Guidelines for selection of cases for scrutiny during 10-11

GUIDELINES FOR SELECTION OF CASES FOR SCRUTINY DURING 2010-11

1.    Selection of cases for scrutiny during the financial year 2010-11 will be done primarily through CASS this year. Manual Selection for scrutiny this year will be limited only to a few categories of cases listed below.

2.    List of cases selected during each month in accordance with the selection criteriamentioned below shall be submitted by theAssessing Officers to their respective Range heads by the 15^th of the following month and also displayed on the Notice Board of their office.

3.    These guidelines are meant only for the use of officers of the Income Tax Department. These are not be disclosed even if a request is made under the right to Information Act, in view of the decision of the Central Information Commission in the case of Shri Kamal Anand Vs Director (ITA-II), CBDT (Order No. CIC/AT/2007/00617 dated 21.02.2008).

SELECTION CRITERIA APPLICABLE TO ALL RETURNS AT ALL STATIONS:

a)    Value of international transaction as defined u/s 92b exceeds Rs. 15 crores.

b)    Cases involving addition in an earlier assessment year in excess of Rs.10 lacs on a substantial and recurring question of law or fact which is confirmed in appeal or is pending before an appellate authority.

c)    Cases involving addition in an earlier assessment year on the issue of transfer pricing in excess of Rs.10 Lakhs or more.

d)    Assessments in survey cases for the financial year in which survey was carried out This criteria will not apply if all of the following conditions are fulfilled:

(i)            There are no impounded books or documents.

(ii)           There is no retraction of disclosure made during the survey.

(iii)          Declared income, excluding any disclosure made during the survey, is nor less than the declared income of the preceding assessment year.

e)    Assessment in Search & Seizure cases to be made under sections 158B, 158BC, 158BD, 153A 153C & 143(3) of the IT Act.

f)     Assessments initiated under section 147 / 148 of the IT Act.

g)    Assessing Officer may select any return of scrutiny after recording the reasons and obtaining approval of the CCIT/DGIT. The cases under this category should be selected if there are compelling reasons and the case is not selected through CASS. There cases should be watched by CCIT / CIT in respect of the quality of assessment.

(F. NO. 225/93/2009/ITA.II)

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F.No.225/93/2009/ITA.II

‘New Delhi, the 8TH September, 2010.

To

All Chief Commissioners of Income-tax (CCA),

All Directors General of Income-tax;

Subject:- Central Action Plan – Identification of cases for scrutiny through manual selection for the year 2010-2011-regarding

Sir/Madam,

Reference is invited to Board’s-letter of even number dated 28.07.2010 on the subject above.

2.       The Board has decided to modify the aforesaid guidelines regarding selection of cases for scrutiny as under:

a)     In paragraph (c) of the aforesaid instruction, the words “ Rupees ten or more” were inadvertently mentioned, which may be read as “Rupees 10 crore or more”.

b)     The following additional category of cases may also be selected manually for Scrutiny:

“Returns of income of Trusts/ AOPs etc, filed in return form ITR-7 where gross receipts exceed Rs.5 crore”

c)     In partial modification of the Category (g) of guidelines dated 28.07.2010, wherein  CCIT/DGIT were  authorized to  approve selection of cases, the following decision has been taken:

I. The Assessing Officers in mufossil stations may select a maximum number of twenty five cases per A.0 after recording reasons for the selection and with the approval of the Addl. CIT/JCIT in charge of the Range* if the Addl.CIT/JCIT happens to be the senior most officer in the station. However if the senior most officer at the station is of the rank of Commissioner , approval in this regard shall be given by the Coinmissioner.

II. In other areas,; i.e. Metros and bigger cities where Income – Tax office is headed by an officer of the rank of Chief Commissioner/ Director General of Income Tax, Assessing Officers will manually selectcases for scrutiny after recording reasons for doing so with the prior approval of jurisdictional CCIT/ DGIT. The maximum number of cases selected for scrutiny shall, however, not exceed 10 (ten) per AO.

III. The authority giving approval for selection of cases for scrutiny as above shall monitor the cases approved by him/ her and ensure quality of assessments in these cases.

This may be brought to the notice of all the officers working in your region.

Source – Income Tax Department