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CBDT Scrutiny Rules Tightened for Assessing Officers

NEW DELHI: In line with Prime Minister Narendra Modi’s recent message to the tax department, the government has sought to protect you against possible harassment in case you have received an income-tax scrutiny notice. rutiny Rules Tightened Assessing Officers

The Prime Minister said that people should not fear such persecution and fret unnecessarily.

The Central Board of Direct Taxes (CBDT) has made the assessment for officers more difficult in order to expand the scope of a ‘limited’ scrutiny to a complete one. “They will also have to substantiate any contention of possible under-reporting of income and loss of taxes, apart from requiring the approval of senior officers.” 

Recently the apex direct taxes body issued the guidelines for assessing officers to form a “reasonable view” that there is a possibility of income under-assessment, said an official aware of the move. “Besides, when manually selecting cases for scrutiny in the current financial year, the threshold for metros has been raised to Rs 25 lakh from Rs 10 lakh for instances involving additions in the earlier year.”

In the past two years, the government has sought to move away from what’s been dubbed by some as tax terrorism and make the department’s revenue collection efforts less aggressive. In a meeting last month Modi conveyed the same message to tax officials. Processes will be based less on discretions and hence, increased reliance is being observed on information technology.

In metros, E-scrutiny has also been started which allows payees to reply to scrutiny questions over email. These latest directives add to measures aimed at ensuring that tax officers don’t embark on the fishing expedition even in cases of limited scrutiny under the Computer Aided Scrutiny Selection (CASS) where the perceived risk area is limited to only that particular transaction.

The move was welcomed by Tax experts. Together with the new scrutiny formats, this will lead to greater accountability of the tax department, said Amit Maheshwari, partner, Ashok Maheshwary & Associates LLP, chartered accountants.

“This would help save precious resources of the department, lead to early closure of assessments and prevent unnecessary harassment,” he said.

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