CBDT Frowns On Hardship To Taxpayers And Wastage Of Time By Issue Of Vague S. 143(2) Scrutiny Notices By AO

The CBDT has issued Instruction No. 19/2015 dated 29.12.2015 stating that instances have come to the notice of the Board that in cases selected under scrutiny, while issuing the first notice, Assessing Officers do not convey the specific compliance requirements like production of accounts, furnishing of documents, information, evidences, submission of other requisite particulars etc. Since the taxpayers or their authorized representatives are required to comply with the statutory notice issued by the Assessing Officer, they remain clueless about the information required to be submitted and their appearance before the Assessing Officer does not serve any fruitful purpose except recording of their presence. This causes undue hardship to the taxpayers and unnecessary wastage of their time. The CBDT has directed that Assessing Officers should first go through the returns of income which have been selected for scrutiny and identify the issues which require examination. The initial notice issued under section 143(2) of the Income-tax Act, 1961 should itself be accompanied with the questionnaire containing details of specific documents/information/evidences etc. that are required to be furnished by the taxpayer in connection with scrutiny assessment proceeding in their respective case.


Instruction No. 19/2015

Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
North Block, New Delhi, dated the 29th of December, 2015

To

All Pr. Chief-Commissioners of Income-tax/Chief-Commissioners of Income-tax All Pr. Directors-General of Income-tax/Directors-General of Income-tax

Subject- Issuing Questionnaire in cases selected for scrutiny- regarding

Sir/Madam

Instances have come to the notice of the Board that in cases selected under scrutiny, while issuing the first notice, Assessing Officers do not convey the specific compliance requirements like production of accounts, furnishing of documents, information, evidences, submission of other requisite particulars etc. Since the taxpayers or their authorized representatives are required to comply with the statutory notice issued by the Assessing Officer, they remain clueless about the information required to be submitted and their appearance before the Assessing Officer does not serve any fruitful purpose except recording of their presence. This causes undue hardship to the taxpayers and unnecessary wastage of their time.

2. Since the CASS cycles are proposed to be run well in advance now, sufficient time shall be available with the Assessing Officers to go through the returns of income which have been selected for scrutiny and identify the issues which require examination. Therefore, in cases selected for scrutiny, it should be the endeavour of the Assessing Officer that the initial notice issued under section 143(2) of the Income-tax Act, 1961 is accompany a notice under section 142(1) along with the questionnaire containing details of specific documents/information/evidences etc. that are required to be furnished by the taxpayer in connection with scrutiny assessment proceeding in their respective case.

3. All the Assessing Officers are required to comply with the above directions.

4. Hindi version to follow.

(Ankita Pandey)

Under Secretary to Government of India
(F.No. 225/328/2015-ITA-II)


7 comments on “CBDT Frowns On Hardship To Taxpayers And Wastage Of Time By Issue Of Vague S. 143(2) Scrutiny Notices By AO
  1. manish parekh says:

    Its the same scenario of the British Raj wherein the officers had been given unlimited powers to harass, suppress & loot the Indian resources. THEY WERE NOT ANSWERABLE. Those officers are now replaced with the our own Indians. BUT tragedy is nobody has bothered to change those rules yet. So they are making merry for the past 65 years. Now the status is all such well-intended instructions find their place in dust bins. Its only some IRON HAND which can make a difference. Till then ………..

  2. Bobjee Kurien says:

    I would urge the Revenue Secretary to ensure that the instructions issued by the board are strictly adhered to by the lower formations.The malady lies there .The result is that the lower formations do not take the directions issued by it seriously .

    The basic issue that comes to the fore is there is a unwritten dikat that the officials should err on the side of the revenue .This is what most of the officers try.In doing so the official tries to shield himself with the above epitaph so that he cannot be caught on the wrong foot by making a low assessment.No assessment can be fool proof.That is the absolute truth.The officer is both the judge and the prosecutor. The higher authorities need to look if the official has discharged his duties with due diligence in execution the authority vested in him .

    The price of using this diligence/discretion is amount that one pays….. corruption.The amount depends on the quantum discovered or assumed.The directions issued now is a pointer to the good governance that is promised.

    Phir subah kabhi tho aayegi …..change anthem .

    • Bobjee Kurien says:

      • Bobjee Kurien says:

        https://in.news.yahoo.com/income-tax-department-lists-18-more-defaulters-160003784–finance.html..

        The work just does not just stop with this. Now that the list is published see to the end of it and not drag the feet It is just 49 cases .Show them that you mean business

      • Rajesh Bhardwaj says:

        Sir, wo Subah aayagi agar aage diya CBDT instruction ke anusar sabhi AOs work :- Central Board of Direct Taxes Circular No: 14 (XL-35) dated April 11, 1955. It states: “Officers of the Department must not take advantage of ignorance of an assessee as to his rights. It is one of their duties to assist a taxpayer in every reasonable way, particularly in the matter of claiming and securing reliefs and in this regard the Officers should take the initiative in guiding a taxpayer where proceedings or other particulars before them indicate that some refund or relief is due to him. This attitude would, in the long run, benefit the Department for it would inspire confidence in him that he may be sure of getting a square deal from the Department. Although, therefore, the responsibility for claiming refunds and reliefs rests with assessee on whom it is imposed by law, officers should

        (a) draw their attention to any refunds or reliefs to which they appear to be clearly entitled but which they have omitted to claim for some reason or other;

        (b) freely advise them when approached by them as to their rights and liabilities and as to the procedure to be adopted for claiming refunds and reliefs.”

        • Varaprasad Daitha says:

          Rajeshji, you are right. I was not aware of the said circular. But in Regional Direct Taxes Training Instt. Bengaluru taught the same concepts. I implemented in one case while I was working in Visakhapatnam. The partner of an assessee firm who is well trained technician in Nippon Ship Repairing was made in charge of all Nippon ships touching the Indian coasts and he received money for the services. He had declared all the receipts through the firm’s books and the CA and my predecessor had harassed him and after being vexed with the attitude he decided to leave India for good. After I took charge I studied the facts of the case and found that there was no mistake on the part of the assessees and I asked the CA what was the wrong in the accounts. He minced words. The partner of the assessee grasped the situation and later met me separately in the office and handed me a letter conveying his view of the department till my taking charge and the change of his views of the department after I sorted out the issues. I kept the letter for myself as a monument. Similarly another assessee who was to receive refund more than Rs. 1 crore was not being favored with it. But I sent a detailed report to the CCIT explaining the circumstances and authorization to issue the refund. At that time the permission of the CCIT was needed. After going through the report in detail and the record, the CCIT commended the way the report was dealt with and issued authorization.

          So if an AO works with sincerity his work will be recognized by one and all. As present day practices, it is also to be ready for rough treatment as in my own case. But brave AOs will never fear.

  3. Varaprasad Daitha says:

    The CBDT had earlier also issued similar circular but it never was observed in implementation. Now the present circular is clarificatory, lucid and to the point. It is for the department and the administrative authorities to see the spirit of the circular is implemented. The role of Revenue Secretary is also seen his influence on the CBDT.

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