As the deadline for selecting cases for Scrutiny nears, Department sending Scrutiny Notices

As the deadline for selecting the case of Financial Year 2014-15 nears, the department is sending the notices for Scrutiny. This year, not necessarily all the cases would be selected for complete and comprehensive scrutiny

Limited Scrutiny Notice- NO Need to Panic
Limited Scrutiny Notice

In most cases, especially where the case has been selected on the basis of some specific information from AIR (Annual Information Returns) or other data, the Scrutiny Notice may be titled as “Limited Scrutiny”. Normally such limited scrutiny notices are issued where the assessee has invested or traded in high volumes at any stock exchange; invested in any property exceeding Rs 30 lacs and not filed the income tax return ; made huge deposits in cash in any bank account


In case you have received any such notice, you need not panic


Before you decide to panic, read this article about what you should do if you get such an income tax notice. As the name itself suggests, the assessing officer is to collect the limited information pertaining to the given subject only


No Panic but be Diligent- That the notice is for limited query only should not make you complacent. You must share the information asked for in time and completely. It maynot be always required, if need be take some professional help


If the assessing officer is not satisfied or discovers something else in the return, he may, with the permission of his senior officers, convert the Limited Scrutiny case in Complete Scrutiny case and in that case, it may be problematic for you.

READ  Whether interest earned on margin received can be adjusted against interest paid on borrowings-Yes

limited scrutiny notice is not a cause for panic but must be attended diligently lest assessing officer converts it in complete scrutiny

How to Respond- As the format of the notice would also say, you may respond to such notices over email itself. By default the notice would be sent to the email you opted while filing the return, however, if you receive the notice, you have option to change the email or even appear in person to share information as may be required in the notice


Stern Instructions by CBDT

As Prime Minister in one his recent speeches had said that people in the country are more scared of Assessing officers than Police, CBDT has issued repeated advisories and warning to assessing officers not to exceed their scope of enquiry unless there is concrete evidence to suggest huge tax evasion


The assessing officer is supposed to limit the enquiry to the specified cases/ transactions only. The query that he would like to seek would be there on notice itself. Please respond to the particular query and only in case, he is not satisfied or needs some further information, he may send further questionnaire seeking more information or even to call you to appear in person.

Ensure Complete information- Seek Professional Help if required- Be careful and ensure that assessing officer is not given any incomplete information or inaccurate information that leads him to believe that there is potential undisclosed income which could exceed Rs 5 lakh (the limit is Rs 10 lakh for metro cities) in which case he can recommend the case for selection under ‘Complete Scrutiny’ with the approval of the income tax commissioner concerned.

READ  What are the Provisions for Re-opening an Assessment


If converted as Full Scrutiny-then the Assessing officer would have to conclude assessment as per guidelines of such complete scrutiny and has power to ask information on any aspect that he seems fit and relevant to the case. Therefore, this surely would be a headache for you and must be avaoided as far as possible