CBDT directs income tax officers to be lenient with taxpayers – Details

Income Tax Department officials have been instructed to ensure due diligence while issuing notices for scrutiny and assessment of taxpayers’ returns. Along with this, CBDT has stressed that all questions should be relevant and specific.

Income Tax News: The Central Board of Direct Taxes (CBDT) has directed the Income Tax Department officials across the country to ensure proper thinking while issuing notices for scrutiny and assessment of taxpayers’ returns. Along with this, the CBDT has emphasized that all the questions should be relevant and specific. The policy-making body for direct tax administration has also asked all the field heads of the department (PCCIT or Principal Chief Commissioner of Income Tax) to keep effective monitoring on their assessment officers and ensure that the questions sent by them to the taxpayers are appropriate.

What is in the CBDT letter?

The letter sent by the office of CBDT Chairman Ravi Agarwal to the PCCIT has directed that the questions sent by the FAO (Faceless Assessing Officer) to the taxpayers should be relevant, specific and based according to the specific circumstances of the concerned case. The letter said the head of the assessment unit (Additional or Joint Commissioner of Income Tax) would be directly responsible for the quality of such notice and assessment order, as it directed him to ensure that due discretion is exercised by the FAO while raising queries.

The CBDT has sought personal cooperation from supervisory officers to ensure that the questions raised by the assessing officers are in line with the recently issued selection criteria for cases falling under scrutiny process. It said that the questions sent by the assessing officer should be ‘reasonable’ and reflect ‘clear thinking’ as specified in the direct tax laws and rules.

What did the PCCIT say?

The CBDT has also directed the PCCIT to interact with the tax assessment officers from time to time, reiterate these instructions and review every month to find out whether the guidelines are being followed or not.

The board has directed the regional heads (PCCIT) to share monthly updated information on the quality of such investigations, assessment orders. The CBDT on June 13 issued annual guidelines and procedure for mandatory selection of income tax returns for full scrutiny during FY 2025-26.

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