Expedite scrutiny cases below Rs 5 lakh: CBDT to taxman

In fresh moves to end taxpayers grievances, CBDT has asked the taxman to "expeditiously" complete those scrutiny cases where income concealed is uptoRs 5 lakh .
It has asked the Assessing Officers (AOs) to confine their queries for which the case has been picked up for scrutiny under the 'Limited' category, which pertains to cases with income upto Rs 5 lakh and in the four metro cities, besides Bangalore, Hyderabad and Ahmedabad the limit is Rs 10 lakh.
"Limited Scrutiny cases shall remain confined only to the specific reasons/issues for which case has been picked up for scrutiny. The scope of enquiry shall be restricted to the Limited Scrutiny issues. These cases shall be completed expeditiously in a limited number of hearings," the latest CBDT directive issued in this regard yesterday, also accessed by PTI, said.

The IT department brings about 1-2 per cent of cases under the stringent scrutiny assessment procedures where, on the basis of credible information, it has suspicion that the taxpayer has under-reported or hidden his true income.
The scrutiny procedure, while used only for a select number of cases, has been a constant issue of grievance for taxpayers as they complain that the taxman harasses them with long queries and number of time-taking appearances.
There are two kinds of scrutiny in the tax department, 'Limited' and 'Complete', and the new directives have asked that the AO "has to intimate the reason for selection of case for scrutiny to the assess concerned" in all cases.

(Reopens DEL29)

In cases of 'Complete' scrutiny, the CBDT said, the AO will have to take clearance from his superior before taking up the case the senior official will have to check the "merits" of the case put forth by the AO.
"The Board further desired that in all cases under scrutiny, where the Assessing Officer proposes to make additions or disallowances, the assess would be given a fair opportunity to explain his position on the proposed additional or disallowances in accordance with the principle of natural justice.
"In this regard, the Assessing Officer shall issue an appropriate show cause notice duly indicating the reasons for the proposed additions or disallownaces along with necessary evidences reasons forming the basis of the same," it said.

The CBDT order added that "before passing the final order against the proposed additions or disallownaces due consideration shall be given to the submissions made by the assess in response to the show cause notice."
The Central Board of Direct Taxes has told the AOs and IT department that these instructions are for "immediate" and "strict compliance".
In an another directive issued yesterday, the CBDT has told the IT department that notices for scrutiny should contain the details of specific information and documents which are to be furnished by the taxpayer to the AO when the first notice is served to them.