Time and again the Central Board of Direct Taxes (CBDT) is giving clarifications regarding the Income Tax refunds and the process of selection of cases for scrutiny assessment. There is a misconception among the general public that the Income Tax Officers (ITOs) can pick up the cases for scrutiny as per their wish.
Here is the clarification by CBDT Chairperson, Ms.Anita Kapur, (as appeared in the media)
- The Income Tax department does not withhold refunds of small taxpayers nor does it generally select their tax returns for scrutiny and detailed analysis. In cases of neatly filed electronic Income Tax Returns (ITRs), the department has set a deadline of six months for refunds to be generated and sent to the taxpayer.
- she would like to bust the myth and “fear psychosis” that once people file their tax returns, they automatically come on the radar of the taxman and then they are tracked
- For large taxpayers, if it is a scrutiny case, then we have to hold it as per law till the scrutiny assessment is over but not for small taxpayers if their ITRs are all correct
- She said her second area of concern over which she would like to put the record straight is the version that taxman puts the cases of small and middle-category taxpayers on the scrutiny list which entails submission of additional documents and visits to the assessing I-T officer. Citing an example, she said no tax inspector can just go to a person, like a fruit-seller, and say he has to file his I-T return or that his return is going to be scrutinized.
- We are told that people are scared that once tax department knows about them after they have done filing (of ITR) then they are tracked and followed and they stay on the radar of the I-T department. We want to tell the taxpayers that only in less then one per cent cases you will be asked to come to the tax department for scrutiny of your case.
- And even this less than one per cent category is not discretionary selection by the assessing officer. It is a computer-based programme where risk parameters are fed in, algorithm is developed, and based on that cases get selected.
Also Read :
- Scrutiny notice (CASS) u/s 143(2) of income tax AST – Instruction No. 138
- Limited Scrutiny selected under Computer Assisted Scrutiny Selection (CASS)
- Income Tax Scrutiny Criteria for Financial Year 2015-16
- Does the Income Tax Officer have the discretionary powers to take up scrutiny of IT returns?
- Can Income Tax department issue refunds pending scrutiny assessments
- Information sought by ITO during scrutiny assessment u/s 142(1)