438
June 29 To July 5, 2019 u Taxmann’s Corporate Professionals Today u Vol. 45 u 26Thus, both dates are far removed from each
other.
An absurd situation arises. The processing
of return is done later than scrutiny of a
return. The bogey is put in beginning, while
engine comes at the back!- Implications
u Before processing of taxpayer’s return,
the AO would be going for full-fledged
scrutiny.
u Both CPC and AO would be attacking
the return at the same time.
u Even before arithmetical errors are pointed
out by CPC, the AO would be looking
for suspicious high-value transactions.
The taxpayer, who has got ITRV verified
too, would be calmly waiting for 1 year to
elapse, to know whether tax or interest has
to paid or even if he would get refund but
would get a rude shock when a scrutiny
notice lands in 6 months.
As scrutiny notice is starting point of
assessment proceedings or key to assessment.
It affects other provisions like section 143(3),
re-assesment, block assessment, draft assessment,
etc; Hence, the assessee is hit with scrutiny
kicking in before processing.
In case of mismatch between Form 26AS and
return filed by taxpayer, limited scrutiny
starts. Because Form 26AS is ready reckoner
of AO, it is forgotten that mistakes often
creep into this document, solely because of
errors committed by other people, not the
assessee. Tax deduction may go wrong, if
deductor fails to deduct or gives wrong PAN
number of deductee. In such a case, sending
a scrutiny notice to assessee in unseemly
haste is wrong.
A scrutiny notice is sent under section 143(2)
if AO thinks that the assessee has under
estimated income, calculated excessive loss or
underpaid tax in any manner. But for minor
things like omission to mention exempt income,
such as interest from PPF or interest drawn
from savings bank account, the dispatching of
a scrutiny order in 6 months without waiting
for processing time of 12 months does not
seem to be in order.Revenue too Suffers
- AO can’t send a scrutiny notice after CPC
intimation, which comes after 1 year, as more
than 6 months have passed.
Scrutiny’ & E-Filing date Clashes
- In one case E.K.K. & Co. v. Asstt. CIT
[2012] 27 taxmann.com 11/[2013] 144 ITD 636
(Cochin - Trib.) a scrutiny notice was sent
under section 143(2) on 26-8-2011, which was
contested by assessee. The court held that
date of receipt of ITRV, that is, 29-11-2010
was not date of receipt of return. Instead,
the date on which ITRV was uploaded, that
is, 25-9-2009, was correct date. Hence, the
scrutiny notice was beyond six months and,
naturally invalid.
Scrutinise-assessee’s plight!
- A person looking at red markings on
desk calendar of friend exclaimed: “Wow
! So many birthdays and anniversaries to
remember.” The companion replied; “After
getting scrutiny notice, these are all the dates
on which I have to attend the income tax
proceedings.”
The worst part of curious scrutiny time limits
is that the assessee is left on tenterhooks
for a whole year. He does not know when
scrutiny notice may appear like a bolt from
the blue. He also is unaware of when Form
26AS would strike. He is totally in the dark
about when CPC would ask for corrections.
SCRUTINY NEEDS SCRUTINY