INCOME TAX

INSTRUCTION NO. 1967/1999

 Dated: June 7, 1999

Section(s) Referred: 143(3)

Statute: Income - Tax Act, 1961

Subject : Guidelines for selection of cases for assessment under section 143(3) of the Income-tax Act, 1961 - regarding.

The following parameters shall henceforth apply for selection of cases for assessment under section 143(3).

(i) The concept of limited scrutiny introduced vide Instruction no. 1938 dated 17th May, 1996 (F.No. 225/11/96-ITA-II) as modified from time to time will no longer be applicable.

(ii) The selection of cases for assessment under section 143(3) will be based on specific information. The information should be credible and the application of mind leading to selection of a case should be at two levels. The cases should be picked up in a joint meeting of the Assessing Officer and his next superior authority for reasons to be recorded in writing. They should also ensure that cases of large revenue potential are not left out of the selection process.

(iii) There will be no common fixed quota for assessment in respect of various levels of Assessing Officers. However, the CCIT/DGIT shall determine the number of assessments under section 143(3) in respect of each Assessing Officer having regard to the nature of cases and the available workload. Chief Commissioners/Directors General will have over all responsibility for even distribution of work among different assessment units.

(iv) All assessments relating to

(1) search and seizure,
(2) survey under section 133A,
(3) re-assessment under section 147,
(4) set aside assessment and cases where assessment under section 143(3) becomes mandatory in order to comply with directions of the Supreme Court/High Court/Special Courts, will continue to be made under section 143(3).
(v) The end results/findings of an assessment under section 143(3) should justify the selection of a particular case. For this purpose, certain objective parameters such as establishing concealment of income making out a case for prosecution or high revenue yield etc. may be laid down by the Chief Commissioner/Director General. Accountability of the Assessing officer and his/her immediate supervisor can be ensured by this process.

4. It is clarified that the procedure for picking up cases for assessment under section 143(3) spelt out herein above, will apply to all pending returns where decision for selection for scrutiny has not been taken and also in respect of all returns filed after 1.4.99.

5. The selection for assessment under section 143(3) under these instructions shall be completed on or before 30th September of the financial year. The concerned assessees should be informed individually about their cases having been selected for assessment under section 143(3) by the concerned Joint Commissioner/Additional Commissioner.

6. In exceptional cases, for reasons to be recorded in writing, the Chief Commissioners/Directors General may approve selection of any case for assessment under section 143(3) even after 30th September of the financial year.

7. The Chief Commissioners/Directors General will issue a Press Note immediately after the individual letters are issued to assessees specifying the fact that the process of selection for assessment under section 143(3) has been completed and that the assessees have been so intimated.

8. The ban on transfer of jurisdiction from one Assessing Officer to another (except with the prior approval of the Board) introduced during the last year will remain in force till 1.4.2000.

9. The Chief Commissioners/Directors General in their monthly D.O. letter will specfically indicate the progress of implementation of these instructions with appropriate details in order to enable the Zonal Member to monitor the same.

F.NO. 225/126/99-ITA-II

(R.N. Dash)
Director