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Thursday 31 December 2015

Streamlining scrutiny assessment proceedings and facilitating



Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes

PRESS RELEASE

New Delhi, 31st December, 2015

Subject: Streamlining scrutiny assessment proceedings and facilitating electronic communication – regarding

The Income Tax Department is committed to providing fair and transparent tax administration and continuously improve taxpayer services.

Taking another step in this direction, Central Board of Direct Taxes (CBDT) has issued instructions to the assessing officers to be specific in enquires made in the case of tax payers whose returns are under scrutiny. The directions are comprehensive and cover cases selected through Computer Aided Scrutiny Selection (CASS) for limited scrutiny for verification of information contained in Annual Information Return (AIR)/ Form no 26AS or received through Central Information Branch, or complete scrutiny. The assessing officers have been advised to inform the assessee forthwith of the reasons for limited scrutiny, confine enquiries on the specific points for which the case has been selected and conclude the proceedings expeditiously in a limited number of hearings. Cases selected for limited scrutiny can be converted to complete scrutiny only with the approval of the Principal Commissioner of Income Tax/ Commissioner of Income tax if the potential income escaping assessment exceeds a certain monetary limit. In all cases the initial notice will be accompanied with a specific questionnaire. Any addition to income or disallowance of deductions will be made only after following due process of natural justice.

The Department has also initiated a pilot project for carrying out an e-mail based scrutiny assessment in select cases of non-corporate charges at Delhi, Mumbai, Bengaluru, Ahmedabad and Chennai. Through this pilot, the Department endeavours to completely remove the need for the taxpayer to visit the offices of the Department while moving towards paperless scrutiny assessment proceedings.

Separately, the CBDT has directed all its officers to mention e-mail address and phone numbers in all communications to facilitate electronic interface of the taxpayer with the Department.

These recent measures are steps towards obviating the need for avoidable personal interface with the Department and ushering in a non-adversarial tax regime.

The communications issued by CBDT are available on the website of the Department at www.incometax.gov.in .

(Shefali Shah)
Pr. Commissioner of Income Tax (OSD)
Official Spokesperson, CBDT

Electronic filing of first appeal before CIT(Appeals)



Government of India Ministry of Finance
Department of Revenue
Central Board of Direct Taxes

PRESS RELEASE

New Delhi, 30th December, 2015

Subject: Electronic filing of first appeal before CIT(Appeals) – reg.

It is the endeavour of the Income tax Department to digitise various functions of the Department for providing efficient taxpayer services. As another significant step in this direction, electronic filing of appeal before CIT(Appeals) is being made mandatory for persons who are required to file the return of income electronically.

Electronic filing of appeal along with the documents relied upon before CIT (Appeals) will remove human interface, reduce paperwork and decrease the transaction cost for the taxpayer. It would ensure consistent and error free service as validations will be inbuilt resulting in fewer deficient appeals. Online filing will also facilitate fixation of hearing of appeals electronically.

The existing Form 35 for filing of first appeal is being substituted by a new Form. The new format for filing of appeals is more structured, objective, systematic, and aligned with the current provisions of the Income-tax Act.

With these changes, the burden of compliance on the taxpayers in appellate proceedings will be significantly reduced.

(Shefali Shah)
Pr. Commissioner of Income Tax (OSD)
Official Spokesperson, CBDT

Wednesday 30 December 2015

Scrutiny Assessments-some important issues



Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
North Block, New Delhi
Instruction No. 20/2015

Dated-29th of December, 2015

Subject: Scrutiny Assessments-some important issues and scope of scrutiny in cases selected through Computer Aided Scrutiny Selection (‘CASS’)-reg .- 

The Central Board of Direct Taxes (‘CBDT’) , vide Instruction No. 7/2014 dated 26 09.2014 had clarified the extent of enquiry in certain category of cases specified therein , which are selected for scrutiny through CASS . Further clarifications have been sought regarding the scope and applicability of the aforesaid Instruction to cases being scrutinized.

2. In order to facilitate the conduct of scrutiny assessments and to bring further clarity on some of the issues emerging from the aforesaid Instruction, following clarifications are being made.

i    Year of applicability : As stated in the Instruction No. 7/2014 , the said Instruction is applicable only  in respect of the cases selected for scrutiny through CASS-2014

ii   Whether the said Instruction is applicable to al l cases selected under CASS : The  said Instruction is applicable where the case is selected for scrutiny under CASS only on the parameter(s ) of AIR /CIB/26AS data . If a case has been selected under CASS for any other reason(s)/parameter (s) besides the AIR /CIB/26AS data , then the said  Instruction  would  not apply.

iii   Scope of Enquiry : Specific issue based enquiry is to be conducted only in those scrutiny cases which have been selected on the parameter(s ) of AIR/CIB/26AS data . In such cases , the Assess ing Officer , shall also confine the Questionnaire only to the specific issues pertaining to AIR/CIB/26AS data . Wider scrutiny in these cases can only be conducted as per the guidelines and procedures stated in Instruction No. 7/2014.

iv Reason for selection: In cases under scrutiny for verification of AIR/CIB/26AS data , the Assessing Officer has to intimate the reason for selection of case for scrutiny to the assessee concerned.

3. As far as the returns selected for scrutiny through CASS-2015  are concerned , two type of cases have been  selected for scrutiny  in the  current  Financial  Year- one  is ‘Limited  Scrutiny’  and other  is ‘Complete  Scrutiny’ .  The  assessees  concerned  have  duly  been  intimated  about  their  cases falling either in ‘Limited Scrutiny’ or  ‘Complete Scrutiny’ through notices issued under  section  143(2) of the Income-tax Act, 1961 (‘Act’). The procedure for handling ‘Limited Scrutiny’ cases shall be as under:

a. In ‘Limited Scrutiny ‘ cases , the reasons/issues shall be forthwith communicated to the assessee concerned.

b. The Questionnaire under section 142( 1) of the Act in ‘Limited Scrutiny ‘ cases shall remain confined only to the specific reasons/issues for which case has been picked up for scrutiny . Further . the scope of enquiry shall be restricted to the ‘Limited Scrutiny ‘ issues.

c. These cases shall be completed expeditiously in a limited number of hearings.

d. During the course  of  assessment  proceedings  in ‘ Limited  Scrutiny ‘  cases,  if  it comes  to  the notice of  the  Assessing  Officer  that  there  is  potential escapement  of  income  exceeding Rs. five  lakhs  (for  metro charges , the  monetary  limit shall  be Rs. ten  lakhs) requiring  substantial verification on any other issue(s) , then , the case may be taken up for ‘Complete Scrutiny ‘ with the approval of the Pr. CIT/CIT concerned . However , such an approval shall be accorded by the by the Pr. CIT/CIT in writing after being satisfied about merits of the issue(s)  necessitating ‘Complete Scrutiny’ in that particular case. Such cases shall be monitored by the Range Head concerned . The procedure indicated at points (a), (b)  and (c)  above  shall  no  longer  remain binding in such cases. (For the present purpose, ‘Metro charges ‘ would mean  Delhi,  Mumbai, Chennai,   Kolkata,   Bengaluru,  Hyderabad  and  Ahmedabad ).

4. The Board further desires that in all cases under scrutiny, where the Assessing Officer proposes to make additions or disallowances , the assessee would be given a fair opportunity to explain his posit ion on the proposed additions/disallowances in accordance with the principle of natural justice . In this regard, the Assessing Officer shall issue an appropriate show-cause notice duly indicating the reasons for the proposed additions/disallowances  along with  necessary  evidences/reasons forming the basis of the same . Before passing the final order against the proposed additions/disallowances due consideration shall be given to the submissions made by the assessee in response to the show­ cause notice.

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

6. Hindi version to follow.

(Ankita Pandey)
Under Secretary to Government of India
(F. No. 225/269/2015-ITA.II)

Tuesday 29 December 2015

Issuing Questionnaire in cases selected for scrutiny



Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
North Block, New Delhi
Instruction No. 19/2015

Dated the 29th of December, 2015
To

All Pr. Chief-Commissioners of Income-tax/
Chief-Commissioners  of Income-tax
All Pr. Directors-General  of Income-tax/
Directors-General  of Income-tax

Subject- Issuing Questionnaire in cases selected for scrutiny- regarding 

Sir/Madam

Instances have come to the notice of the Board that in cases selected under scrutiny, while issuing the first notice, Assessing Officers do not convey the specific compliance requirements like production of accounts, furnishing of documents, information, evidences, submission of other requisite particulars etc. Since the taxpayers or their authorized representatives are required to comply with the statutory notice issued by the Assessing Officer, they remain clueless about the information required to be submitted and their appearance before the Assessing Officer does not serve any fruitful purpose except recording of their presence. This causes undue hardship to the taxpayers and unnecessary wastage of their time.

2. Since the CASS cycles are proposed to be run well in advance now, sufficient time shall be available with the Assessing Officers to go through the returns of income which have been  selected for scrutiny and identify the  issues which  require  examination. Therefore,  in  cases  selected for scrutiny, it should be the endeavour of the Assessing Officer that the initial notice  issued  under section 143(2) of the Income-tax Act, 1961 is accompany a notice under section  142(1) along with the  questionnaire  containing  details  of  specific  documents/information/evidences etc. that are required to be furnished  by  the  taxpayer  in  connection  with  scrutiny  assessment  proceeding  in their respective case.

3. All the Assessing Officers are required to comply with the above directions.

4. Hindi version to follow.

(Ankita Pandey)
Under Secretary to Government of India
(F.No. 225/328/2015-ITA-11)