CBDT lays down guidelines for processing Scrutiny Cases for AY 14-15 selected under CASS

Income Tax Scrutiny Notice 143(2)The CBDT has announced norms for scrutinizing the cases selected under CASS. Taking note of the fact that quite often the assessing officers go astray during the scrutiny of the case and do not focus on parameter under which the case was triggered for selection for scrutiny assessment and often take a longer time.

It was also observed that often Assessing Officers start focussing on other areas not relevant to the issue for which the case was selected.

With present guidelines, the CBDT has laid down guidelines making mandatory for assessing officer to seek prior permission before expanding the scope of areas under scrutiny

The text of the CBDT Order is reproduced below for benefit of the readers.

It has come to the notice of the Board that during the scrutiny assessment proceedings some of the AOs are routinely calling for information which is not relevant, for enquiry into the issues to be considered. This has been causing undue harassment to the taxpayers and has also drawn adverse criticism from several quarters. Further, feedback and analysis of such readers indicates that many times the core issues, which formed the basis of selection of the case for scrutiny were not examined properly. Such instances primarily occurred in cases selected for scrutiny under Computer Aided Scrutiny Selection (‘CASS’) for verification of specific information obtained from third party sources which apparently did not match with the details submitted by the tax aver in the return of Income.

2. Therefore, for proper administration of the Income-tax Act, 1961 (‘Act’), Central Board of Direct Taxes, by virtue of its powers under sect on 119 of the Act, in supersession of earlier instructions/guidelines on this subject, hereby directs that the cases selected for scrutiny during the Financial Year 2014-20(15 under CASS, on the basis of either AIR data or CIB information or for non-reconciliation with 26AS data the scope of enquiry should be limited to verification of these particular aspects only. Therefore, in such cases, an Assessing Officer shall confine the questionnaire and subsequent enquiry or verification only to the specific point(s) on the basis of which the particular return has been selected for scrutiny.

3. The reason(s) for selection of cases under CASS are displayed to the Assessing Officer in AST application and notice u/s 143(2), after genera ion from AST, is issued to the taxpayer with the remark ‘Selected under Computer Aided Scrutiny Selection (CASS)”. The functionality in AST is being modified suitably to flag the reasons for scrutiny selection in AIR/CIB/26AS cases. This functionality is expected to be operationalized by 15 th October, 2014. Further, the Assessing Officer while issuing notice under section 142(1) of the Act which is enclosed with the first questionnaire would proceed to verify only the specific aspects requiring examination/verification. In such cases, all efforts would be mad to ensure that assessment proceedings are completed expeditiously in minimum possible number of hearings without unnecessarily dragging the case till the time-barring date.

4. In case, during the course of assessment proceedings it is found that there is potential escapement of income exceeding Rs. 10 lakhs (f non – metro charges, the monetary limit shall be Rs. 5 lakhs) on any other issue(s) apart from the AIR/CIB/26AS information based on which the case was elected under CASS requiring substantial verification, the case may be taken up for comprehensive

scrutiny with the approval of the Pr. CIT/DIT concerned. However, such an approval shall be accorded by the Pr. CIT/DIT in writing after being satisfied about merits of the issue(s) necessitating wider and detailed scrutiny in the case. Cases so taken up for detailed scrutiny shall be monitored by the it. CIT/Addl. CIT concerned.

5. The contents of this Instruction should be immediately brought to the notice of all concerned for strict compliance.

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