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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Non-seeking of permission for conversion of limited scrutiny to complete scrutiny not makes assessment order passed erroneous  

Binod Kumar Mahato Vs PCIT (ITAT Kolkata) - Binod Kumar Mahato Vs PCIT (ITAT Kolkata) The reasons for scrutiny selection through CASS, is to examine the cash deposits in savings bank account, as these are more than the turnover. The Assessing Officer stuck to these reasons and completed the assessment u/s 143(3) of the Act. Aggrieved with thi...

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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 authoriti...

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Addition on directly related ground valid in case of Limited Scrutiny

Sukumar Mondal Vs ITO (ITAT Kolkata) - Addition made by AO on account of profit allegedly earned by assessee on undisclosed turnover was directly related to the ground on which the case of the assessee was selected for limited scrutiny. Since same being fall-out of the verification made by AO on issue, on which case of assessee was selec...

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ITAT deletes addition on issue, not part of reasons for limited scrutiny

Spooner Industries P Ltd Vs ITO (ITAT Delhi) - Spooner Industries P Ltd Vs ITO (ITAT Delhi) Addition made by the ld. AO and confirmed by the ld. CIT (Appeals) under Section 68 of the Act deserves to be deleted for the reason that ( 1) it was not part of reasons for limited scrutiny, ( 2) no enquiries made by the Assessing Officer […]...

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AO cannot expend scope of limited Income tax scrutiny

JDB Finance Vs DCIT (ITAT Kolkata) - Where case of assessee was selected for limited scrutiny on issue of mismatch of sales shown in the audit report vis-à-vis tax return but AO expanded the scope of limited scrutiny by making addition for alleged speculation loss under section 43(5) without taking permission from the concerned Pr.CIT...

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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"

Non-seeking of permission for conversion of limited scrutiny to complete scrutiny not makes assessment order passed erroneous  

Binod Kumar Mahato Vs PCIT (ITAT Kolkata)01/01/1970

Binod Kumar Mahato Vs PCIT (ITAT Kolkata) The reasons for scrutiny selection through CASS, is to examine the cash deposits in savings bank account, as these are more than the turnover. The Assessing Officer stuck to these reasons and completed the assessment u/s 143(3) of the Act. Aggrieved with this order, the assessee carried the [&hell...

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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)01/01/1970

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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Addition on directly related ground valid in case of Limited Scrutiny

Sukumar Mondal Vs ITO (ITAT Kolkata)01/01/1970

Addition made by AO on account of profit allegedly earned by assessee on undisclosed turnover was directly related to the ground on which the case of the assessee was selected for limited scrutiny. Since same being fall-out of the verification made by AO on issue, on which case of assessee was selected for limited scrutiny, there was no m...

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ITAT deletes addition on issue, not part of reasons for limited scrutiny

Spooner Industries P Ltd Vs ITO (ITAT Delhi)01/01/1970

Spooner Industries P Ltd Vs ITO (ITAT Delhi) Addition made by the ld. AO and confirmed by the ld. CIT (Appeals) under Section 68 of the Act deserves to be deleted for the reason that ( 1) it was not part of reasons for limited scrutiny, ( 2) no enquiries made by the Assessing Officer […]...

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AO cannot expend scope of limited Income tax scrutiny

JDB Finance Vs DCIT (ITAT Kolkata)01/01/1970

Where case of assessee was selected for limited scrutiny on issue of mismatch of sales shown in the audit report vis-à-vis tax return but AO expanded the scope of limited scrutiny by making addition for alleged speculation loss under section 43(5) without taking permission from the concerned Pr.CIT/CIT, order of AO was set aside....

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CIT cannot ask AO to look beyond purview of limited scrutiny

Storewell Construction & Engineers Vs PCIT (ITAT Pune)01/01/1970

The Ld. Pr. Commissioner of Income Tax wants the Assessing officer to look into various other issues of the assessee which were not covered within the purview of the...

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CIT cannot expand limited scrutiny by section 263 Order

Sonali Hemant Bhavsar Vs PCIT (ITAT Mumbai)01/01/1970

Sonali Hemant Bhavsar Vs PCIT (ITAT Mumbai) We observe from the notice issued under section 143(2) of the Act for limited scrutiny dated 19.09.2016 and find merits in the contentions of the assessee that the said limited scrutiny can not be expanded unless the AO converted it into complete scrutiny with the approval of Ld. […]...

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AO cannot travel beyond the reason for selection of matter for limited scrutiny 

Balvinder Kumar Vs PCIT (ITAT Delhi)01/01/1970

Balvinder Kumar Vs PCIT (ITAT Delhi) There is no dispute that the case of the assessee was picked up for scrutiny under the category of limited scrutiny. This fact is established from the assessment order and also the notice issued under section 143(2) of the Act. CBDT instructions and the letter clearly establish that it’s […]...

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

Manju Kaushik Vs DCIT (ITAT Jaipur)01/01/1970

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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