In one of my previous articles, I had mentioned about the criteria for selection of cases for scrutiny at Income Tax department. The department issue notices under Computer Aided Scrutiny Selection (CASS) to the taxpayers based on the information gathered from Annual Information Returns (AIR). Also, the department picks up cases from the information directly gathered by Central Information Branch (CIB). Apart from the above, the department conducts compulsory scrutiny of Income Tax returns based on specified parameters. During financial year 2014-15, the department has announced the criteria (vide the Instruction 6/2014 dated 3rd Sept 2014) for selection of returns/cases for scrutiny. The list is as under-
- 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 appellate authority.
- Cases involving addition in an earlier assessment year on the issue of transfer pricing in excess of Rs. 10 Crore or more on a substantial and recurring question of law or fact which is confirmed in appeal or is pending before an appellate authority.
- All assessments pertaining to Survey under section 133A of the Act excluding the cases where there are no impounded books of accounts/documents and returned income excluding any disclosure made during the Survey is not less than returned income of preceding assessment year. However, where assessee retracts the disclosure made during the Survey will not be covered by this exclusion.
- Assessments in search and seizure cases to be made under section 158B, 158BC, 158BD, 153A & 153C read with section 143(3) of the Act and also for the returns filed for the assessment year relevant to the previous year in which authorization for search arid seizure was executed u/s 132 or 132A of the Act.
- Returns filed in response to notice under section 148 of the Act.
- Cases where registration u/s 12AA of the IT Act has not been granted or has been cancelled by the CIT/DIT concerned, yet the assessee has been found to be claiming tax-exemption under section 11 of the Act. However, where such orders of the CIT/DIT have been reversed/set-aside in appellate proceedings, those cases will not be selected under this clause.
- Cases where order denying the approval u/s 10(23C) of the Act or withdrawing the approval already granted has been passed by the Competent Authority, yet the assessee has been found claiming tax-exemption under the aforesaid provision of the Act.
- Cases in respect of which specific and verifiable information pointing out tax evasion is given by Government Departments/Authorities. The Assessing Officer shall record reasons and take prior approval’ from jurisdictional Pr. CCIT/CCIT /Pr. DGIT/DGIT concerned before selecting such a case for scrutiny
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