CBDT asks Officers not to ask irrelevant & unjustified queries in scrutiny notices

CBDT asks Income Tax officials to avoid asking irrelevant and unjustified queries in scrutiny notices issued to taxpayers.

CBDT issues Instruction to Income Tax officials to not to ask irrelevant and unjustified queries in scrutiny notices issued to taxpayers.

Recently an annexure to notice under section 142(1) allegedly claimed to have been issued by Income Tax Faceless Assessment Unit surfaced on the social media.

Note: abcaus.in does not vouch for the authenticity of the above annexure

As per the said annexure, the Assessment Unit has questioned the very low amount claimed in the income tax return/replies towards drawings (household expenses). The alleged notice asks breakup of quantity and rates in respect of expenses on monthly ration i.e. wheat flour, rice, spices, oil, gas, electricity, clothing, shoes, rent, vehicle running, insurance, restaurant visit, social events etc.     

The alleged notice went on to state that in the event of non submission of the above information, the household withdrawal shall be estimated at Rs. 10 lakhs p.a..

A notice under Section 142(1) of the Income Tax Act, 1961 is issued by the Income Tax Assessment Unit to gather necessary information or documents for completing the scrutiny assessment.

The spread of the alleged notice on social media and other electronic platforms, created a panic in the mind of taxpayers and as such minute detaining is not maintained by a common citizen. However, this lead to a debate as claiming very low amount of drawing for household expenses is one of the ways to evade taxation.

However, it has ben reported by PTI that CBDT has issued an Instruction directing Income Tax Department to ensure due application of mind while issuing scrutiny notices and queries asked should be “relevant” and “specific”.

As stated, CBDT has also asked all the Principal Chief Commissioners (Regional Heads) to exercise effective supervision over their Assessing Officer (AO) to ensure that questions framed in the notices sent are “justified” and that “irrelevant” queries are completely avoided.

As reported the CBDT has also directed the PCCITs to periodically make a monthly reviews of the notices issued by the AOs to ensure compliances with its Instruction.

• Not making available material forming basis of reopening shows AO had prejudged the issue
• Reopening conclusion that assessee was “Non-Filer” was non-application of mind – High Court
• HC declined to allow voluminous documents physically in Faceless Assessment
• Prima facie satisfaction u/s 148 can not be a non-existing or incorrect information
• Mutual Funds to value physical Gold and Silver by using the polled spot prices