Income Tax Scrutiny – Latest Developments

The CBDT on 23rd June 2017 has issued revised Income Tax Scrutiny notices.


Income Tax

Where the Income tax return has been made under Section 139 or in response to notice under section 142(1), the assessing the officer shall if he considers it necessary to ensure that –

  • The assessee has not understated the income
  • Has not computed excessive loss
  • Has not underpaid the tax,

Serve a notice on the assessee under Section 143(2) requiring him to attend his office or produce any evidence on which assessee may rely on the support of the return.

Key Issues

  •  Notice under section 143(2) cannot be served if no return has been furnished by the assessee.
  •  If the notice under Section 143(2) is not served, an assessment cannot be made under section 143(3).
  • No notice under section 143(2) shall be served on the assessee after the expiry of 6 months from the end of the financial year in which return is furnished.
  •  Notice under section 142(1)(ii) & (iii) can be served even if no return has been furnished by the assessee.
  •  Amendment by Finance Act, 2016, allows prescribed Income Tax Authority to issue notice under Section 143(2).

Latest Developments

Latest revised Income Tax Scrutiny notices will allow assesses or taxpayers to conduct their business with the Department through E-Facility mode, without visiting the Income Tax Depart.

  •  Limited Scrutiny
  • Complete Scrutiny &
  • Compulsory manual scrutiny.

Each of the three, one-page notices, will bear the name of the assessing officer, their designation, telephone and fax number and their email id. An assessee can use their account on the official e-filing website of the department or their personal email id to conduct their scrutiny assessment dealings with the AO. The new notices will also carry a five-point explanation about the new changes being made on Internet-based E-Proceedings. However, the Assessing Officer will have discretionary powers to call for additional documents and records and seek personal the appearance of the taxpayer, if required.