The Income Tax department has tightened its grip with fresh guidelines that aim to ensure compliance from taxpayers. In a bold move, the department has made it clear that individuals who choose to ignore I-T notices will face the brunt of full scrutiny when it comes to their Income Tax Returns (ITR).
In a bid to tighten the grip on tax evaders, the Income Tax Department has unveiled new measures to tackle non-compliance. Under the revised guidelines set by the Central Board of Direct Taxes (CBDT), the department will initiate compulsory examination in cases where assessees fail to respond to tax notices.
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Furthermore, the CBDT emphasized that the department will also intensify scrutiny in cases where specific information relating to tax evasion is provided by law enforcement agencies or regulatory authorities. This provision aims to uncover and address instances of tax fraud and illicit financial activities.
As per the guidelines, tax officers will have to send a notice under section 143(2) of the I-T Act by June 30 to the assessee regarding discrepancies in income.
The department will examine tax returns based on where the survey was undertaken or where the income tax notices were served under Sections 142 (1) and 148 in cases of tax evasion, search and seizure.
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Earlier, the CBDT issued the guidelines, mentioning the procedures to be followed by the I-T department for scrutiny.
“Cases, in respect of which specific information pointing out tax evasion for the relevant assessment year is provided by any law enforcement agency, and the return for the relevant assessment year is furnished by the assessee,” CBDT said.
This is how the department will look at the parameters as per the guidelines in the scrutiny cases: Tax evasion cases
The I-T department will take up cases where there is specific information suggesting tax evasion for a particular year provided by a law agency. The taxpayer needs to file the tax returns for the relevant assessment year. The department will also take up cases if a notice has been served under section 148, irrespective of whether the tax return has been filed in response to the notice.
If a taxpayer fails to file tax return on the notice under section 142 (1), his case will come under its scrutiny. The Section 142(1) notice is issued by the Income Tax Department for more clarification regarding the return filed.
Further, if the income tax department has conducted a search and seizure prior to April 1, 2021, or after that, a scrutiny is warranted. ITR scrutiny is also invited if the department has not granted or cancelled registration under section 12A, 12AB, 35(1)(ii)/(iia)/(iii), 1023(C), etc, but the taxpayer is found to be claiming tax exemption/deduction. But cases where the order of withdrawal/approval has been reversed or set aside in appellate proceedings would note face scrutiny.
