The Central Board of Direct Taxes (CBDT) has issued comprehensive guidelines prescribing the categories of Income Tax Returns (ITRs) that will be compulsorily selected for Complete Scrutiny during the Financial Year 2025-26. The guidelines, issued through F. No. 225/37/2025/ITA-II dated 13 June 2025, lay down the specific parameters, approval mechanism, and procedural requirements for scrutiny selection.
The move is aimed at ensuring focused examination of high-risk cases involving survey actions, search and seizure proceedings, cancelled registrations, recurring tax disputes, and specific tax evasion information received from enforcement agencies.
Six Categories Selected for Compulsory Scrutiny
1. Survey Cases (CS-01)
Returns of taxpayers subjected to a survey under Section 133A of the Income-tax Act on or after 1 April 2023 will be compulsorily selected for scrutiny. However, surveys conducted under Section 133A(2A) are excluded from this category.
2. Search and Seizure Cases (CS-02)
Cases involving search under Section 132 or requisition under Section 132A conducted between 1 April 2023 and 31 March 2025 have been earmarked for compulsory scrutiny. The scrutiny process will be undertaken after obtaining administrative approval from the competent authority.
3. Registration or Approval-Related Cases (CS-04)
CBDT has directed scrutiny of cases where registration or approval granted under provisions such as Sections 12A, 12AB, 35(1)(ii), 35(1)(iia), 35(1)(iii), and Section 10(23C) has either not been granted or has been cancelled or withdrawn before 31 March 2024, but the taxpayer has continued to claim exemption or deduction in the return filed in Form ITR-7. Cases where appellate authorities have restored such registrations will not be covered.
4. Recurring Addition Cases (CS-05)
Returns may also be selected where additions made in earlier assessment years on recurring issues of law or fact have attained finality or have been upheld by appellate authorities. The threshold has been fixed at ₹50 lakh for eight metro jurisdictions and ₹20 lakh for other jurisdictions.
5. Specific Tax Evasion Information (CS-06)
Cases based on specific information pointing to tax evasion received from law enforcement agencies, intelligence units, investigation wings, or regulatory authorities will be compulsorily scrutinised if the taxpayer has filed a return for the relevant assessment year.
Clarification on AIS, SFT and NMS Information
CBDT has clarified that where returns are filed in response to notices issued under Section 142(1) solely because of information available through the Non-Filer Monitoring System (NMS), Annual Information Statement (AIS), Statement of Financial Transactions (SFT), CPC-TDS data, or information from the Directorate of Income Tax (I&CI), such cases will not automatically fall under compulsory scrutiny. Their selection will instead be considered through the regular Computer Assisted Scrutiny Selection (CASS) process.
Cases Requiring Notice Under Section 143(2)
The guidelines also cover cases where reassessment notices under Section 148 have been issued and returns have either been filed or not filed. Such cases are required to be handled through the National Faceless Assessment Centre (NaFAC), with underlying documents uploaded by the jurisdictional assessing officers.
Special Provisions for International Taxation and Central Charges
CBDT has clarified that International Taxation and Central Circle charges may independently select cases for compulsory scrutiny based on the prescribed parameters after obtaining administrative approval. Such cases will continue to be handled by the respective authorities instead of NaFAC.
Important Deadline
The Board has reminded field officers that under the proviso to Section 143(2) of the Income-tax Act, notices for returns filed during FY 2024-25 and selected for compulsory scrutiny must be served on or before 30 June 2025.
Conclusion
The latest CBDT guidelines provide greater clarity on the categories of taxpayers that will face mandatory scrutiny and the procedures to be followed by assessing officers. Taxpayers falling within these specified risk parameters should ensure that their records, claims, and supporting documentation are in order to facilitate smooth assessment proceedings and avoid potential disputes.
Click here to view/download the official copy of the notification
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