The main aim of scrutiny assessments according to the IT Act is to find out that the assesses has not understated his income and has not refrained from paying the exact tax requirement.
Chandigarh, India -- (SBWIRE) -- 02/14/2014 -- A good way to find out whether an individual has stated his income accurately or has not underpaid his tax requirement is a scrutiny assessment according to the IT Act. The cases that are chosen for scrutiny are analyzed by scrutiny officers. The officers who look into these assessments conduct enquirers, searches and surveys to find out the taxable income and liability of the concerned person.
In course of framing the assessments, relevant information is collected and studied to find out more about the correct taxable income. The assesses is given full liberty to place all his explanations on the findings of his enquiry.
The complete process of framing scrutiny assessments and the targets for completing the assessments is contained in the document of Central Action Plan in agreement to the courses given to all Chief Commissioners of Income Tax and all Director Generals of Income Tax. The document contains the list of all the categories of cases or returns that fall under scrutiny.
Some of the categories included in the list of document of Central Action Plan include cases with international transaction exceeding 15 crores as defined under section 92B of IT Act and cases claiming exception of income under section 11 or under section 10(23C) which are affected by provisos to Section 2(15) of IT Act. It also includes all the returns files in response to notice under section 147/148 of the IT Act. Also, the entities that have obtained contributions from countries abroad in excess of INR1crore during the financial year under the provisions of Foreign Contribution Regulation Act (FCRA) are included in the list.
The entire process of scrutiny assessment commence with the issue of Notice under the section of 143(2). The notice is issued by the assessing officer and the entire process comes to an end by passing an assessment order. The outcome of this process can result in an increase in the declared income, decrease in loss claimed, and increase in the tax liability or reduction in the refund that claimed. If required, the assessment would result in penalizing the assesses even.
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