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CBDT Suspends AO For Converting Ltd Scrutiny Into Full Scrutiny With Mala Fide Intention

The CBDT has sent a strong message to all unscrupulous AOs that it will no longer tolerate their shenanigans of harassing taxpayers with a view to extort bribes. The usual modus operandi of such AO’s is to conduct roving inquiries and threaten to make huge additions unless the hapless taxpayer agrees to pay a bribe. The CBDT has put an end to this nefarious practice by directing that all cases where a limited scrutiny is converted into a full scrutiny should be backed with an order sheet entry in which reasons are given. The approval of the Pr CIT has also been made a precondition. An officer who defied this directive has been placed under suspension as his action gave rise to a “very strong suspicion of mala fide intentions“.




F. No. DGIT(Vig.)/HQ/Sl/2017-18
Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes

New Delhi-11 0001
Dated: 30th November, 2017

Subject: Unauthorized expansion of the scope of limited scrutiny- instructions- reg.

CBDT has issued detailed guidelines/ directions for completion of cases of limited scrutiny selected through CASS module. These guidelines postulate that an Assessing Officer, in limited scrutiny cases, cannot travel beyond the issues for which the case was selected. The idea behind such stipulations was to enforce checks and balances upon powers of an AO to do fishing and roving inquiries in cases selected for limited scrutiny.

2. Further, the guidelines for proper maintenance of order sheets have been given in the Manual of Office Procedure issued by the Directorate of Organisation and Management Services. The Manual clearly lays down:

A. The minutes of the hearing must be entered with date, in the order-sheet.

B. Make proper order-sheet entries for each posting, hearing and seeking and granting of adjournments.

C. If nobody attends a hearing or the request for adjournment comes after the hearing date, enter the facts in the order-sheet.

Maintenance of a cursory and cryptic order sheet shows irresponsible, ad hoc and undisciplined working of any officer.

3. Instances have come to notice of CBDT where some Assessing Officers are travelling beyond their jurisdiction while making assessments in Limited Scrutiny cases by initiating inquiries on new issues without complying with mandatory requirements of the relevant CBDT Instructions dated 26.09.2014, 29.12.2015 and 14.07.2016. These instances have been viewed very seriously by the CBDT and in one case the Central Inspection Team of the CBDT was tasked with examination of assessment records on receipt of allegations of several irregularities. Amongst other irregularities it was found that no reasons had been recorded for expanding the scope of limited scrutiny, no approval was taken from the PCIT for conversion of the limited scrutiny case to a complete scrutiny case and the order sheet was maintained very perfunctorily. This gave rise to a very strong suspicion of mala fide intentions. The Officer concerned has been placed under suspension.

In view of discussion in the preceding paragraphs it is once again reiterated that the Assessing Officers should abide by the instructions of CBDT while completing limited scrutiny assessments and should be scrupulous about maintenance of note sheets in assessment folders.

(Rakesh Gupta)
ADG (V) HQ-I
New Delhi

8 comments on “CBDT Suspends AO For Converting Ltd Scrutiny Into Full Scrutiny With Mala Fide Intention
  1. manish parekh says:

    So, at last,we are witnessing some action to replace the POWERS DESIGNED by BRITISHERS for their officers to rule India which continued by the IRS / IAS lobby even after 70 years of independence.

  2. kc aggarwal says:

    Let CBDT also demonstrate and make public, the follow up action after suspension by way charge sheet inquiry and penalty. If CBDT is serious about disciplining the AOs, AAs then it must prove it by quick charge sheet/fair but quick inquiry and just penalty.

  3. Sundar says:

    In one case the A O refused to give the copy of proforma prepared for reopening which contained the reasons recorded by the A O and remarks of the JCIT saying that it is an internal correspondence inspite of bringing to his notice the relevant Delhi high court decision and instead gave an extract of the reasons recorded only. The assessee is handicapped as he is not in a position to know the remarks of the JCIT while filing objections.

  4. K Meenatchi Sundaram says:

    Excellent and bold move by CBDT since this move will bring in accoutability on part of the officials who are also liable for penal actions for nonfeasance on their part similar to penalties imposable on the tax payers. Move like this will create a jolt and inconveniences in the short term, but India will help India grow healthily.

  5. Prasanth Srinivas says:

    Copy of order sheet and minutes of proceedings should be given to the assessee, especially in cases of 147 and 263

  6. Parth says:

    This practice is rampant. This is particularly so where the officer is verifying the cash deposits in banks post demonetization. If one assessee is under scrutiny the entire family accounts are subjected to scrutiny. This clearly comes under the category of roving or phishing inquiry. There should be a random suo motu audit of all such inquiries by the senior officers.

  7. Rajeev says:

    All Order Sheet entries should be compulsorily made online. Generally details asked by A.O.’s vide 142(1) along with an Annexure which includes unnecessary details, hence all Notices & their annexures should also be made compulsorily online.

    Further similar Rules should be made for 148 cases also. Generally AO’s issue routine questionnaire in 148 cases also which do not relates to the REASONS for escapement which convert all 148 in to detailed scrutiny cases. Why ?……………………All Knows.

  8. DARSHAN JAIN says:

    This is an welcome move by CBDT. It goes on to set an example for such high handed officers. I think such accountability should be enforced in all areas. More often than not the officers exercise their powers arbitrarily and with malafide intentions.

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