Criteria for income tax manual selection of returns for Complete Scrutiny during the financial-year 2018-2019- CBDT Guidelines
Instruction No. 04/2018
Government of India
Ministry of Finance
Department of Revenue
Central Hoard of Direct Taxes (ITA-II division)
North Block New Delhi the 20th August 2018
To
All Pr. Chief-Commissioners of Income-tax/Chief-Commissioner of Income-Tax
All Pr. Directors-General of Income tax/Directors-General of Income-tax
Sir/Madam
Subject: Guidelines for manual selection of returns for Complete Scrutiny during the financial-year 2018-2019-regd.
1. The parameters for manual selection of returns for Complete Scrutiny during financial year 2018-19 are as under.-
(i) Cases involving addition In an earlier assessment year(s) on a recurring issue of law or fact-
a. exceeding Rs. 25 lakhs in eight metro charges at Ahmedabad. Hengaluni, Chennai, Delhi. Hyderabad. Kolkata. Mumbai and Pune, while at other charges, quantum of add non should exceed Rs. 10 lakhs;
b. It exceeding Rs. 10 crore In transfer pricing cases
and where such an addition-
1. has become final as no further appeal was/has been filed; or
2. has been confirmed at any stage of appellate process In favour of revenue and assessee has not filed further appeal, or
3. has born confirmed at the 1st stage of appeal in favour of revenue or subsequently and further appeal of assessee is pending
(ii) Cases pertaining to Survey under section 133A of the Income-tax Act. 1961 (‘Act’) excluding those cases where books of accounts. documents etc. were not impounded and returned income (excluding any disclosure made during the Survey) is not less than returned Income of preceding assessment year. However, where assessee has retracted from disclosure made during the Survey, such cases will nut be covered by this exclusion.
(iii) Assessments In search and seizure cases to be made under section(s) 153A. 153C, 158B, 158BC & 158BD read with section 143(3) of the Act and also for return filed for assessment year relevant to previous year in which authorization for search and seizure was executed under section 132 or 132A of the Act.
(iv) Returns filed in response to notice under section 148 of the Act
(v) Cases where registration/approval under various sections of the Act such as 12A, 35(1)(ii)/(iii), 10(23C) etc. have not been granted or have been cancelled/withdrawn by the, Competent Authority, yet the assessee has been found to be claiming tax-exemption/deduction in the return. However, where such orders of withdrawal of registration/approval have been reversed/set-aside In appellate proceedings, those cases will not be selected under this clause
(vi) Cases In respect of which information pointing out specific tax-evasion for the relevant year is given by any Government Department/Authority/Agency/Regulatory Body. However, before selecting a return for scrutiny under this criterion, Assessing Officer shall take prior administrative approval from concerned jurisdictional Pr. CIT/Pr.DIT/CIT/DIT.
2. Through Computer Aided Scrutiny Selection (CASS), cases are being selected in two categories viz. Limited Scrutiny & Complete Scrutiny in a centralized manner under CASS-2018. CASS is a system based method for scrutiny selection which identifies the cases through data-analytic and three-hundred sixty degree data profiling of taxpayers and In a non-discretionary manner. The list of these cases is being/has been separately Intimated by the Principal DCIT (Systems) to the concerned Jurisdictional authorities for further necessary action.
3. This may be brought to the notice of all concerned for necessary compliance.
4. Hindi version to follow.
(Rohit Garg)
Director-ITA.II, CBDT
F.No. 225/282/2010/ITA.II
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Capital Market Updates
Britannia Industries intends to split its share from Rs.2 paid-up to Re.1 in order to increase liquidity in the counter
while making it more affordable to small retail investors. The company has huge expansion plans and is still an
excellent buy.
Atlantia SpA, Cube Highways and Caisse de depot et placement du Quebec (CDPQ) are in separate discussions to
acquire 35-40% stake in Sadbhav Infrastructure Project Ltd (SIPL).
Buy Sadbhav Engineering, which holds ~70% stake in SIPL
- The government has asked Oil & Natural Gas Corporation to list its wholly-owned subsidiary - ONGC Videsh Ltd
(OVL) on stock exchanges and transfer the proceeds in the form of a special dividend.
Buy ONGC for good returns in the next few months.
The US administration has slapped heavy anti-dumping duties on Indian metal pipes. Off-load Jindal Saw and
Welspun Corp as they are most likely to suffer.
Prataap Snacks intends to buy 80% stake in Avadh Snacks in order to consolidate its position in the market. Buy.
Force Motors may acquire Man Trucks’ Pithampur facility. A big positive for the company. Also, this stock is yet to
participate in the on-going market rally.
V-Mart Retail has chalked out plans to add 35 stores in this fiscal.
Buy for the long-term.
Aluminium prices are on the rise. National Aluminium Company (NALCO) has the potential to rise by 50% within
a year.
Cement maker Prism Johnson has got on lease a limestone mine for captive use for 50 years..
A positive for the Company. Buy.
Indian coal is expected to become costlier due to rising international prices and shortage in the country.
Buy Coal India.
Reports suggest that truck and tractor sales have recorded higher volumes. Mahindra & Mahindra and Escorts
may benefit significantly in this booming market.
Buy for the long-term.
TVS Motor Company intends to boost its sales by targeting a volume of 2 lakh units of bikes this year.
A decent buy.
The debt burden of IL&FS Transportation Networks is going beyond control and auditors have red-flagged related risks..
Exit immediately.
Bandhan Bank joins the fray to acquire a controlling stake in PNB Housing Finance. A tug-of-war is quite likely to
take the latter’s share price higher.
Simplex Infrastructures, which is in a sweet spot due to healthy traction of orders, expects ~40% jump in
profitability in the next 2-3 years.
Buy for the long-term.
Hit by financial crisis, Hindustan Construction Company has decided to cut 10% of its Lavasa staff. It may be prudent to stay away from this counter for some time until the dust settles.
Emami is eyeing acquisitions in the international markets and the management is confident of its actions. Buy for the long-term.
The affordable housing incentives make housing finance companies such as Dewan Housing Finance Corporation (DHFL) and Indiabulls Housing Finance look attractive. Both the stocks are likely to continue their upward march.
Accumulate.
Larsen & Toubro plans to utilise Rs.9000 crore of its surplus cash to buy back its own shares at Rs.1500/share. Since the offer is lucrative and its working is strong, investors may offer their holding to take advantage of the market swings and enter again when the markets cool down.
TTK Prestige, which trades at high valuations, is still being tipped as a good buy on the back of growing rural income. Accumulate in small lots for the long-term.
Cosmo Films has launched a cast polypropylene (CPP) metalized film with high metal bond strength. This innovation augurs well for the company.
Buy.
Astrazeneca Pharma has received Import and Market permission from the Drugs Controller General of India for its Olaparib tablets, used to treat cancer. A positive for the company.
*Namaskaram*!
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# ICAI releases ICAI Valuation Standards effective for the valuation reports issued on or after 1st July, 2018.
# ICAI: CCBMP publishes an E-Book on “Ready Reckoner on Regulatory Aspects of Articled / Audit Assistants: Capacity Building for CA Firms & Practitioners”.
# GST: The modus operandi adopted by the petitioner is to transport the goods without e-way bill and as and when he is caught and the Truck is detained, he will make payment of tax and get the Truck released - HC refuses to grant any relief - Vanrajbhai Hasmukhbhai Chauhan Vs. State of Gujarat (2018 (8) TMI 1376 - Gujarat HC).
# IT: Method for estimating the income in the previous year on the basis of net profit at a particular rate while finalising the assessment u/s144 of the Act cannot be applied for all subsequent years - Order of ITAT set aside - Pr.CIT Vs. Raees Alam Siddiqui (2018 (8) TMI 1372 - Allahabad HC).
