The guidelines prescribe six broad parameters under which returns filed may be picked up for complete scrutiny.
Among the key categories are cases where a survey under Section 133A of the Income Tax Act was conducted on or after April 1, 2024.
Such cases will be selected for compulsory scrutiny based on information provided by the investigation wing of the tax department.
Returns linked to search-and-seizure actions under Section 132 or requisition proceedings under Section 132A initiated on or after April 1, 2024, will also be subject to detailed examination. In these cases, the assessing officer concerned will initiate scrutiny proceedings after obtaining the necessary administrative approvals.
The CBDT has also included reassessment cases where notices under Section 148 have been issued. The treatment of such cases will depend on the nature of the proceedings, including whether they arise from search, survey or other information suggesting income has escaped assessment.
Another category covers trusts, charitable institutions and similar entities that claim tax exemptions or deductions despite their registration or approval having been denied, cancelled or withdrawn under the relevant provisions of the Income Tax Act. Such returns may be selected for scrutiny to verify the legitimacy of the claims.
The guidelines further target cases involving recurring issues that have resulted in substantial tax additions in earlier years. These include matters where additions exceeding ₹50 lakh in metro jurisdictions such as Delhi, Mumbai, Kolkata, Chennai, Bengaluru, Hyderabad, Ahmedabad and Pune, or ₹20 lakh in other jurisdictions, have either become final or have been upheld by appellate authorities in favour of the Revenue.
In addition, returns may be selected where specific information pointing to possible tax evasion is received from law-enforcement agencies, regulatory bodies, intelligence units or the Income Tax Department’s investigation machinery.
At the same time, the CBDT has clarified that returns filed in response to notices linked to information available through the Annual Information Statement (AIS), Statements of Financial Transactions (SFT), TDS data or similar information sources will not automatically be taken up for compulsory scrutiny unless they fall under one of the specified categories.
The guidelines provide a framework for tax authorities to prioritise higher-risk cases for detailed examination while continuing to process the majority of returns through the normal assessment mechanism. Scrutiny proceedings will be initiated through notices issued under Section 143(2) of the Income Tax Act, with most cases expected to be handled under the faceless assessment system.
