Income Tax Scrutiny Criteria
The Central Board of Direct Taxes (CBDT) has issued its annual guidelines for compulsory selection of income tax (I-T) returns for the purpose of complete scrutiny. These pertain to the selection and complete scrutiny that is to be undertaken during the current financial year 2022-23 and cover survey cases, search & seizure cases, and cases where no I-T return was filed in response to an inquiry notice under section 142(1).
It also covers cases relating to non-registration or cancellation of registration under various sections, those relating to additions made on recurring issues of law or fact and, finally, cases where specific information on tax evasion has been received. The guidelines also prescribe the role and responsibilities of the I-T officers and the National Faceless Assessment Centre (NFAC).
Complete scrutiny is a regular feature carried out in selective cases. With technology enabling better flow of information between agencies within the country and from other countries, the number of such cases picked up for scrutiny are on the rise over the past few years, claim government officials.The CBDT continues to focus its attention on charitable trusts and institutions. For instance, if an institution was denied approval under section 10(23C) or the approval given was withdrawn but tax exemption continued to be claimed, then such a case would be picked up for scrutiny.
Thus, institutions like hospitals and educational institutions are likely to face scrutiny. Similarly, if a charitable trust was not given registration under section 12A or the registration was cancelled but exemption was claimed, the case would be picked up.Given that assessments are now faceless and that the time frame for service of notice under section 143(2) — relating to discrepancies in the I-T return — has been reduced to three months from the end of the financial year in which the return is filed, the selection and transfer of cases for complete scrutiny to the NFAC shall be completed by May 31, and service of notice by June end.
Team Edu-Visor
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