Central Board of Direct Taxes (CBDT) released guidelines outlining the parameters and procedures for the compulsory selection of income tax returns for complete scrutiny during the financial year 2023-24. The guidelines specify various scenarios, including cases related to surveys, search and seizure actions, non-filing of returns, addition in earlier assessment years, and specific information on tax evasion. The guidelines provide instructions for administrative approval, transfer of cases, and timelines for serving notices. These guidelines aim to ensure effective scrutiny and compliance with tax regulations.
F.No.225/66/2023/ITA-II
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
North Block, New Delhi
Dated: 24th May, 2023
To
All Pr. Chief Commissioners of Income-tax/ Chief Commissioners of Income-tax
All Pr. Director Generals of Income-tax/ Director Generals of Income-tax.
Madam/Sir
Subject: Guidelines for compulsory selection of returns for Complete Scrutiny during the Financial Year 2023-24 — procedure for compulsory selection in such cases — regarding.
Kindly refer to the above.
2. The parameters for compulsory selection of returns for Complete Scrutiny during Financial Year 2023-24 and procedure for compulsory selection in such cases are prescribed as under:
|
S. No. |
Parameter | Procedure for Compulsory Selection |
| 1. | Cases pertaining to survey u/s 133A of the Income-tax Act,1961(Act) | |
| Returns filed for the assessment year relevant to the previous year in which survey was conducted under section 133A of the Act subject to exclusion below:
Exclusion: Cases, where following conditions are satisfied, are excluded from selection for compulsory scrutiny: a. books of accounts, b. returned income (excluding any disclosure of hitherto undisclosed income made during the Survey) is not less than returned income of preceding assessment year; and c. assessee has not retracted from the disclosure referred to in point b above. |
The cases shall be selected for compulsory scrutiny with prior administrative approval of Pr.CIT/Pr.DIT/CIT/DIT concerned, who shall ensure that such cases are transferred to Central Charges u/s 127 of the Act within 15 days of service of notice u/s 143(2) of the Act by the Jurisdictional Assessing Officer (JAO) concerned.
(For Assessing Officers in International Taxation and Central Circle charges: refer Para 4.1 at Page No.06) |
|
| (2) | Cases pertaining to Search and Seizure | |
| (i) | Search & seizure/requisition prior to 01.04.2021:
Assessments in search & seizure cases to be made under Section(s) 153A, 153C read with section |
The cases shall be selected for scrutiny with prior administrative approval of Pr. CIT/Pr. DIT/CIT/DIT concerned, who shall ensure that such cases are transferred to Central Charges u/s 127 of the Act within 15 days of service of notice u/s 143(2)/142(1) of the Act by the Jurisdictional Assessing Officer concerned.Where such cases are not centralized and Return of Income is filed in response to notice u/s 153C, the Jurisdictional Assessing Officer concerned shall serve notice u/s 143(2) of the Act.Where such cases are not centralized and no Return of Income is filed in response to notice u/s 153C, the Jurisdictional Assessing Officer concerned shall serve notice u/s 142(1) of the Act calling for information. |
| (ii) | Search & seizure/requisition on or after 01.04.2021: Assessments in search & seizure cases/ requisitions cases u/s 132/132A conducted on or after 01.04.2021. |
The cases shall be selected for scrutiny with prior administrative approval of Pr. CIT/Pr. DIT/CIT/DIT concerned, who shall ensure that such cases are transferred to Central Charges u/s 127 of the Act within 15 days of service of notice u/s 143(2)/142(1) of the Act by the Jurisdictional Assessing Officer concerned. |
| (3) | Cases in which notices u/s 142(1) of the Act, calling for return, have been issued & no returns have been furnished | |
| Cases where no return has been furnished in response to a notice u/s 142(1) of the Act. | Jurisdictional Assessing Officers (JAOs) shall upload the underlying documents on the basis of which notice u/s 142(1) was issued on ITBA, for access by National Faceless Assessment Centre (NaFAC).
The Directorate of Income-tax (Systems) shall forward these cases to NaFAC, which will take further necessary action. Notice u/s 142(1) of the Act calling for information shall be served on the assessee through NaFAC. (For Assessing Officers in International Taxation and Central Circle charges: refer Para 4.1 at Page No.06) |
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| (4) | Cases in which notices u/s 148 of the Act have been issued | |
| Cases where return is either furnished or not furnished in response to notice u/s 148 of the Act. | (i) Cases, where notices u/s 148 of the Act have been issued pursuant to search & seizure/survey actions conducted on or after the 1″ day of April, 2021:
(ii) Cases other than search & seizure/survey: a) For those cases which are to be completed by NaFAC on or before 03.2024, Jurisdictional Assessing Officers (JAOs) shall upload the underlying documents, on the basis of which notice u/s 148 was issued, on ITBA, for access by NaFAC. The Directorate of Income-tax (Systems) shall forward these cases to NaFAC, which will take further necessary action. Notice u/s 143(2)/142(1) of the Act calling for information shall be served on the assessee through NaFAC. (For Assessing Officers in International Taxation and Central Circle charges: refer Para 4.1 at Page No.06) |
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| (5) | Cases related to registration/ approval under various sections of the Act, such as 12A, 12AB, 35(1)(ii)/ (iia)/ (iii), 10(23C), etc. | |
| Cases where registration/approval under various sections of the Act, such as section 12A, 12AB,35(1)(ii)/(iia)/(iii),10(23C),etc. 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. However, where such orders of withdrawal of registration/approval have been reversed/set-aside in appellate proceedings, those cases will not be selected under this clause. |
i The Jurisdictional Assessing Officers (JAOs) shall prepare a list of cases falling under this parameter with prior administrative approval of Pr.CIT/Pr.DIT/CIT/DIT concerned.
The consolidated list of such cases shall be submitted by the Pr.CIT/Pr.DIT/CIT/DIT to the Pr.CCIT concerned. Pr.CCIT concerned shall forward this list of cases to Directorate of Notice u/s 143(2) of the Act shall be served on the assessee through NaFAC. The Jurisdictional Assessing Officers shall upload the underlying documents containing specific information regarding this parameter immediately. (For Assessing Officers in International Taxation and Central Circle charges: refer Para 4.1 at Page No.06) |
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| (6) | Cases involving addition in an earlier assessment year(s) on a recurring issue of law or fact and/or law and fact | |
| Where the addition in an earlier assessment year(s) on a recurring issue of law or fact and/or law and fact (including transfer pricing issue) is:a. exceeding Rs. 25 lakhs in eight metro charges at Ahmedabad, Bengaluru, Chennai, Delhi, Hyderabad, Kolkata, Mumbai and Pune;b. exceeding Rs. 10 lakhs in charges other than eight metro charges; and where such an addition:(i) has become final, as no further appeal has been preferred against the assessment order; or(ii) has been upheld by the Appellate Authorities in favor of Revenue; even if further appeal of assessee is pending, against such order. |
Where the addition in an earlier assessment year(s) on a recurring issue of law or fact and/or law and fact (including transfer pricing issue) is:c. exceeding Rs. 25 lakhs in eight metro charges at Ahmedabad, Bengaluru, Chennai, Delhi, Hyderabad, Kolkata, Mumbai and Pune;d. exceeding Rs. 10 lakhs in charges other than eight metro charges; upload the underlying documents containing specific information regarding this parameter immediately.(For Assessing Officers in InternationalTaxation and Central Circle charges: refer Para 4.1 at Page No.06) |
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| (7) | Cases related to specific information regarding tax-evasion | |
| Cases, in respect of which:
(a) specific information pointing out tax-evasion (b) the return for the relevant assessment year is |
Cases, in respect of which:
(c) specific information pointing out tax-evasion for the relevant assessment year is provided by any law-enforcement agency, (Investigation Wing/ Intelligence/ Regulatory Authority/ Agency, etc.) ; and (d) the return for the relevant assessment year is furnished by the assessee. |
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3. It is clarified that where return has been furnished in response to notice u/s 142(1) of the Act and such notice u/s 142(1) of the Act was issued due to the information contained in NMS Cycle/ AIS/ Statement of Financial Transactions (SFT)! CPC-TDS information/ information received from Directorate of I&CI, such return will not be taken up for compulsory scrutiny. Selection of such cases for scrutiny will be done through CASS cycle.
4. The cases shall be selected for compulsory scrutiny by the International Taxation and Central Circle charges following the above prescribed parameters and procedure with prior administrative approval of Pr.CIT/Pr.DIT/CIT/DIT concerned. The information pertaining to Compulsory Scrutiny may not be transferred to NaFAC unless the case itself transferred. It is further clarified that communication to NaFAC for access and/or further action after selection for Compulsory Scrutiny will not apply to the International taxation and Central charges.
4.1. The cases which are selected for compulsory scrutiny by the International Taxation and Central Circle charges following the above parameters and procedure prescribed at Para 2, shall continue to be handled by International Taxation and Central Circle charges respectively, as earlier.
5. As per the amendments brought by Finance Act 2021, the time limit for service of notice u/s 143(2) of the Act has been reduced to three months from end of the Financial Year in which the return is filed.
(i) Therefore, for actions related to cases under Parameters at S.No.4(ii), 5, 6 and 7 of Para 2 above, the following timelines shall be followed:
| S. No. | Action | Last Date |
| 1. | Selection and transfer of cases, wherein assessments have to be completed in faceless manner, to NaFAC | 09.06.2023 |
| 2. | Service of Notice u/s 143(2) of the Act in cases selected for Compulsory Scrutiny | 30.06.2023 |
(ii) For all the cases selected for Compulsory Scrutiny, service of Notice u/s 143(2) of the Act shall be completed within the statutory time line i.e., by 30.06.2023.
6. These instructions may be brought to the notice of all concerned for necessary compliance.
(Castro Jayaprakash.T)
Under Secretary (ITA-H), CBDT
Copy to:
1. PS to FM/PS to MoS (F)
2. PS to Secretary (Revenue)
3. Chairman, CBDT & All Members, CBDT
4. All Joint Secretaries/CsIT, CBDT
5. DGIT (Systems)-1 and 2 for necessary action w.r.t. point no. 3,4,5,6 and 7 of the table at Para 2, Para 3 and Para 5 above
6. Web Manager with request to upload on the Departmental website
7. JDIT, Data-Base Cell for uploading on irsofficersonline website
(Castro Jayaprakash.T)
Under Secretary (ITA-H), CBDT
