Income Tax Scrutiny

Practical Aspects in Income Tax Scrutiny proceedings

Income Tax - Scrutiny assessment refers to the examination of a return of income by giving an opportunity to the assessee to substantiate the income declared and the expenses, deductions, losses, exemptions, etc. claimed in the return with the help of evidence....

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Instruction for ‘Limited Scrutiny’ under CASS are Retrospective

Income Tax - Most of the cases selected for Scrutiny are through Computer Aided Scrutiny Selection (CASS). Only a particular class of cases such as those involving Search, Survey and Reopening of Assessment etc. come under Compulsory Scrutiny. A small Number of cases are manually selected by the Assessing Officers where they consider the Income of a p...

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Income Tax Scrutiny assessment and how to avoid it

Income Tax - What is Income Tax scrutiny assessment and how are cases selected for scrutiny? Once an assesse files its Income tax return, IT department examines the return filed and if there are reason to believe that information declared by the assessee are incomplete or false , the through a notice u/s 143(2) of the Income tax […]...

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7 things to know about Income-tax ‘Scrutiny’

Income Tax - 1. What is Scrutiny? Once the assessee files his return of income, irrespective of whether it is filed within the due date or in pursuance to a notice requiring the assessee to file his return, the department can initiate scrutiny proceedings if it has reason to believe that income is escaping assessment, i.e. income is under stated of...

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Intricacies of making addition on account of low GP

Income Tax - 1. Power of the Assessing Officer to estimate profits Comparison of gross and net margin shown by an assessee is a normal exercise during the course of assessment proceedings. While lower gross profit shown by the Assessee as compared to the preceding years is a red flag for investigation, mere existence of low margin cannot […]...

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No scrutiny of Start-ups related to valuations of share premiums 

Income Tax - Start-ups and their investors filing requisite declarations not to be subjected to any scrutiny regarding valuations of share premiums  E-verification mechanism proposed for establishing identity of the investor and source of his funds TV programme proposed exclusively for Start-ups within the DD bouquet of channels Government to launch ...

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Only 0.35% returns picked up for scrutiny this year: CBDT chairman

Income Tax - Income Tax Department has accepted 99.65 per cent of tax returns as it is and has picked only 0.35 per cent cases for detailed scrutiny thereby showcasing full faith in the taxpayers, chairman of the Central Board of Direct Taxes (CBDT), Mr Sushil Chandra said at an ASSOCHAM event held in New Delhi today....

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Giving-up of Indian addresses may not result in escaping scrutiny

Income Tax - In respect of Income Tax department, the persons are liable for taxation on income/transaction originated/attributed to India irrespective of their addresses. Giving-up of Indian addresses may not result in escaping scrutiny by the Department. Specific cases of NRIs giving-up Indian addresses solely for this purpose have not been noticed....

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Return revised to change cash balance /Income may face Scrutiny

Income Tax - It is brought to the notice of tax payers that any instance coming to the notice of Income-tax Department which reflects manipulation in the amount of income, cash-in-hand, profits etc. and fudging of accounts may necessitate scrutiny of such cases so as to ascertain the correct income of the year and may also attract penalty/prosecution ...

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CBDT Streamlining scrutiny assessment and facilitating electronic communication

Income Tax - Taking another step in this direction, Central Board of Direct Taxes (CBDT) has issued instructions to the assessing officers to be specific in enquires made in the case of tax payers whose returns are under scrutiny. The directions are comprehensive and cover cases selected through Computer Aided Scrutiny Selection (CASS) for limited scr...

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Limited Scrutiny cannot be converted to Complete Scrutiny without following CBDT Circular

Shri Prabir Das Vs ITO (ITAT Guwahati) - whether the AO can expand the assessment from ‘Limited Scrutiny’ to ‘Complete Scrutiny’ without following the procedure as laid by the CBDT Circular?...

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No conversion from limited to complete scrutiny on mere suspicion 

Dev Milk Foods Pvt. Ltd. Vs ACIT (ITAT Delhi) - The issue under consideration whether conversion of the case from limited scrutiny to complete scrutiny is justified in law?...

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Limited scrutiny cannot be converted into complete scrutiny without seeking permission from competent authority

Shri Sita Ram Swami Vs ITO (ITAT Jaipur) - Addition made u/s 69 was liable to be quashed as the order passed by AO would be nullity as he couldn’t convert limited scrutiny into complete scrutiny in absence of requisite approval from the competent authority....

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Limited scrutiny cannot be expanded without prior approval of appropriate authority

Late Smt. Gurbachan Kaur Vs DCIT (ITAT Jaipur) - If the A.O. has taken up the issue of determining fair market value of the property in question as on 01/4/1981 without converting the limited scrutiny to comprehensive scrutiny by taking the prior approval of the competent authority then the said order passed by the A.O. will be nullity as beyond h...

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Approval of PCIT mandatory to convert Limited Scrutiny to a Complete Scrutiny

Ravi Prakash Khandelwal Vs DCIT (ITAT Lucknow) - Jurisdiction of the Assessing Officer while making assessments in Limited Scrutiny cases, by initiating inquiries on new issues has to comply with mandatory requirements of the relevant CBDT Instructions dated 09.2014, 29.12.2015 and 14.07.2016, i.e. the approval of the PCIT....

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Constitution of Computer Aided Selection of Cases for Scrutiny (CASS) Committee

F.No. DGIT(RA)/ADG-1/CASS/2019-20/691 - (03/01/2020) - The CASS Committee has been re-constituted under Chairmanship of Director General of Income Tax (Risk Assessment) {DGIT (RA)} as under:...

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Guidelines for scrutiny of invalid returns selected through CASS

F. No. 225/333/2019/ITA-11 - (29/11/2019) - It has been brought to the notice of Board that notices under section 143(2) of the Income-tax Act, 1961 ('Act') were generated in respect of certain invalid returns of the assessees filed for the Assessment Year 2017-18 through CASS Cycle 2018. As the scrutiny of such returns will pose a challenge ...

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Income Tax Business Application (ITBA) – Assessment Module – CASS 2019

Instruction No. 1-CASS 2019 - (24/09/2019) - It has been noticed that sometimes the returns are received by Assessing Officer who is not a jurisdictional Assessing Officer as per PAN. The PAN should be immediately transferred to the jurisdictional Assessing Officer, so that further proceedings can be initiated by the jurisdictional Assessing O...

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Manual Income Tax complete Scrutiny criteria for F.Y. 2019-20

F.No.225/169/2019/ITA-11 - (05/09/2019) - The parameters for manual selection of returns for Complete Scrutiny during financial year 2019- 20 are as under.- (i) Cases involving addition in an earlier assessment year(s) on a recurring issue of law or fact:- (a) exceeding Rs. 25 lakhs in eight metro charges at Ahmedabad, Bengaluru, Chen...

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Angel Taxation | Assessment Procedure of startup Companies | Section 56

Circular No. 16/2019-Income Tax - (07/08/2019) - Following procedure is laid down with regard to the assessment of such startup entities involving the issue of section 56(2)(viib). (i) Where the Startup Company has been recognised by the DPIIT but the case is selected under "limited scrutiny" on the single issue of applicability of section 56 (2)(...

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Recent Posts in "Income Tax Scrutiny"

Practical Aspects in Income Tax Scrutiny proceedings

Scrutiny assessment refers to the examination of a return of income by giving an opportunity to the assessee to substantiate the income declared and the expenses, deductions, losses, exemptions, etc. claimed in the return with the help of evidence....

Read More
Posted Under: Income Tax | ,

Limited Scrutiny cannot be converted to Complete Scrutiny without following CBDT Circular

Shri Prabir Das Vs ITO (ITAT Guwahati)

whether the AO can expand the assessment from ‘Limited Scrutiny’ to ‘Complete Scrutiny’ without following the procedure as laid by the CBDT Circular?...

Read More

Instruction for ‘Limited Scrutiny’ under CASS are Retrospective

Most of the cases selected for Scrutiny are through Computer Aided Scrutiny Selection (CASS). Only a particular class of cases such as those involving Search, Survey and Reopening of Assessment etc. come under Compulsory Scrutiny. A small Number of cases are manually selected by the Assessing Officers where they consider the Income of a p...

Read More
Posted Under: Income Tax | ,

No conversion from limited to complete scrutiny on mere suspicion 

Dev Milk Foods Pvt. Ltd. Vs ACIT (ITAT Delhi)

The issue under consideration whether conversion of the case from limited scrutiny to complete scrutiny is justified in law?...

Read More

Income Tax Scrutiny assessment and how to avoid it

What is Income Tax scrutiny assessment and how are cases selected for scrutiny? Once an assesse files its Income tax return, IT department examines the return filed and if there are reason to believe that information declared by the assessee are incomplete or false , the through a notice u/s 143(2) of the Income tax […]...

Read More
Posted Under: Income Tax |

7 things to know about Income-tax ‘Scrutiny’

1. What is Scrutiny? Once the assessee files his return of income, irrespective of whether it is filed within the due date or in pursuance to a notice requiring the assessee to file his return, the department can initiate scrutiny proceedings if it has reason to believe that income is escaping assessment, i.e. income is under stated of...

Read More
Posted Under: Income Tax | ,

Intricacies of making addition on account of low GP

1. Power of the Assessing Officer to estimate profits Comparison of gross and net margin shown by an assessee is a normal exercise during the course of assessment proceedings. While lower gross profit shown by the Assessee as compared to the preceding years is a red flag for investigation, mere existence of low margin cannot […]...

Read More
Posted Under: Income Tax |

Limited scrutiny cannot be converted into complete scrutiny without seeking permission from competent authority

Shri Sita Ram Swami Vs ITO (ITAT Jaipur)

Addition made u/s 69 was liable to be quashed as the order passed by AO would be nullity as he couldn’t convert limited scrutiny into complete scrutiny in absence of requisite approval from the competent authority....

Read More

Income Tax Scrutiny after digitization

The case is selected for scrutiny by CASS (Computer Aided Scrutiny Selection) for the Assessment Year 2017-18 and the officer sends notice of hearing to the Assessee to attend the office on a particular day with supporting documents such as Books of Account, vouchers, Bank Pass Books etc....

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Posted Under: Income Tax |

Guidelines for Selection of Cases for Scrutiny for FY 2019-2020

Circular No. MIRSD/DPS III//Cir-11/07-SEBI (06/08/2007)

CBDT has issued an Instruction by which it has laid down the procedure and criteria for compulsory manual selection of returns/cases requiring scrutiny during the financial-year 2019-20....

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Posted Under: Income Tax |

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