Update: CBDT has issued Instruction No. 20/2015 dated 29.12.2015 in which it has issued clarifications on several issues in order to facilitate the conduct of scrutiny assessments in cases selected through Computer Aided Scrutiny Selection (‘CASS’).
The CBDT has also stated that as far as the returns selected for scrutiny through CASS-2015 are concerned, two type of cases have been selected for scrutiny in the current Financial Year – one is ‘Limited Scrutiny’ and other is Complete Scrutiny’.
The assessees concerned have duly been intimated about their cases falling either in ‘Limited Scrutiny’ or ‘Complete Scrutiny’ through notices issued under section 143(2) of the Income-tax Act, 1961 (‘Act’). The procedure for handling ‘Limited Scrutiny’ cases has been explained in detail by the CBDT.
1.States that the said Instruction is applicable only to cases selected for scrutiny under CASS and only on the parameter(s) of AIR/CIB/26AS data;
2.Indicates that scope of enquiry to be “Specific issue based” and directs AO to confine the questionnaire only to the specific issues pertaining to AIR/CIB/26AS data after giving reason for selection of the case for scrutiny to the assessee;
3.Also outlines the procedure for handling 'Limited Scrutiny' and 'Complete Scrutiny' cases in relation to cases selected through CASS-2015;
4.Highlights that during the course of assessment proceedings in ‘Limited Scrutiny' cases, if ‘potential escapement of income’ found exceeding Rs 5 lakhs (Rs 10 lakhs for metro charges) requiring substantial verification of other issues, the case may be taken up for ‘Complete Scrutiny’, subject to written approval of Pr. CIT/CIT ;
5.In all cases where AO proposes to make additions or disallowances, directs AO to (i) give fair opportunity of hearing to the assessee, (ii) issue show-cause notice duly indicating reasons for proposed additions/disallowances along with necessary evidences/reasons forming its basis and (iii) consider assessee’s submissions in response to the show-cause notice before passing the final order