The income tax department has provided the rules for the selection of income tax returns for complete scrutiny in the present financial year and mentioned these investigations shall be subjected in the matters where the information of the tax theft is available from any other council.
Latest Update in Returns Scrutiny
- CBDT (Central Board of Direct Taxes) department has issued new guidelines for mandatory income tax return selection related to full scrutiny during the financial year 2022-23 (Annual Year 2023-24).
The rules for the selection for the whole scrutiny sum on another limb of taking before administrative approval of the Principal Commissioner/ Principal Director/ Commissioner / Director in some cases, for the selection of these cases for complete scrutiny.
For example, the cases of surveys and cases in which the exemption has been claimed by the charitable trusts without a valid approval are made as per the prior approval before transmission to the national faceless tax assessment centre (NaFAC) to furnish needed scrutiny notices.
Beneath the investigation, a comprehensive investigation of the income return would be performed by tax officers to confirm the genuineness of several claims, deductions, etc that an assessee made.
The major goal of the same is to confirm that the assessee does not know the income, calculated much more loss, or underpaid the tax in any case. Tax experts mentioned that the cases engaging the recurring problems of law are for the complete investigation only where the addition in the former assessments surpasses the limit of Rs 25 lakh towards assessee in eight metro cities and Rs 10 lakh in the other cities, through prior approval.
“Cases pertaining to tax evasion where information is available from enforcement agencies have also been brought within the net of compulsory complete scrutiny under Income tax provisions.”
“He added The insertion of the need to obtain prior approval and ascribing thresholds could be seen as a right step towards the efforts to reduce litigation and channelisation of taxman’s efforts towards more critical cases, he said.”
Tax experts mentioned that the cases in which any details towards the tax theft are available from any council shall be in respect of a complete investigation.
The tax expert specified that CBDT posts internal guidelines for the investigation every year. The same is mentioned that a return filed because the notice relies on SFT (Statement of Financial Transactions) compliance details, these returns shall not be chosen for the mandatory investigation.
“These instructions will provide additional clarity to both the government vis-à-vis assessee in terms of understanding the actual basis for scrutiny selection, a tax expert stated.”
