Income Tax Scrutiny

Check List for Scrutiny of Books for Tax Audit Purpose

Income Tax - Check List for Scrutiny of Books for Tax Audit Purpose For Assessment Year 2021-2022 Step 1: Check and Verify the opening Balances of each ledger as per previous year signed Balance-sheet a) Is there any difference in Opening Balance Yes/No b) If there is any difference, as stated in (a) above, kindly fill the details: […]...

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CBDT Issued Guidelines for Compulsory Selection of Returns for Complete Scrutiny for F.Y. 2021-22

Income Tax - On 10th June, 2021, CBDT issued Guidelines prescribing framework for Compulsory Selection of returns for Complete Scrutiny during the Financial Year 2021- 22 to all PCC/CC/Pr.DG/DG of Income Tax. Study of these guidelines may help taxpayer analyze, as to under which category it falls. Framework is categorized as under: 1. Cases  related ...

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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 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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Expanding of Limited Scrutiny scope by Section 263 order is invalid

Rajani Venkata Naga Annavarapu Narayana Vs PCIT-20 (ITAT Delhi) - ITAT find that order u/s 263 passed by PCIT dwelled into the issue of re-computation of capital gains which is beyond the mandate of limited scrutiny issued by CBDT. Hence, directions of PCIT are beyond selection criteria of scope of scrutiny for instant year cannot be held to be legally valid....

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CIT(A) cannot make addition on issues not covered by limited scrutiny

Arjun Transport Company Private Limited Vs ITO (ITAT Mumbai) - Arjun Transport Company Private Limited Vs ITO (ITAT Mumbai)  In cases selected under ‘limited scrutiny’, the Assessing Officer cannot exceed the latitude of limited scrutiny unless the scope of scrutiny is expanded or the case is converted from ‘limited scrutiny’ to ‘complete scrutiny’...

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CIT(A) cannot travel beyond issue selected under limited scrutiny

Arjun Transport Company Private Limited Vs ITO (ITAT Mumbai) - Arjun Transport Company Private Limited Vs ITO (ITAT Mumbai) When a case is selected for ‘limited scrutiny’ to verify the disallowance made u/s 14A of the Act and AO makes disallowance u/s 14A in the assessment order passed u/s 143 of the Act then the CIT(A) cannot travel beyond the issu...

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Conversion of limited scrutiny into complete scrutiny on mere suspicion is invalid

Ropar Properties And Builders Pvt. Ltd. Vs ITO (ITAT Chandigarh) - Ropar Properties And Builders Pvt. Ltd. Vs ITO (ITAT Chandigarh) To convert the limited scrutiny into complete scrutiny, the Assessing Officer shall be required to form a reasonable view that there is a possibility of under statement of income and that view should be based on credible material or in...

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CIT by exercising revisional jurisdiction cannot expand AO’s limited scrutiny

Taj Paul Bhardwaj Vs PCIT (ITAT Chandigarh) - Since AO passed the assessment order and accepted the return filed by assessee after examining the issue regarding increase in capital account as assessee had credited his capital account with agricultural income and the capital gain from sale of flats and had reflected that same in its capital acco...

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Guidelines for compulsory complete Income Tax Scrutiny during FY 2021-22

F. No. 225/61/2021/ITA-II - (10/06/2021) - Guidelines for compulsory selection of returns for Complete Scrutiny during the Financial Year 2021- 22 - conduct of assessment proceedings in such cases...

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CASS Selection norms/ Instruction for Tax Scrutiny for A.Y 2019-20

Instruction No. 1-Income Tax - (17/05/2021) - Computer Assisted Scrutiny Selection (CASS) 2020 Cycle for ITRs of A.Y. 2019-20 for the current year has been finalized. The Board has approved the parameters for selection of cases and cases are visible to the Assessing Officers....

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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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Recent Posts in "Income Tax Scrutiny"

Expanding of Limited Scrutiny scope by Section 263 order is invalid

Rajani Venkata Naga Annavarapu Narayana Vs PCIT-20 (ITAT Delhi)

ITAT find that order u/s 263 passed by PCIT dwelled into the issue of re-computation of capital gains which is beyond the mandate of limited scrutiny issued by CBDT. Hence, directions of PCIT are beyond selection criteria of scope of scrutiny for instant year cannot be held to be legally valid....

Read More

CIT(A) cannot make addition on issues not covered by limited scrutiny

Arjun Transport Company Private Limited Vs ITO (ITAT Mumbai)

Arjun Transport Company Private Limited Vs ITO (ITAT Mumbai)  In cases selected under ‘limited scrutiny’, the Assessing Officer cannot exceed the latitude of limited scrutiny unless the scope of scrutiny is expanded or the case is converted from ‘limited scrutiny’ to ‘complete scrutiny’ with the approval of authority, as spec...

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CIT(A) cannot travel beyond issue selected under limited scrutiny

Arjun Transport Company Private Limited Vs ITO (ITAT Mumbai)

Arjun Transport Company Private Limited Vs ITO (ITAT Mumbai) When a case is selected for ‘limited scrutiny’ to verify the disallowance made u/s 14A of the Act and AO makes disallowance u/s 14A in the assessment order passed u/s 143 of the Act then the CIT(A) cannot travel beyond the issue selected under ‘limited scrutiny’ ...

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Check List for Scrutiny of Books for Tax Audit Purpose

Check List for Scrutiny of Books for Tax Audit Purpose For Assessment Year 2021-2022 Step 1: Check and Verify the opening Balances of each ledger as per previous year signed Balance-sheet a) Is there any difference in Opening Balance Yes/No b) If there is any difference, as stated in (a) above, kindly fill the details: […]...

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Posted Under: Income Tax |

CBDT Issued Guidelines for Compulsory Selection of Returns for Complete Scrutiny for F.Y. 2021-22

On 10th June, 2021, CBDT issued Guidelines prescribing framework for Compulsory Selection of returns for Complete Scrutiny during the Financial Year 2021- 22 to all PCC/CC/Pr.DG/DG of Income Tax. Study of these guidelines may help taxpayer analyze, as to under which category it falls. Framework is categorized as under: 1. Cases  related ...

Read More
Posted Under: Income Tax |

Guidelines for compulsory complete Income Tax Scrutiny during FY 2021-22

F. No. 225/61/2021/ITA-II 10/06/2021

Guidelines for compulsory selection of returns for Complete Scrutiny during the Financial Year 2021- 22 - conduct of assessment proceedings in such cases...

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Conversion of limited scrutiny into complete scrutiny on mere suspicion is invalid

Ropar Properties And Builders Pvt. Ltd. Vs ITO (ITAT Chandigarh)

Ropar Properties And Builders Pvt. Ltd. Vs ITO (ITAT Chandigarh) To convert the limited scrutiny into complete scrutiny, the Assessing Officer shall be required to form a reasonable view that there is a possibility of under statement of income and that view should be based on credible material or information available on record and such [...

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CASS Selection norms/ Instruction for Tax Scrutiny for A.Y 2019-20

Instruction No. 1-Income Tax 17/05/2021

Computer Assisted Scrutiny Selection (CASS) 2020 Cycle for ITRs of A.Y. 2019-20 for the current year has been finalized. The Board has approved the parameters for selection of cases and cases are visible to the Assessing Officers....

Read More

CIT by exercising revisional jurisdiction cannot expand AO’s limited scrutiny

Taj Paul Bhardwaj Vs PCIT (ITAT Chandigarh)

Since AO passed the assessment order and accepted the return filed by assessee after examining the issue regarding increase in capital account as assessee had credited his capital account with agricultural income and the capital gain from sale of flats and had reflected that same in its capital account, therefore, CIT had exceeded jurisdi...

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Enquiry only on limited issues when case selected for limited scrutiny without approval of PCIT

CBS International Projects P. Ltd. Vs ACIT (ITAT Delhi)

CBS International Projects P. Ltd. Vs ACIT (ITAT Delhi) Assessing Officer can widen the scope of scrutiny even if it is selected for scrutiny assessment under CASS. However, the condition precedent for such action of the Assessing Officer is that he has to seek prior approval of the higher authorities. A perusal of the assessment [&hellip...

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