Finance Ministry Modifies Income Tax Scrutiny Notices

New Delhi: In a bid to end taxpayers' harassment, the Finance Ministry has "modified" the Income Tax department notice issued for the tedious scrutiny procedure by bringing in "three new formats" that will clearly stipulate if the inquiry against them is "limited, complete or manual".

The usage of words on the new notices have also been modified with the addition of phrases like "for your kind information", an invite to get the inquiry done in an e-enabled and paperless fashion (in select cities) and a "yours faithfully" sign off in the end by the concerned Assessing Officer (AO).

The three new formats of these scrutiny notices have been circulated by the Central Board of Direct Taxes (CBDT) for immediate usage in tax department offices across the country after getting clearances from the top, including Union Finance Minister Arun Jaitley and Revenue Secretary Hasmukh Adhia.

"...All scrutiny notices, shall henceforth, be issued in these revised formats. The Systems Directorate is effecting necessary changes in the department module in this regard," a CBDT order, accessed by PTI, said.

Officials called the changes in the single-format and old scrutiny notice of the I-T department, issued under section 143 (2) of the Income Tax Act, as a "revolutionary step".

"Till now, if a taxpayer was to be scrutinised, whether on a big or small issue, the notice spoke in a monotonous tone to furnish voluminous documents, files, account details and required multiple appearances of the assessee.

"Now, it has been mandatorily categorised if the taxpayer needs to be examined for a limited, complete or manual scrutiny," a senior tax official said.

Taxpayers residing in cities of Ahmedabad, Bengaluru, Chennai, Delhi, Hyderabad, Kolkata and Mumbai can opt for paperless assessment (if their case falls under scrutiny) as part of a new pilot project that the CBDT is running in this regard.

Each such new notice will also henceforth carry the fax number and official email id of the AO.

With the pilot project, CBDT aims to end corruption and bring hassle-free experience for the taxpayers who undergo a time-consuming scrutiny assessment procedure which entails production of a number of documents and financial statements after their case lands in the net. The body will also take into account inputs of various technical intelligence gathering mechanisms of the tax department.

The department, however, has said it brings only about 1 per cent of cases under the said procedure in a given financial year.

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