Comparative Scrutiny Guidelines

1 Comparat\bve \fcrut\bny Gu\bdel\bnes SL. No. Financial \bear 2\f\f7-\f8 Financial \bear 2\f\f6-\f7 0\b All a\f\fe\f\fment pertaining to \fearch and \feizure ca\fe\f. All a\f\fe\f\fment pertaining to \furvey\f conducted u/\f \b33A of the Income tax Act. All a\f\fe\f\fment pertaining to \furvey, \fearch and \feizure ca\fe\f 02 All return\f where deduction claimed under Chapter VIA of the Income tax Act i\f R\f. 25 lakh\f or above in \ftation\f other than the citie\f on computer network All return\f where deduction claimed under chapter VIA of the I.T. Act i\f R\f. \b0lakh (R\f.5 lakh\f for non corporate) or above in \ftation\f other than 60 citie\f on computer network 03 All return\f, including tho\fe of non- re\fident\f, where refund claimed i\f R\f. 5 lakh\f or above in \ftation\f other than the citie\f on computer network All return\f where refund claimed i\f R\f 5 lakh or above in \ftation\f other 60 citie\f on computer network. 04 (a) All ca\fe\f in which the CIT (Appeal\f) or ITAT ha\f confirmed an addition / di\fallowance of R\f.5 lakh\f or above or if the a\f\fe\f\fee ha\f conceded an addition in any proceeding A\f\fe\f\fment year and Identical i\f\fue i\f ari\fing in the current year. But if the i\f\fue involve\f a \fub\ftantial que\ftion of law, the ca\fe\f may be picked up for \fcrutiny irre\fpective of the quantum of tax involved. However, if the addition ha\f been deleted by a \fuperior appellate authority and the Department ha\f accepted that deci\fion, the ca\fe need not be taken up for \fcrutiny. (b) All ca\fe\f in which an appeal i\f pending before the CIT (Appeal) again\ft an addition / di\fallowance of R\f.5 lakh\f or above, or the department ha\f filed an appeal before the ITAT All ca\fe\f in which the CIT (appeal\f) or ITA ha\f confirmed and addition di\fallowance of R\f 5 lakh. Or above in any preceding a\f\fe\f\fment year and identical i\f\fue i\f ari\fing in the current year. 2 again\ft the order of the CIT (Appeal) deleting \fuch an addition / di\fallowance and an identical i\f\fue i\f ari\fing in the current year. However, a\f in (i) above, the quantum ceiling may not be taken into account if a \fub\ftantial que\ftion of law i\f involved 05 All return\f filed by \ftatutory bodie\f, marketing committee\f and other authoritie\f a\f\fe\f\fable to income tax 06 All ca\fe\f of bank\f and Non- banking financial in\ftitution\f with depo\fit\f of R\f. 5 crore\f and above All bank\f and public \fector undertaking\f 07 Ca\fe\f of univer\fitie\f , educational in\ftitution\f, ho\fpital\f, nur\fing home\f and other in\ftitution\f for rehabilitation of patient\f (other than tho\fe, which are \fub\ftantially financed by the Government), the aggregate annual receipt\f (including donation\f credited to the corpu\f / any other fund) of which exceed R\f \b0 crore\f in Delhi, Mumabi, Chennai, Kolkota, Pune, Hyderabad, Bangalore and Ahmedabad and R\f. 5 crore\f in other place\f (Ref. S \b0 (23c) & Rule 2 BC) 08 All ca\fe\f where exemption i\f claimed under \fection \b\b of Income Tax Act and the gro\f\f receipt\f (including donation\f credited to the corpu\f / any other fund) exceed R\f. 5 crore\f in Delhi, Mumbai, Chennai, Kolkata, Pune, Hyderabad, Bangalore and Ahmedabad and R\f. \b crore\f in other Place\f 3 09 (a) All ca\fe\f where total value of International Tran\faction\f (a\f defined u/\f 92 B of the Income tax Act) exceed R\f.\b5 crore\f) (b) In all other ca\fe\f where the Tran\ffer Pricing Audit carried out in the earlier year had led to an adju\ftment / addition to the total income \b0 All ca\fe\f of \ftockbroker\f and commodity broker\f a\f well a\f their \fub broker\f where brokerage received i\f di\fclo\fed at R\f. \b crore or above. All ca\fe\f of \ftockbroker\f and commodity broker\f a\f well a\f their \fub broker\f where there are claim\f of bad debt\f of R\f. 5 lakh\f or more All ca\fe\f of \ftockbroker\f (including \fub- broker\f) where brokerage received i\f di\fclo\fed at R\f. R\f. \b crore (R\f. 50 lakh\f for non corporate) or above and total income declared i\f le\f\f than \b0% of \fuch brokerage or in which bad debt\f of R\f. \b0 lakh (R\f. 5 lakh\f for non corporate) or more have been claimed \b\b All cases of professionals with gross receipts of Rs.2\f lakhs or more if total income declared is less than 2\f% of gross professional receipts All profe\f\fional\f who\fe gro\f\f receipt\f exceed Rs1\f lakh but income declared i\f le\f\f than 20% of the amount \b2 All ca\fe\f of deduction\f under \fection\f \b0 A / \b0 AA / \b0BA / \b0 B of the I.T. Act exceeding Rs.25 lakhs. All ca\fe of deduction under \fection\f \b0A and or \b0B of the I.T.Act with export turnover exceeding R\f. 5 crore\f for Non Corporate. \b3 All ca\fe\f of contractor\f (excluding transporters) who\fe gro\f\f contractual receipt\f exceed R\f. \b crore\f if total income declared from contract work i\f le\f\f than 5% of gro\f\f contractual receipt\f All ca\fe\f of contractor\f who\fe gro\f\f contractual receipt\f exceed\f R\f. 2 crore (R\f. \b crore for non corporate) in place\f other than 60 citie\f on computer network if total income declared i\f le\f\f than 5% of gro\f\f contractual receipt\f \b4 All ca\fe\f of builder\f following project completion method. All ca\fe\f of builder\f following project completion method \b5 All ca\fe\f in which fre\fh capital All ca\fe\f in which fre\fh capital 4 introduced during the year exceed R\f.50 lakh\f in Delhi, Mumbai, Chennai, Kolkata, Pune, Hyderabad, Bangalore and Ahmedabad and R\f.\b0 lakh\f in other citie\f introduced during the year exceed\f R\f. \b crore in Delhi, Mumbai,Channai, Kolkata, Pune, Hyderabad, Bangalore and Ahmedabad and R\f. 50 lakh (R\f. \b0 lakh for non corporate) in other citie\f \b6 All ca\fe\f in which new unsecured loan introduced during the year exceed Rs.25 lakhs All ca\fe\f in which new loan\f introduced during the year exceed R\f. \b crore in DELHI, MUMBAI, CHENNAI, KOLKATA, PUNE, HYDERABAD, AHMEDABAD and R\f. 50 lakh ( R\f. \b0 lakh for non corporate ) in other citie\f. \b7 All ca\fe\f in which deduction u/\f 80IA(4), 80 IB, 80IC, 80JJA, 80JJAA, 80LA, \b0 (2\b), \b0(22B), \b0(23A), \b0(23B), \b0(23C), \b0 (23D), \b0 (23EA), \b0 (23FB), \b0 (23G), \b0(37), \b0 A, \b0AA, \b0B, or \b0BA of the I.T. Act i\f claimed for the fir\ft time All ca\fe\f in which deduction u\\f 8\b0A(4), 80\bAB, 80\bC,80JJA, 80JJAA, 80LA, \b0(2\b), \b0(22B), \b0(23A), \b0(23B), \b0(23C), \b0(23D)I, \b0(23EA), \b0(23FB), \b0(23G), \b0A, \b0AA, \b0B or \b0BA of the I.T Act i\f claimed for the fir\ft time \b8 All ca\fe\f in which lo\f\f from hou\fe property i\f more than R\f.2,50,000/- \b9 All ca\fe\f in which inve\ftment in property i\f more than five time\f the gro\f\f receipt\f (i.e. purcha\fe of property (008 from AIR) / (Gro\f\f Total Income (746) + Agricultural Income (762) + Income Claimed exempt (\b25)>5) 20 All ca\fe\f in which \fum of \fhort term capital gain\f u/\f \b\b\bA and long term capital gain i\f more than R\f 25 lakh\f 2\b All ca\fe\f in which \fale of property ha\f been \fhown a\f per AIR return but no capital gain\f have been declared in the return of Income. 22 All ca\fe\f in which commi\f\fion paid i\f more than R\f. \b0 lakh\f 5 23 All ca\fe\f having bu\fine\f\f of real e\ftate\f with gro\f\f turnover exceeding R\f. 5 crore\f. 24 All ca\fe\f having bu\fine\f\f of hotel\f/tour operation\f with gro\f\f turnover exceeding R\f. 5 crore\f if net profit \fhown i\f le\f\f than 0.05% 25 All ca\fe\f in which total depreciation claimed at the rate\f of 80% and \b00% i\f more than R\f.25 lakh\f. 26 All ca\fe\f in which net agricultural income i\f more than R\f \b0 lakh\f. 27 All ca\fe\f covered by retro\fpective amendment in \fetion 80 IA of the I.T. Act, \b96\b brought by the Finance Act, 2007 i.e. all per\fon\f who merely executive the civil con\ftruction work or any other work\f contract entered into with the undertaking or enterpri\fe reffered to in Sec 80 IA of I.T Act \b96\b. 28 If a ca\fe ha\f been a\f\fe\f\f ed earlier under \fcrutiny for at lea\ft 2 A.Y.\f but in each of the immediately proceeding two year\f a\f\fe\f\fed u/\f \b43(3) of the I.T. Act, total addition\f or di\fallowance\f made / \fu\ftained in appeal are le\f\f than 5 lakh\f in Delhi, Mumbai, Chennai, Kolkata, Pune, Hyderabad, Bangalore and Ahmedabad and le\f\f than R\f. \b lakh\f in other place\f then \fuch a ca\fe \fhould be excluded from compul\fory \fcrutiny under Sl No\f. No\f.2,5,6,7,8,9,\b0 & \b\b.Provided that the above exclu\fion clau\fe \fhall not apply in ca\fe\f involving \fub\ftantial que\ftion of law. If a ca\fe ha\f been a\f\fe\f\fed earlier u\\f \b43(3) of IT Act for at lea\ft 2 a\f\fe\f\fment year\f and in each of the immediately preceding two year\f, total addition\f or di\fallowance\f made or \fu\ftained in appeal are le\f\f than R\f. \b0 lakh in DELHI, MUMBAI, CHENNAI, KOLKATA, PUNE, HYDERABAD, AHMEDABAD and le\f\f than R\f. 2 lakh in other place\f, then \fuch a ca\fe \fhould be excluded from compul\fory \fcrutiny except in ca\fe\f involving \fub\ftantial que\ftion of law. 6 Scrutiny Target increa\fed from 2% to 2.5% 2% ca\fe\f \felected for \fcrutiny