Income Tax Scrutiny

Scope of scrutiny assessment in AIR cases under Income Tax Act 1961

Income Tax - Income Tax Department nowadays selects almost all cases for scrutiny assessment under section 143(2) of Income Tax Act 1961 based upon AIR(Annual Information Return) transactions or through CASS. It is sometimes seen that when a case is selected for scrutiny assessment on the basis of AIR transactions, assessing officer also sometime tend...

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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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Income Tax scrutiny reduced drastically over the years: MOF

Income Tax - Ministry of Finance  Income Tax Returns( ITR) scrutiny reduced to 0.25% in AY 2018-19 IT Dept is changing -from just enforcement to facilitating better taxpayer services. No. of cases selected for scrutiny reduced drastically over the years – 0.71% in AY 2015-16, 0.40% in AY 2016-17, 0.55% in AY 2017-18 & 0.25% in AY 2018-19. [...

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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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Conversion from Limited to Complete Scrutiny Not Allowed Prior to Receipt of Approval from PCIT

Manju Kaushik Vs DCIT (ITAT Jaipur) - The issue under consideration is whether the conversion of case from limited scrutiny to complete scrutiny prior to receipt of approval from Pr. CIT is justified in law?...

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No additions on issues not part of limited scrutiny: ITAT Delhi

Atul Gupta Vs ACIT (ITAT Delhi) - Atul Gupta Vs ACIT (ITAT Delhi) It is an undisputed fact that the instant case was picked up for ‘Limited Scrutiny’ on two specific issues as reproduced in Para 2.0 above. It is also an undisputed fact that neither any permission was sought by the AO to expand the scope of limited scrutiny in th...

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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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Time for compulsory selection of returns for Scrutiny extended

F.No.225/126/2020/ITA-II - (30/09/2020) - CBDT extended the date for selection of cases for Compulsory Scrutiny on the basis of prescribed parameters, as communicated vide Board's letter dated 17.09.2020, from 30th September,2020 to 31st October,2020....

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Compulsory Complete Income Tax Scrutiny Guidelines during FY 2020-21

F.No.225/126/2020/ITA-II - (17/09/2020) - Keeping in view of the Faceless Assessment Scheme,2020 implemented by the Department and the difficulties being faced amid COVID-19 pandemic, the parameters for compulsory selection of returns for Complete Scrutiny during Financial Year 2020-21 and conduct of assessment proceedings in such cases are...

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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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Recent Posts in "Income Tax Scrutiny"

Time for compulsory selection of returns for Scrutiny extended

F.No.225/126/2020/ITA-II (30/09/2020)

CBDT extended the date for selection of cases for Compulsory Scrutiny on the basis of prescribed parameters, as communicated vide Board's letter dated 17.09.2020, from 30th September,2020 to 31st October,2020....

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Conversion from Limited to Complete Scrutiny Not Allowed Prior to Receipt of Approval from PCIT

Manju Kaushik Vs DCIT (ITAT Jaipur)

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

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No additions on issues not part of limited scrutiny: ITAT Delhi

Atul Gupta Vs ACIT (ITAT Delhi)

Atul Gupta Vs ACIT (ITAT Delhi) It is an undisputed fact that the instant case was picked up for ‘Limited Scrutiny’ on two specific issues as reproduced in Para 2.0 above. It is also an undisputed fact that neither any permission was sought by the AO to expand the scope of limited scrutiny in the […]...

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Compulsory Complete Income Tax Scrutiny Guidelines during FY 2020-21

F.No.225/126/2020/ITA-II (17/09/2020)

Keeping in view of the Faceless Assessment Scheme,2020 implemented by the Department and the difficulties being faced amid COVID-19 pandemic, the parameters for compulsory selection of returns for Complete Scrutiny during Financial Year 2020-21 and conduct of assessment proceedings in such cases are prescribed as under:...

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Scope of scrutiny assessment in AIR cases under Income Tax Act 1961

Income Tax Department nowadays selects almost all cases for scrutiny assessment under section 143(2) of Income Tax Act 1961 based upon AIR(Annual Information Return) transactions or through CASS. It is sometimes seen that when a case is selected for scrutiny assessment on the basis of AIR transactions, assessing officer also sometime tend...

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Income Tax scrutiny reduced drastically over the years: MOF

Ministry of Finance  Income Tax Returns( ITR) scrutiny reduced to 0.25% in AY 2018-19 IT Dept is changing -from just enforcement to facilitating better taxpayer services. No. of cases selected for scrutiny reduced drastically over the years – 0.71% in AY 2015-16, 0.40% in AY 2016-17, 0.55% in AY 2017-18 & 0.25% in AY 2018-19. [...

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Posted Under: Income Tax |

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....

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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?...

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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...

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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?...

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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 […]...

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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...

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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 […]...

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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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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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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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Section 143(3) of Income Tax Act – Scrutiny Assessment –FAQ’s

Dear Readers, now these days Income Tax Department is very active in tax collection matters to achieve their targeted collection. Income Tax law mainly permits self-Assessment by assesse, related to their Income Tax Liability, however, from huge database of assesses limited numbers of returns are selected for scrutiny assessment. Now, Inc...

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How to Select Cases in Income Tax Scrutiny & Need For Same

Article explains Why there is a need for scrutiny selection by the Income Tax Department, Cases where A.O. must manually pick the case for Income Tax scrutiny, Methods for Picking case under Income Tax Scrutiny and  Steps to be taken by AO after selecting the case under scrutiny to increase Tax Collection. Why there is […]...

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‘Taxpayer’s Parade’: Beware of Anti-Tax Evasion Weapons

Krishna, on 26th January, India celebrates its Republic Day. Over the past few months GST and Income Tax departments have been sending notices to the taxpayers to increase the collection of Revenue. Please tell what are the weapons that department is using to take the Taxpayer’s parade?...

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Relax Scrutiny provisions for Individual Tax Payers: ICAI

In order to encourage more people to file income tax returns, necessary provisions may be introduced, such as: Individuals having taxable income upto Rs. 10 lakhs may not be subjected to scrutiny for 3 Assessment Years unless there is specific information available with the Department regarding his high value transaction....

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Additions in Scrutiny Assessments under CASS on ground(s) not in notice

In scrutiny assessments, as a part of the regular procedure, a notice is served u/s 143(2) of the Income Tax Act & the AO proceeds to ask for some information by issuing notice u/s 142(1) & after getting replies from the assessee, proceeds to frame the assessment u/s 143(2). These days, the initial notices served […]...

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AIR (Annual Information Report) and Scrutiny Assessment u/s 143(3)

n the era of technology and data analytics, Income Tax Department too empowered itself with one of the most enabling report which allowed itself to peep itself into the assessee’s deeper secrets by laying down the responsibility on Financial Institution like Banks, Mutual Funds, to submit AIR (Annual Information Report). In this article...

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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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E-Assessment Procedures – Income Tax

Electronic assessment, also known as e-assessment, online assessment, computer assisted/mediated assessment and computer-based assessment, is the use of information technology in various forms of assessment. Finance Minister, Arun Jaitley, also announced of such scheme in his budget speech on February 1, 2018; which would almost eliminate...

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7 Common Reasons Why You Get Income Tax Notices

7 Common Reasons Why You Get Income Tax Notices are Due to TDS, Mismatch of information in the return filed by you, Random Scrutiny, Ignoring income received from the previous employer, Not depositing the full amount of tax assessed before the due date, Income Tax Return not filed or filed after the due date and  […]...

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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 his jurisdiction....

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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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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 for the AO and is bad in law, I am direc...

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In case of Limited scrutiny AO cannot make additions or disallowances on other issues

Shri Vijay Kumar Vs ITO (ITAT Chandigarh)

Shri Vijay Kumar Vs ITO (ITAT Chandigarh) The main contention of the Ld. Counsel for the assessee is that the Assessing Officer while making the impugned additions has exceeded his jurisdiction. That the case of the assessee was selected for limited scrutiny issue i.e. regarding security transaction. The Assessing Officer could not find a...

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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 Officer.At the time of CASS run, the data...

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How to check scrutiny risk in Tax Audit Report?

The due date of Income Tax Audit is 30th September, 2019 and all the taxpayers are busy finalizing their Income Tax Report. So, what the taxpayer should do in order to avoid scrutiny risk?...

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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, Chennai, Delhi, Hyderabad, Kolkata, Mumbai a...

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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)(viib), no verification on such issues wi...

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

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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Assessment of Firms-Important issues which AO must consider

Circular No. 12/2019-Income Tax (19/06/2019)

C&AG had carried out a Performance Audit regarding 'Assessment of Firms' under the Income-tax Act, 1961 ('Act) and in its Report No. 7 of 2014, has made certain suggestions so that in future, assessments in these cases are handled in a more effective manner by the Assessing Officers (AOs)....

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‘ITR form’ asking for information equivalent to ‘Income Tax Scrutiny’

It appears that the CBDT has envisaged turning the ITR forms into Scrutiny forms. By making the changes in current year ITR forms, the Dept. has increased the scope of disclosure and the scope to uncover the under-reporting or wrong-reporting of income. Key Changes have been discussed as follows:...

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Income Tax Scrutiny Notice – Know How to go about it?

Annually the Income tax department verifies the accuracy of the income tax returns filed by taxpayers by sending scrutiny notice to them. This is aimed at ensuring that the taxpayer has not understated the income or has not computed excessive loss or has not underpaid tax. Scrutiny notice received by an individual can be grouped […...

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5 Situations in which Notices under Income Tax Act may come

You can get the Income Tax Notices When the employer has deducted tax from the Salary and you have not file the return, When there is mismatch in TDS (tax Credit), You entered in High Value Transactions, You made Investments in the name of close relatives, For Discrepancy in the Return etc. 1. When the […]...

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Scope of limited scrutiny cannot be extended without approval of administrative CIT

Suresh Jugraj Mutha Vs Addl. CIT (ITAT Pune)

Suresh Jugraj Mutha Vs Addl.CIT (ITAT Pune) Conclusion: It is outside the jurisdiction of AO converting the limited scrutiny case like the present one to the unlimited one without the approval of Administrative Commissioner of Income Tax. Facts – Assessee filed the return and the case was taken up for limited scrutiny for the purpose [&...

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Scrutiny Selection On The Basis Of AIR (SFT) Information

In the era of fast changing technology and data analytics, Income Tax Department too empowered itself with one of the most enabling data-sets which allowed itself to peep itself into the assessee’s deeper secrets by laying down the responsibility on Financial Institution like Banks, Registering authority empowered to register vehicles u...

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Complete time barring scrutiny assessments by 25.12.2018: CBDT

D.O. F.No. 225/410/2018/ITA.II (29/11/2018)

Assessing Officers should be sensitized to that fact that they should stagger their E-assessment related workload so that all assessments get uploaded by 25th of December, 2018 and no ticket is raised after the said date....

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CBDT directives on scope of inquiry in cases selected for Limited Scrutiny

F. No. 225/402/2018/ITA.II (28/11/2018)

i. The Assessing Officer shall duly record the reasons for expanding the scope of 'Limited Scrutiny' to the extent mentioned in para 2 and 3, above; ii. The same shall be placed before the Pr. CIT/CIT concerned and upon his approval, further issue can be considered during the assessment proceeding;...

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Manual Income Tax Scrutiny Criteria for financial-year 2018-2019

Instruction No. 04/2018 (20/08/2018)

CBDT has released parameters for manual selection of Income Tax Returns for Complete Income Tax Scrutiny during financial year 2018-19 vide Instruction No. 04/2018 Dated: 20th August 2018....

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Scrutiny Assessment only through ‘E-Proceeding’ facility subject to 7 exceptions

Instruction No. 03/2018 (20/08/2018)

CBDT has vide Instruction No. 03 dated 20th August 2018 directs that In all cases (subject to exceptions provided), where assessment is required to be framed under section 143(3) of the Act during the year 2018-19, assessment proceedings shall be conducted electronically through the 'E-Proceeding' facility. ...

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

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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Posted Under: Income Tax |

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

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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Posted Under: Income Tax |

Upload Pending scrutiny orders/completion of processing: DIT

F.No: DGIT(S)-3/AST/Processing of CASS Cases/101/2016-17/1 (07/02/2018)

As you may be aware, Assessing Officers are required to complete scrutiny proceeding in ITD system or on ITBA as well as process e-filed returns transferred by CPC in certain scenarios for various AYs....

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Govt to prescribe New scheme for Income Tax scrutiny assessment

It is proposed to amend the section 143, by inserting a new sub-section (3A), after sub-section (3), enabling the Central Government to prescribe the aforementioned new scheme for scrutiny assessments, by way of notification in the Official Gazette....

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Assessment of Defective Income Tax Return Selected For Scrutiny Under CASS- Procedure

F.No. System/ITBA/CASSlDefective returns/17 -18/ (12/12/2017)

During CASS Cycle 2016, some of the returns of income which earlier were treated as defective as per provision of section 139(9) of Income Tax Act, 1961 (‘Act’) either for the reason that the taxes as per the return were not paid or for any other reason specified therein were also selected for scrutiny....

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Unauthorized expansion of scope of limited scrutiny- CBDT suspends officers

F.No. DGIT(Vig.)/HQ/SI/2017-18 (30/11/2017)

It was found that no reasons had been recorded for expanding the scope of limited scrutiny, no approval was taken from the PCIT for conversion of the limited scrutiny case to a complete scrutiny case and the order sheet was maintained very perfunctorily. This gave rise to a very strong suspicion of mala fide intentions. The Officer concer...

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Conduct of Assessment Proceedings electronically in time-barring scrutiny cases

Instruction No. 8/2017 (29/09/2017)

Assessment proceedings in following time-barring scrutiny cases, pending as on 1st October,2017 where hearing have not been completed, would be carried out through the ‘e-Proceeding‘ facility on ITBA-...

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Generation of scrutiny notices in CASS-2017-reg.

F.No.DGIT(S)/ADG(S)-2/CASS 2017-18/143/2016 (25/09/2017)

It is seen that till 25-09-2017, notices have not been issued in 2285 cases. These 2285 cases include 8 cases which are lying with inactive codes....

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In granting approval to case manually selected for scrutiny CIT is required to show application of mind

M/s Brothers & Sisters Enterprise Vs JCIT (ITAT Kolkata)

1. The argument of the assessee in this case is that the selection for scrutiny of this case manually done by the Assessing Officer is bad in law and that the Commissioner of Income Tax has granted approval for selection of this case for scrutiny by the AO without application of mind. Ld. Counsel for […]...

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Notice under section 143(2) has to be served within stipulated time

Cameron (Singapore) Pte Ltd Vs. ADIT (International Taxation) (ITAT Jaipur)

According to section 143(2) of the Income Tax Act, 1961(for short the Act), where a return has been furnished under section 139 of the Act, or in response to a notice under section 142(1) of the Act, the Assessing Officer(AO) or the prescribed income-tax authority, as the case may be, if, considers it necessary or expedient to ensure that...

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Revised format of Issue of notices U/s. 143(2) of Income-tax Act, 1961

Notification No. F.No. 225/157/2017/ITA.II-Income Tax (23/06/2017)

The three formats of notice(s) are: Limited Scrutiny (Computer Aided Scrutiny Selection}, Complete Scrutiny (Computer Aided Scrutiny Selection), Compulsory Manual Scrutiny The revised format of 143(2) notice(s) with a note on benefits & Procedures of' E-Proceeding' facility are enclosed for information of the field authorities....

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How Income Tax Base can be widened

Under the present system of limited scrutiny under CASS (Computer Aided Scrutiny Selection) Income Taxes Cases are selected for hearing under various parameters and assessments are made basing on the books of account and evidences produced. Further notices are sent to assessees basing on information collected from the Annual Information R...

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Posted Under: Income Tax |

CBDT fixes collection Target- Jan-March dedicated quarter for Recovery

F. No. 385/17/2016-IT (B) (06/01/2017)

Time-barring date of scrutiny assessment was advanced to 31st December to provide assessment units with a dedicated quarter for recovery of demand raised. ...

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CBDT committee to suggest effective scrutiny assessment measures

FTS-300315894/2016 (19/12/2016)

Constitution of Committee to give recommendations regarding how to make effective assessment through the use of departmental database/ e-system-reg....

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Return revised to change cash balance /Income may face Scrutiny

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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Posted Under: Income Tax |

Status of Time Barring Scrutiny Assessments as on 05/12/2016

F. No. DGIT(S)/DIT(S)-3/AST/Time Barring Matters/84/2016-17 (08/12/2016)

Complete data as well as the AO/Range/CIT-wise summary of pendency of Time Barring scrutiny assessments as on 05/12/2016 and regionwise summary is attached. ...

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Reg. Scrutiny notices u/s 143(2) for PAN selected in CASS-2016

F.No.DIT(S)-2/CASS/2016-17/ (29/09/2016)

It is seen that till 28-09-2016, notices u/s. 143(2) for scrutiny have not been issued in 625 cases. These 625 cases include 62 cases which are lying with inactive codes. In view of the above, you are requested to make arrangements for issue of notice u/s 143(2) well before the time barring date i.e. 30.09 2016....

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Issue scrutiny notices for PAN selected in CASS by 30.09.2016

F.No.DIT(S)-2/CASS/2016-17/ (28/09/2016)

It is seen that till 27-09-2016, notices have not been issued in 991 cases. These 991 cases include 80 cases which are lying with inactive codes. AO are requested to make arrangements for issue of notice u/s 143(2) well before the time barring date i.e. 30.09.2016....

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ITBA application for Selection of Scrutiny cases under CASS released

CASS Instruction No. 3 (16/09/2016)

Computer Assisted Scrutiny Selection (CASS) for the current year has been finalized. The Board has approved the parameters for selection of cases and cases will be visible to the Assessing Officers from 19.09.2016....

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Reg. Functionality for Selection of Scrutiny cases & Notice Issue

ITBA-Assessment Instruction No. 2 (01/08/2016)

The functionality for selection of cases and for generation of notice u/s 143(2)/148 will be made available w.e.f. 01/08/2016 in Income Tax Business Application (ITBA) as per the following details:...

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Reg. e-mail based communication for Paperless Assessment

F.No. 225/267/2015/ITA.II (27/07/2016)

As you are aware, the assessment proceedings in all cases selected under scrutiny are now to be conducted through e-mail based communications unless the taxpayer concerned himself desires to opts out of the Paperless Assessment Scheme. The assessing officer also can decide to switch over to the manual mode of assessment, after recording r...

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CBDT enables view of CIB, AIR & other info of Cases Selected in CASS

CASS - Instruction No. 2 (25/07/2016)

This year in CASS, two types of cases are selected for scrutiny, one is 'Limited Scrutiny' and other is 'Complete Scrutiny'. The type of case - 'Limited' or 'Complete' — is displayed on the notice issued u/s 143(2), 'Scrutiny Register', 'MIS Report' and on the screen showing details of the case....

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Conversion of Limited Income Tax Scrutiny to Complete Scrutiny-Reg.

Instruction No. 5/2016 (14/07/2016)

Board hereby lays down that while proposing to take up 'Complete Scrutiny' in a case which was originally earmarked for 'Limited Scrutiny', the Assessing Officer ('AO') shall be required to form a reasonable view that there is possibility of under assessment of income if the case is not examined under 'Complete Scrutiny'. ...

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Income Tax manual /Compulsory scrutiny criteria F.Y. 2016-2017

Instruction No. 4/2016-Income Tax (13/07/2016)

CBDT lays down the following procedure and criteria for manual selection of returns/cases for compulsory scrutiny during the financial-year 2016-2017:- (i) Cases involving addition on a substantial and recurring question of law or fact in earlier assessment year(s), in excess of Rs. 25 lakhs in metro charges...

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CBDT revises format of Issue of Income Tax notices U/s. 143(2)

F.No. 225/162/2016/ITA.II (11/07/2016)

Central Board of Direct Taxes, with approval of the Revenue Secretary, has decided to modify notice under section 143(2) of the Income-tax Act. Henceforth, there shall be three formats of the said notice namely: Limited Scrutiny, Complete Scrutiny, Manual Scrutiny...

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CBDT Strategy to ensure Quality in Assessment Work for 2016-17

Framing of Quality Assessments is an essential part of any risk management strategy. Quality of Assessments is being used as one of the most important indicator to judge the performance of tax department. Therefore, it is imperative that various authorities in the hierarchy of Income-tax Department discharge their respective roles in the ...

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Posted Under: Income Tax |

Optional Paperless / e-assessment in Hyderabad & Kolkata

F.No.225/267/2015/ITA.II (23/05/2016)

It has now been decided to cover two more cities, namely Hyderabad and Kolkata, for implementing e-mail based communication scheme for paperless assessment proceedings. It shall now be open for all the taxpayers assessed in those seven cities, whose cases have been selected under scrutiny, to opt for being scrutinized under the e-mail ba...

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Furnish details of limited scrutiny cases converted in complete scrutiny

F.No.225/269/2015-ITA-II (12/05/2016)

Pr. CCsIT/CCIT (Exemptions)/CCIT (Intl. Tax)/Pr. DGsIT/DGIT(Inv.) wise details of number of limited scrutiny cases converted into complete scrutiny, along with the actual assessed income in these cases (may be given in board tax bracket wise, for example Rs. 5-10 Lakh/Rs. 10-15 Lakh and so on....

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Consolidation of TDS Entries in Scrutiny Cases with more than 1000 Entries

Letter F.No.DGIT(S)/DIT(S)-3/AST/Scrutiny/Consolidation of TDS/99/2015-16 (17/03/2016)

It has been noticed in previous years that in several cases having large number of TDS claims in ITR and TDS entries in Form NO. 26AS, AOs face technical difficulty while passing the assessment order under section 143(3) on AST system towards the end of March. ...

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Manual Scrutiny Selection based on CPC Recommendations

AST INSTRUCTION NO.141 (22/03/2016)

The functionality for viewing such cases which are selected by AO under Manual Scrutiny on the basis of suggestions by CPC for A.Y. 2013-14 and for which order under section 143(3) of the Act has still not been passed, has been enabled in the ITD system and can be accessed by entering the following path in ITD System:...

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Verification of Agriculture Income of more than ₹ 1 Crore

LETTER F.NO.DGIT(S)/DIT(S)-3/AST/PIL MATTER/AGRICULTURAL INCOME/97/2015-16 (10/03/2016)

Verification of Genuineness of Agricultural Income Shown In Income Tax Return by Assessees for Assessment Years 2011-12 to 2013-14- There is a PIL matter pending before Hon'ble Patna High Court wherein concerns have been raised that a few assesses may be engaged in routing their unaccounted/illegal money in the garb of agricultural income...

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Widening Scope of Scrutiny Through Selection of Cases On the Basic of AIR

We all are aware about the Scrutiny Proceedings in the case of ITR which is usually a trauma for each and every person. Now-a-days, CBDT has given instructions to select the cases for scrutiny on the basis of some specific transactions if entered in by any person. Regarding these transaction Income Tax Department (ITD) is collecting the d...

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CBDT Streamlining scrutiny assessment and facilitating electronic communication

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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Issue Questionnaire with First Notice in scrutiny cases: CBDT

Instruction No. 19/2015 (29/12/2015)

Instruction No. 19/2015 Instances have come to the notice of the Board that in cases selected under scrutiny, while issuing the first notice, Assessing Officers do not convey the specific compliance requirements like production of accounts, furnishing of documents, information, evidences, submission of other requisite particulars etc...

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Clarification on Scope of scrutiny in cases selected through CASS

Instruction No. 20/2015 (29/12/2015)

The Central Board of Direct Taxes ('CBDT') , vide Instruction No. 7/2014 dated 26 09.2014 had clarified the extent of enquiry in certain category of cases specified therein , which are selected for scrutiny through CASS . Further clarifications have been sought regarding the scope and applicability of the aforesaid Instruction to cases be...

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Committees to Monitor unreasonable and High­ Pitched Scrutiny Assessment Orders

Instruction No. 17/2015 (09/11/2015)

Instruction No. 17/2015 Board has consistently been advising the field authorities to be fair, objective and rational while framing scrutiny assessment orders. Role of supervisory authorities in this regard, has also been highlighted by the Board from time to time. It has, however, been brought to the notice of Board that the tendency to ...

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5 Major Reasons Behind Income Tax Notices

Although it’s quite common to receive notices from IT department, people do get scared when they get one. What one needs to know is it’s not as big deal as one believes it to be, and if handled tactfully, one can get rid of any further complications. Following are some common reasons why people recieve […]...

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CBDT to initiate Paperless Scrutiny Assessment in 5 Cities

F. No. 225/267/2015-ITA-II (19/10/2015)

In order to improve the taxpayer services, enhance the efficiency and to usher in a paperless environment for carrying out the assessment proceedings, CBDT has decided to initiate the concept of using email for corresponding with taxpayers and sending through emails the questionnaires, notice etc. at the time of scrutiny proceedings and g...

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Scrutiny assessments of assessees engaged in Mining business

Instruction No. 14/2015 (14/10/2015)

Instruction No. 14/2015 while scrutinizing the cases of entities engaged in the business of mining, the Annual Returns filed with IBM by the respective assessees should invariably be obtained and compared with the details submitted to the Income-tax Department so as to ascertain whether any suppression of production and discrepancy in sto...

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Income Tax Scrutiny Criteria for Assessment Year 2016-17

Instruction No. 08/2015 (31/08/2015)

Compulsory manual selection of cases for scrutiny during the Financial Year 2015-2016- (a) Cases involving addition in an earlier assessment year in excess of Rs. 10 lakhs on a substantial and recurring question of law or fact which is either confirmed in appeal or is pending before an appellate authority. Instruction No. 08/2015 ...

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No processing of returns for I-T refund if selected for Scrutiny

Instruction No.1/2015 (13/01/2015)

Instruction No.1/2015 Clarification regarding applicability of section 143(1D) of the Income-tax Act, 1961- Vide Finance Act, 2012, section 143(1D) was introduced in income tax act which prohibited processing of income tax returns in case notice u/s 143(2) has been issued (i.e. scrutiny cases). Ambiguity arose as to whether the said sub-s...

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CBDT issues further Guidelines on Income Tax Scrutiny & Appeals

Instruction No. 7 of 2014 dated 26.09.2014 clarifies that ordinarily in scrutiny cases selected on the basis of AIR/CIB/26AS information, the scrutiny shall be limited to that information. Wider scrutiny would be possible only with the sanction of Principal Commissioner of Income-tax/ Commissioner of Income-tax in specified cases and unde...

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Arye wah! Instructions to reduce hardship of taxpayer in Income Tax Scrutiny

CA Umesh Sharma Arjuna (Fictional Character): Krishna, recently on 7th November 2014, the Central Board of Direct Taxes has issued instructions for reducing hardship of taxpayers in Income tax scrutiny. But Krishna, what is this scrutiny? Krishna (Fictional Character): Arjuna, the taxpayer files his Income Tax Return. Income Tax Scrutiny ...

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Avoid lengthy questionnaires without due application of mind – CBDT to its Officers

Though less that 1% of returns filed are selected for scrutiny, this area of work has often drawn adversarial comments. Supervisory officers, have been directed to play a more pro-active role in monitoring and guiding assessments towards ensuring that high-pitched assessments without proper basis are not made and that lengthy questionnai...

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Scrutiny assessments in cases of fish farmers – CBDT Instructions

Instruction No. 8/2014 (27/10/2014)

Representations have been received by the Board from various quarters regarding difficulties being faced on account of surveys and income-tax scrutiny assessments by fish farmers, being involved in business and profession of running inland fresh water fish tanks specifically in cases where the books-of-accounts are not being maintained by...

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Limited Income Tax Scrutiny of cases selected under CASS – CBDT

instruction no. 7/2014 (26/09/2014)

Central Board of Direr Taxes vide instruction no. 7/2014 dated 26.09.2014, by virtue of its powers under section 119 of the Act, in suppression of earlier instructions/ guidelines on this subject, hereby directs that tile cases selected for scrutiny during the Financial Year 2014-2015 under CASS, on the basis of Either AIR data or CIB in...

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Scrutiny of Income Tax Returns

Once we file a return of income tax to the tax authorities, it has to be assessed as a correct return unless it is a self assessment return under section 139 of Income Tax Act. The assessment of returned income involves verification and scrutiny of the details of income submitted. ...

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Income Tax Scrutiny Criteria- Financial Year 2014-15

Instruction No. 6/2014 (02/09/2014)

CBDT hereby lays down the following procedure and criteria for manual selection of returns/cases for scrutiny during the Financial-year 2014-2015:- a) Cases involving addition in an earlier assessment year in excess of Rs. 10 lakhs on a substantial and recurring question of law or fact which is confirmed in appeal or is pending before an ...

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Exemption wrongly claimed gets detected during processing of I-T Return -FM

Exemptions and tax concessions under the Income-tax Act, 1961 (‘Act’) are provided in accordance with the provisions of the Act. However, any exemption or tax concession wrongly claimed in the returns of income filed by the tax payers are liable to be detected during processing of such returns or their scrutiny....

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TARC recommendations on Scrutiny in direct taxes and audit in indirect taxes

Scrutiny in direct taxes and audit in indirect taxes o   Hearing in all tax cases by personal presence should be avoided, and data can be sought through an e-system. The taxpayer can upload the data on the e-system. Personal hearing should be sought only in complex cases. o   There should be specialization in scrutiny/audit work [&hel...

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Scrutiny on the basis of data in Annual Information Return (AIR)

CA. M. Lakshmanan As per notification F.No. 225/26/2006-ITA.II (Pt.) dated 8th September 2010 scope of enquiry in the scrutiny cases selected on the basis of information collected from AIR returns would be limited to the aspects of information received through AIR....

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Late submission of ITR-V – Is it a tool to avoid scrutiny?

Advocate C. P. Chugh Every year date for submitting of ITR-V is extended beyond 30th Sep.  This year CBDT has extended the date for for receipt of ITR-Vs in CPC,  Bengaluru, for the cases of AY 2012-13 and 2011-12 received in e-filed in FY 2012-13 to 31St October 2013. Is it not a good tool […]...

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Scrutiny Criteria for F.Y. 2013-14 / A.Y. 2014-15

The following categories of cases / returns shall be compulsorily scrutinized for F.Y. 2013-14 / A.Y. 14-15:- a) Cases where value of international transaction as defined u/s 92B of IT Act exceeds Rs. 15 crores. b) Cases involving addition in an earlier assessment year on the issue of transfer pricing in excess of Rs. 10 Crores or more w...

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RTI -Income-tax department return scrutiny guidelines should be public – HC

Joginder Pal Gulati Vs The Officer On Special Duty (ITA II) Cum CPIO and ANR (Delhi High Court)

In so far as the impugned order is concerned, there is nothing stated in the operative part which would seem to indicate that the CIC has come to the conclusion which it has, is based on the fact that, the economic interest of the country, will get effected. The CIC, in the operative part has merely recorded what has been conveyed to it v...

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CBDT emphasises on improving quality of scrutiny assessments

Letter DO F.No. 225/97/2012/ITA.II (25/09/2012)

As you are aware, the CBDT has laid special emphasis in the CAP 2012-13 for improving the quality of assessments. In this regard, a strategy has been mentioned at Annexure-II (pgs. 38-43) of CAP Document. 2. The then Member (IT) had asked the Chief-Commissioners of Income-tax ('CCsIT') to send list of top 100 quality assessments in respec...

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