The CBDT has issued a directive dated 11th July 2016 stating that the statutory notice to be issued under section 143(2) of the Income-tax Act has been modified. There will henceforth be three formats of the said notice namely:
(i) Limited Scrutiny
(ii) Complete Scrutiny
(iii) Manual Scrutiny
The revised format of 143(2) notice(s) is attached. The CBDT has directed that all scrutiny notices shall henceforth be issued in these revised formats.
To Invite Attention to the Comment posted on Linkedin /Facebook:
Q
On the first blush, as understood, in place of the erstwhile single format, three separate formats have been prescribed, depending upon whether the ‘roi’ filed is prima facie considered to require ‘limited scrutiny’ or ‘complete scrutiny’ or ‘manual selection’. Ostensibly, the Revenue Secretary has approved of the modification, and the CBDT has gone ahead with the new proposal, so as to serve the administrative convenience of the Revenue. Undoubtedly, that should, if properly implemented and acted upon, benefit taxpayers, low or high, and save them from the hassles and hardships being faced from the present procedural formalities in force.
Pending an in-depth study, and as per tentative understanding, one thing seems to be anyway clear; that is, the ongoing practice of issuance straightaway of a communication through CPC, of a notice of demand or refund, without giving taxpayer an opportunity to be heard is, as is to be guessed, intended to be done away with . Albeit even under the extant law there has been no justification whatsoever for Revenue to do so.
Tentatively, however, in the subject Directive from the CBDT there has been no specific mention made, or explained , hence is wanting in clarity, as to how the announced new procedure is going to take care of the past events; to be precise, of those cases in which any such communication has thus far been sent to taxpayers raising a demand/ refund,- objected to online for varying reasons; such as credit not allowed / short allowed for TDS, but, to the knowledge of taxpayers, are still pending any action for long.
As per one’s information from known sources, there have been cases in which CPC has sent communications on the basis of data as uploaded by jurisdictional AOs, beyond the prescribed time limits for issuance of an intimation u/s 143 (1) or sec 143 (2) Notice, as the case may require.
There could, as visualized, be more points other than those indicated above; which, hopefully, are expected to be taken up , brought to the notice of the Revenue, by taxpayers / the tax advisers infield practice, sooner than later ; with a view to ensuring /to the end of having resolved all such problems pending to be remedied. As is to be noted, the subject directive should be of great help in making a move, successfully, in that direction.
Last but not least, as critically viewed, the directive, if strictly followed and implemented, scope for resort to sec 147 rw sec 148 by AOs, mindlessly so even in cases in which no Intimation u/s 143 (1) or no Notice u/s 143 (2) has been issued, time barred though, should become a thing of the past.
In this context, attention may be usefully drawn to one such instance of a recent origin – in re. Zuari Estate; for a critical analysis of that case, refer the article* displayed on the website of Lci – @
Income tax Law vs. Property Law- A Case (Law) Study
* Text with hyperlinks supplied (-
http://swaminathanv208.blogspot.in/2015/12/normal-0-false-false-false-en-in-x-none.html
Suggest reading additionally, the posted comments @-
Khubchandani Healthparks Pvt. Ltd vs. ITO (Bombay … – itatonline.org
– shared on Facebook as well.
Attention may prudently be drawn to the judgment of Del. HC . for info., and further study @
http://itatonline.org/archives/indu-lata-rangwala-vs-dcit-delhi-high-court/
KEY Note:
Though not made explicit, as is to be gathered, the Directive , in essence, is aimed at ensuring that the issue of a formal Notice u/s 143 (2) is a must, without which no ‘assessment’ could be made. As a corollary, proceeding on that premise and extending it to a logical conclusion, no proceedings could be rightly and validly initiated without issuing a formal sec 143 (2) Notice. And, no need to add, the self-same proposition should hold , with equal force, also to cases in which tax payer has been issued / served with no formal intimation u/s 143 (1) and the prescribed time limit of one year, for doing so, has also expired. Consequently, the controversies, to the contrary, which have been kept alive thus far (look into the analytical study attempted @Income tax Law vs. Property Law- A Case (Law) Study). This is an aspect not having been made explicit in the recent Directive under reference, it needs to be urged that, the CBDT should come out with a circular clarifying that is the correct position in law, and the subordinates should strictly follow and abide, with no more procrastination; and to do so, even in cases in which the said and other related issues are pending, at whatever stage.
Over to knowledgeable tax experts at large, infield practice, inviting to share their own well considered viewpoints, if any, if were in a different / varying perspective. Also, if convinced, closely follow up the matter, effectively, with the CBDT; and to the end of a successful outcome. So that the ongoing years long disputes / litigation , inherently in-fructuous hence entailing waste of time and energy of one and all concerned is put an end to once for all.
TAIL Note:
As specified , these 3 Formats are , –
(#) applicable only in case of taxpayers whose Income-tax jurisdiction falls in the cities of Ahmedabad, Bengaluru, Chennai, Delhi, Hyderabad, Kolkata or Mumbai.