Call Guidelines for Compulsory Scrutiny of Returns for AY 2024-25
Scrutiny under income tax means a detailed examination and verification of a taxpayer’s income tax return. This is done by income tax authorities like assessing officers, CITs or DCITs, other principal officers or even through Computer-Assisted Scrutiny Selection.
On 3rd May, 2024 CBDT has issued new guidelines regarding compulsory selection of returns for complete scrutiny during the financial year 2024-25 and procedure for compulsory selection in such cases.
The CBDT has provided certain parameters and procedure of selection of cases based on such parameters.
Important Guidelines and the associated procedure to follow:
- Cases Pertaining to Survey under Section 133A of the Income-tax Act, 1961:
Administrative approval is required in survey under section 133A related cases. They would be transferred to central stage within 15 days of serving notice.
- Cases pertaining to Search and Seizure:
Administrative approval is required in search and seizure cases conducted before and after April 1, 2021. They would be transferred to central stage within 15 days of serving notice.
- Cases under which Section 142(1) & 148 Notices are issued:
Cases where no return has been furnished in response to notices under Section 142(1) and cases where notices under Section 148 have been issued will be scrutinized. Administrative approval will be required. They would be transferred to central stage within 15 days of serving notice.
- Cases related to registration/approval under various sections 12A,12AB, Section 35etc.:
A consolidated list of such cases shall be submitted after prior administrative approval.
AO shall upload underlying documents (if any) containing specific information in such cases.
- Cases regarding addition in earlier assessment years on a recurring issue of law or fact where
Addition amounts are exceeding Rs.25 Lakhs in metro cities and Rs.10 lakhs in non-metro cities:
A consolidated list of such cases shall be submitted after prior administrative approval.
AO shall upload underlying documents (if any) containing specific information in such cases.
- Cases related to specific information related to tax evasion:
A consolidated list of such cases shall be submitted after prior administrative approval.
AO shall upload underlying documents (if any) containing specific information in such cases.
Handling of such cases:
Cases selected for compulsory scrutiny by International taxation and Central Circle charges are handled by respective units, while those not covered under search and seizure action are not required to transfer to central charges.
Selection and transfer of such cases:
- Notice under section 143(2):
This notice is to be served in cases selected for compulsory scrutiny by 30 June 2024.
- NaFAC:
Cases mentioned above will be selected by department and the same will be transferred to faceless assessment to NaFAC by 30 May 2024.
Conclusion:
CBDT has provided these guidelines to ensure effective tax administration and compliance, streamlining assessment procedures. The focus in the guidelines has been on transferring such cases for faceless assessments and serving upon them notices. The guidelines are drafted in a manner where procedure to follow by the authorities is laid down based on certain parameters for the ease of process.
About Author:
CA Chinmay Shirish Agate
Chinmay Agate is a Practicing Chartered Accountant having 4+ years of experience and expertise in the field of Direct Taxation and Auditing compliances. In the past, he worked in various CA firms and comes with wide industry experience from services, retail to manufacturing to trading where he has handled various complex assignments. He has keen interest in Forex and Derivative knowledge as well as fundamental analysis.