Background:
The Central Board of Direct Taxes (“CBDT”) vide Board’s letter dated September 17, 2020 issued Guidelines for compulsory selection of returns for Complete Scrutiny during the Financial Year 2020-21.
Following time limits were prescribed for completion of certain actions:
- “Selection of cases for compulsory scrutiny on the basis of the prescribed parameters shall be completed by September 30, 2020.
- The Survey Cases with impounded materials have to be transferred to the Central Charges under section 127 of the Income-tax Act, 1961 (Act) within 15 days of issue of notice u/s 143(2) of the Act.
- Search cases u/s I53C of the Act, if lying outside the Central Charges, hove to be transferred to the Central Charges u/s 127 of the Act within 15 days of issue of notice u/s 143(2) of the Act “
Circular:
In this regard, the CBDT issued Circular vide F. No. 225/126/2020-ITA-II dated September 30, 2020, to extend the date for selection of cases for Compulsory Scrutiny on the basis of prescribed parameters, as communicated vide Board’s letter dated September 17, 2020 from September 30, 2020 to October 31, 2020.
Further, clarified that even though the new statutory time limit as per the Taxation and other laws (Relaxations and amendment of certain provisions) Act, 2020 for selection of cases for Compulsory Scrutiny on the basis of prescribed parameters was extended to March 31, 2021, still for the purpose of timely allocation of cases to NeAC, the above time limit will have to be strictly adhered to, otherwise, the allocation of cases to NeAC will get considerably delayed.
Furthermore, for the same reasons as mentioned in para above, the cases covered under the scenarios mentioned in Para (b) and (c) above shall be transferred to the Central Charges by issue of orders under Section 127 of the Income Tax Act, 1961 immediately after service of notice under Section 143(2) of the Income Tax, 1961.
The Circular Can be accessed at: http://www.a2ztaxcorp.com/wp-content/uploads/2020/10/CBDT-CIRCULAR-30-09-2020.pdf