Cases for scrutiny u/s 143(2) for AY 2013-14 have already been selected and the scrutiny proceedings has commenced. I would like to bring to your notice an important CBDT Instruction (No. 7/2014 dated 26th September 2014).
According to the said notification, the cases selected for scrutiny during the Financial Year 2014-2015 under CASS(Computer Aided Scrutiny Selection ), on the basis of either:
- AIR data; or
- CIB information; or
- Non reconciliation with 26AS data
The scope of enquiry has to be limited to verification of these particular aspects only. Therefore, in such cases, an A.O. has to confine the questionnaire and subsequent enquiry or verification only to the specific point(s) on the basis of which the particular return has been selected for scrutiny.
In cases of selection of scrutiny other than these 3 basis, the scrutiny procedure would be comprehensive as per routine.
Hence, when a notice for scrutiny comes for AY 2013-14, one should ask for the reason referring the said instruction and state to limit the scrutiny to the specific point, if any. Daft of such letter given below
However, in case, during the course of assessment proceedings it is found that there is potential escapement of income exceeding Rs. 10 lakhs (for non-metro charges, Rs. 5 lakhs) on any other issue(s) apart from the AIR/CIB/26AS information based on which the case was selected under CASS requiring substantial verification, the case may be taken up for comprehensive scrutiny with the approval of the Pr. CIT/DIT concerned. However, such an approval has to be accorded by the Pr. CIT/DIT in writing after being satisfied about merits of the issue(s) necessitating wider and detailed scrutiny in the case.
I hope this information would be of use to you.
Draft Letter To Income Tax officer
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The Income Tax Officer,
Room No. XXX
XX Floor, XX Block
Re: CA Pramod Jain
Sub.: Notice u/s 142(1) of the Income Tax Act, 1961.
With reference to your notice for the above captioned subject dated ______, I hereby submit the
- As per vide instruction no.7/2014 dated 26.09.2014 by Central Board of Direct Taxes by virtue of its powers u/s119 of the Act that states that “In suppression of earlier instructions/ guidelines on this subject, hereby directs that the cases selected for scrutiny during the Financial Year 2014-2015 under CASS, on the basis of Either AIR data or CIB information or for non reconciliation with 26AS Data, the scope of enquiry should be limited to verification of these particular aspects only. Therefore, in such cases, an Assessing Officer shall confine the questionnaire and subsequent enquiry or verification only to the specific point(s) on the basis of which the particular return has been selected few scrutiny”.
- My case has been selected for scrutiny in F.Y.2014-15, therefore as per above notification the questionnaire and subsequent enquiry or verification should be made only to the specific points on the basis of which the particular return has been selected for scrutiny.
- Please inform me the the specific issue on the basis of which the case has been selected for scrutiny, so that I can submit the relevant details. The said instruction has been enclosed for your reference.
- The questionnaire you sent is general in nature, hence I object to that notice.
I hope the above information is in order.
CA. Pramod Jain
A/R of the assessee