CBDT control rules also cover tax evasion

Mumbai: The Central Board of Direct Taxation (CBDT) has released its annual guidelines for the mandatory screening of tax return (IT) returns for scrutiny. These relate to the screening and comprehensive review to be undertaken in the current fiscal year 2022-23 and cover investigation cases, search and seizure cases and cases where no computer report was filed in response to a notice of investigation under section 142(1).
It also covers cases relating to non-registration or cancellation of registration under various headings, those relating to additions made to recurring questions of law or fact and, finally, cases where precise information on the fraud tax have been received. The guidelines also prescribe the roles and responsibilities of IT managers and the National Faceless Assessment Center (NFAC).
A complete check is a regular element carried out in selective cases to verify whether the taxpayer has correctly declared his income in the computer declarations and whether he has paid the taxes due. The comprehensive review, which is to be carried out in the current fiscal year, specifically addresses cases of tax evasion, where specific information in this regard has been provided by a law enforcement agency — including the IT department’s investigation department itself — and that an IT statement has been filed by the taxpayer. A complete examination will allow the computer specialist to know the income which has not been declared in the computer declarations (escaped contribution). With technology enabling a better flow of information between agencies in the country and in other countries, the number of such cases taken up for review has increased in recent years, government officials say.
The CBDT continues to focus its attention on trusts and charitable institutions. For example, if an institution was denied authorization under Article 10(23C) or if the authorization granted was withdrawn but the tax exemption continued to be claimed, then such a case would be considered. Thus, institutions such as hospitals and educational establishments are susceptible to tax audits. Similarly, if a charitable trust was not registered under Section 12A or the registration was revoked but a tax exemption was claimed, the matter would be considered.
Since contributions are now anonymous and the notification period under Article 143(2) for discrepancies in the IT declaration has been reduced to three months from the end of the financial year during from which the statement is filed, selection and transfer of cases for full review to NFAC must be completed by May 31 and service of notice by the end of June.

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