A finance ministry official told FE, “We are trying to simplify assessment methods. But at the same time, we plan to give more emphasis to the process of scrutiny of returns.” At present, only around 3% of all returns filed are selected for in depth scrutiny by tax authorities and the department wants to increase this number considerably.
The department's proposal to take up more scrutiny cases is a part of a larger plan to introduce more measures, to increase compliance amongst taxpayers and reduce cases of tax evasion.
Cases for scrutiny are taken up when an income tax officer is of the opinion that an assessee has concealed any income in his return or has filed inaccurate particulars.
A scrutiny notice can be served within one year from the end of the month in which an assessee files his returns.
According to sources, the decision to take up more cases for scrutiny is a part of the annual review of scrutiny norms by the Central Board of Direct Taxes, and the new guidelines would be notified soon.
Similarly, when the norms were reviewed last fiscal, the department had decided the selection of a return of income for scrutiny would be based on specific information and not merely on the whims of the officer.
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