INCOME TAX

INSTRUCTION NO. 4/2006

 Dated : May 16, 2006

Sub :- Scrutiny Guidelines in respect of Wealth Tax cases

It has been noted by the Board that the collection of Wealth Tax has not shown any increase over the past seven years and is stagnant at about Rs 145 crores annually. Further, the number of wealth tax assessees is showing a continuous decline over the years and is presently at about 1 lakh. It appears that a large number of assesses are either not filing their return of wealth or not disclosing true taxable wealth. Accordingly, the Board has decided to issue the present Scrutiny Guidelines for Wealth Tax cases.

1. All those Income Tax cases which are presently being scrutinized under the provisions of Income Tax Act as per the Scrutiny Guidelines issued by the CBDT should also be examined from the wealth tax angle. Further, out of these Income tax cases under scrutiny, notice under section 16(2)/16(4)(i) of the Wealth Tax Act should be issued in suitable cases after examination.

2. In addition to above, if CCIT/DGIT on his own motion or on the matter having been brought to his notice by an authority below, is satisfied that a Wealth Tax case need to be taken up for scrutiny, the CCIT/DGIT may direct the Assessing Officer to take up the case for scrutiny.

F. No. 326/2/2005-WT

(Praveen Kishore)
Under Secretary to the Govt. of India.