Introduction:
The Central Board of Direct Taxes has issued a circular(1) stating that scrutiny assessment proceedings shall be carried on electronically with effect from the current financial year of 2017-2018. It has been further clarified that there will be no requirement of personal appearance before the authorities with an exception of certain clauses. This circular is also applicable in the case of limited scrutinies, complete scrutinies, and manual scrutinies.
Changes brought forward:
- All communication between the taxpayer and the authorities shall be carried out via electronic mode only.
- No personal appearance is required even if there is an comprising stand of the tax payer
- Tax payers have to keep their email-ids and as well as the portal in active use to be abreast of the proceedings and maintain the correspondence records.
- The proceedings can be carried effortlessly irrespective of the tax payer’s location.
- There is no option of choosing manual or online proceedings. The tax payer has to do the assessment via online proceedings.
Cases where personal appearance is mandatory:
- When the scrutiny assessment is carried under the section 153A and 153C of the Income Tax Act(ITA);
- If the original documents or books of accounts are to be scrutinized;
- By the enforcement of section131 where the attendance of the tax payer is compulsory;
- If a there is a witness examination;
- If a show cause notice is issued and the tax payer requests a meeting with the authorities.
CBDT has simplified the process of scrutiny assessments and has ensured a way for greater transparency. It is still unclear whether this circular is also applicable for the previous financial years scrutiny assessments. This move in transparency will highly assist the taxpayers in the regards of scrutiny assessment.
