CBDT Issues Clarification on Scrutiny Guidelines on Transfer of Cases to Central Charges for Non-search Persons

Notification No. 225/66/2023, dated 03-08-2023

The Central Board of Direct Taxes (CBDT) issued Guidelines for selecting returns for complete scrutiny during FY 2023-24 vide F. No. 225/66/2023 dated 24-05-2023. The Guidelines list different parameters and corresponding procedures for compulsory selection. The board has laid down the parameters for selection & conducting assessment in the following circumstances:

a) Cases pertaining to survey under section 133A;

b) Cases pertaining to Search and Seizure;

c) Cases where notice under section 142(1), calling for return, has been issued or no returns have been furnished;

d) Cases where notice is issued under Section 148;

e) Cases related to registration/approval under sections 12A, 35, 10(23C), etc.;

f) Cases involving additions in earlier AYs on a recurring issue of law and/or fact; and

g) Cases related to specific information regarding tax evasion.

Pertaining to the cases in which notices under section 148 have been issued. These cases shall be selected for compulsory scrutiny with prior administrative approval of Pr.CIT/Pr.DIT/CIT/DIT concerned. The officer shall ensure that such cases if lying outside Central Charges, are transferred to Central Charges under section 127 within 15 days of service of notice under section 143(2)/142(1) calling for information by the Jurisdictional Assessing Officer concerned.

Now, the Central Board of Direct Taxes (CBDT) clarified the transfer of cases to Central Charges.

During the Search & Seizure action, information related to other persons may have one-off/ very few or limited financial transactions with the assessee group covered in the search under section 132/132A may be found.

Such persons are not integrally connected with the assessee’s core business and do not belong to the business group. Often such persons also do not reside in the same city as the assessee. In such cases, the relevant information is generally passed on to the jurisdictional AO for assessing them under section 148.

Therefore, the board has clarified that all such non-search cases selected are not required to be transferred to the Central Charges unless covered by the guidelines.

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