CBDT has issued Guidelines to All Principal Chief- Commissioners of Income – tax / Chief- Commissioner of Income -Tax & All Principal Director- Generals of Income tax / Director - Generals of Income - tax for compulsory selection of returns for Complete Scrutiny during Financial Year 2021-22 and conduct of assessment proceedings which are as under :

SR. NO.

PARAMETER

ASSESSMENT TO BE DONE BY

1.

Cases pertaining to survey u/s 133A of the income-tax Act, 1961

EXCLUSIONS Cases where books of accounts, documents, etc. were not impounded and returned income (excluding any disclosure made during the Survey) is not less than returned income of preceding assessment year are not required to be considered for compulsory scrutiny.

However, the said exclusion is not applicable where assessee has retracted from disclosure made during the Survey and such cases have to be considered for compulsory scrutiny.

Whether case have impounded material?

YES – by Central Charges u/s 127 of the Act within 15 days of issue of notice u/s 143(2) of the Act.

NO - by National Faceless Assessment Centre (NaFAC). The Assessing Officer shall upload the Survey Report in the ITBA at the time of issue of notice u/s 143(2) of the Act.

2.

Cases pertaining to Search and Seizure

Transferred to Central Charges u/s 127 of the Act within 15 days of issue of notice u/s 143(2)/142(1) of the Act.

3.

Cases in which notices u/s 142(1) of the Act, calling for return, have been issued

 

Whether Return is furnished in response to notice u/s 142(1) of the Act ?

 YES

(i)  where notice u/s 142(1) of the Act was issued due to the information contained in NMS Cycle/ AIR information/ information received from Directorate of I&Cl. – These cases will not be taken up for compulsory scrutiny and the selection of such cases for scrutiny will be through CASS cycle.

(ii) where notice was issued due to the specific information received from Law Enforcement Agencies, including the Investigation Wing; lntelligence/ Regulatory Authority/ Agency; Audit Objection; etc. – by NaFAC

 NO – by NaFAC

4.

Cases in which notices u/s 148 of the Act have been issued

Whether return is furnished in reponse to notice u/s 148 of the Act ?

YES – by NaFAC after issue of notice u/s 142(1) of the Act by Jurisdictional Assessing Officer.

NO – by NaFAC

5.

Cases related to registration / approval under various sections of the Act, such as 12A, 35(1) (ii) /(iia)/ (iii), 10 (23C), etc.

 

Where registration /  approval is cancelled / withdrawn by the Competent Authority but yet assessee is availing exemption / deduction in the return -  by NaFAC after issue of notice u/s 142(1) of the Act by Jurisdictional Assessing Officer.

However, if order of cancellation / withdrawal have been reversed / set – aside in appellate proceedings, it will not be included in this clause.

 

Without prejudice to the above, the cases which are selected for compulsory scrutiny by the International Taxation and Central Circle charges following the above prescribed guidelines, shall, as earlier, continue to be handled by these charges.

The exercise of selection of cases for compulsory scrutiny on the basis of the above parameters and service of notice u/s 143(2) of the Act will have to be completed by 30.06.2021. As per the amendments brought vide Finance Act,2021, the time limit for service of notice u/s 143(2) of the Act has been reduced to three months from the month of end of the Financial Year in which the return is filed.


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