The Central Board of Direct Taxes (CBDT), on June 13, 2025, issued a circular outlining the mandatory parameters under which certain Income Tax Returns (ITRs) are selected for complete scrutin
Janvi | Jul 5, 2025 |
What Triggers an ITR Scrutiny Notice? Here is what the IT Department Looks while selecting ITR’s for scrutiny
The Central Board of Direct Taxes (CBDT), on June 13, 2025, issued a circular outlining the mandatory parameters under which certain Income Tax Returns (ITRs) are selected for complete scrutiny in Financial Year 2025–26 (Assessment Year 2025–26).
Survey Cases under Section 133A
If a taxpayer was subject to a survey under Section 133A (excluding 133A(2A)) on or after April 1, 2023, their ITR will be mandatorily scrutinised—regardless of whether any tax evasion was detected.
Search and Seizure under Sections 132/132A
Any search or requisition carried out between April 1, 2023, and March 31, 2025, triggers automatic scrutiny. It has to be noted that searches from September 1, 2024, to March 31, 2025, are restricted to scrutiny of the relevant AY only.
Exemptions Claimed in ITR‑7
Filing ITR‑7 and claiming exemptions under Sections 12A, 12AB, or 10(23C) without valid registration as of March 31, 2024, will lead to scrutiny.
Recurring High-Value Additions
If a taxpayer experienced repeated additions in earlier assessment years that were finalised on appeal and involved Rs 50 lakh or more in metropolitan areas or Rs 20 lakh or more elsewhere, then the current return will be scrutinised.
Specific Tax‑Evasion Information
Any ITR linked with credible intelligence of possible evasion from agencies like CBI, ED, or GST/Regulatory bodies, will also undergo scrutiny.
Here are the timelines for Issuing and Completing Scrutiny Notices:
In addition to the mandatory triggers, the CASS System may trigger Returns that highlight irregularities such as:
Notices are issued with a Document Identification Number (DIN), verifiable on the official portal.
The process is faceless, conducted through NaFAC, in which there is no in-person encounter with officers.
Taxpayers receive a draft order or show-cause notice prior to the final assessment, with the opportunity to respond or request a video hearing.
Taxpayers may also engage the High-Pitched Assessment Committee for disputing high additions.
Below are some tips to avoid scrutiny:
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