Parameters for compulsory selection of income-tax returns filed in FY 2025-26 for complete scrutiny during FY 2026-27
The Central Board of Direct Taxes (“CBDT”) has issued guidelines on 4th June, 2026 vide F. No. 225/56/2026/ITA-II prescribing the parameters for compulsory selection of income-tax returns filed in FY 2025-26 for complete scrutiny during FY 2026-27. The guidelines identify specific categories of cases that will be mandatorily selected for scrutiny and set out the procedure to be followed by the tax authorities for such selection.
A summary of the key categories covered under the guidelines is provided as under:
| Category | Cases Covered | Procedure / Action to be taken |
| Survey Cases | Cases where survey proceedings under section 133A [other than section 133A(2A)] have been conducted on or after 01-04-2024 . | Such cases shall be compulsorily selected for complete scrutiny after approval of the competent authority [DGIT (Systems), Delhi] and examined with reference to issues arising from the survey proceedings. |
| Search and Requisition Cases | Cases where Search under section 132 or Requisition under section 132A has been initiated on or after 01-04-2024. | Returns filed pursuant to Search/Requisition proceedings shall be mandatorily scrutinized with the prior approval of the competent authority to verify income, assets, documents, and issues arising from the search action. |
| Reassessment Cases | Cases where notice under section 148 has been issued, including cases arising from search (initiated on or after 01-04-2021 but before 01-09-2024), survey (conducted on or after 01-04-2021), or other reassessment proceedings requiring completion on or before 31-03-2027. | Such cases will be taken up for scrutiny in accordance with the reassessment framework to examine issues for which income is considered to have escaped assessment. |
| Trusts / Institutions claiming exemption despite cancellation or rejection of registration | Cases where registration/approval under sections 12A, 12AB, 10(23C), 35, etc. has been denied, cancelled, or withdrawn, but exemption/ deduction has been claimed in the return. | The claim of exemption/deduction will be specifically examined to verify its admissibility in light of the denial, cancellation, or withdrawal of registration/approval. |
| Recurring Addition Cases | Cases involving recurring issues where substantial additions were made in earlier years (exceeding Rs. 50 lacs in metro cities (Ahmedabad, Bengaluru, Chennai, Delhi, Hyderabad, Kolkata, Mumbai and Pune) & exceeding Rs. 20 lacs in non-metro cities) and such additions have attained finality or have been upheld in favour of the Revenue. | Scrutiny will focus on the same recurring issues to verify whether similar claims or positions have been continued in the current year. |
| Cases based on Specific Information of Tax Evasion | Cases where credible information is received from Investigation Wing, intelligence agencies, regulatory authorities, law enforcement agencies, or other Government departments. | Such cases will be selected for complete scrutiny to verify the specific information received and determine its tax implications. |
The CBDT has further clarified that cases selected under the above parameters shall generally be handled through the prescribed assessment framework, while separate procedures would continue to apply in cases falling under the jurisdiction of International Taxation and Central Charges authorities. The guidelines also prescribe 30th June 2026 as the last date for issuance of Notice under section 143(2) in respect of returns filed during FY 2025-26.
These guidelines provide important insight into the categories of taxpayers that may face compulsory scrutiny during FY 2026-27. Taxpayers falling within any of the specified parameters should proactively review their tax positions, supporting documentation, and compliance records to ensure preparedness in the event of scrutiny proceedings. The guidelines also reflect the Department’s continued focus on information-based assessments and monitoring of cases involving prior adverse findings, search/survey actions, and specific intelligence inputs.
The complete Guidelines issued by CBDT are enclosed.
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(Narayan Jain is author of famous books “How to Handle Income Tax Problems” and “ Income Tax Pleading & Practice”)
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