, where in the assessing officer is of the view that an individual’s taxable income has escaped assessment, will also be taken up for scrutiny.

Cases where registration or approval by trusts and institutions under Section 12A, 12AB or those engaged in scientific research under 35(1)(ii)/ (iia)/ (iii) have not been granted or have been cancelled/withdrawn by the Competent Authority, yet the assessee has been found to be claiming tax-exemption/deduction in the return will also be taken up.

Cases selected for compulsory scrutiny by the International Taxation and Central Circle charges following the prescribed parameters and procedure with prior administrative approval of the Principal Commissioner or Commissioner will not be transferred to the National Faceless Assessment Centre (NaFAC) unless the case itself transferred. “It is further clarified that communication to NaFAC for access and further action after selection for compulsory scrutiny will not apply to the International taxation and Central charges,” the CBDT further said.

It has also prescribed June 9 as the last date for selection and transfer of cases to NaFAC wherein assessments have to be completed in faceless manner and June 30 as last date for service of Section 143(2) notice in cases selected for compulsory scrutiny. Section 143 (2) gives a chance to the assessee to defend themselves in case any errors or deficiencies are revealed in a scrutiny.

“As per the amendments brought by Finance Act 2021, the time limit for service of notice under section 143(2) of the Act has been reduced to three months from end of the Financial Year in which the return is filed,” the CBDT pointed out.

The CBDT lists outs parameters for compulsory selection of scrutiny cases every year as part of efforts to prevent under reporting and miss-reporting of taxable income. Additionally, some cases are picked up on a random basis through computer assisted scrutiny selection.


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