CBDT Income Tax Scrutiny Guidelines for FY 2025-26: Key Rules & PDF Download

By Chandni Anandan

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The Central Board of Direct Taxes has released the guidelines for choosing the returns that should be compulsorily scrutinised. For specific search, survey and requisition cases, cancellation or rejection of registration of charitable trusts, scientific research institutions, and organizations eligible for accepting donations under section 80G, specific information available from law enforcement agencies could be grounds for conducting compulsory scrutiny.

This article explains in detail the meaning of compulsory scrutiny, the consequences and the grounds for the same.

What is Compulsory Scrutiny?

  • The Central Board of Direct Taxes decides the basis on which returns filed would be mandatorily selected for scrutiny.
  • It also prescribes the manner in which the scrutiny needs to be undertaken.
  • In this kind of scrutiny, a thorough examination happens on all the particulars of the return filed during the year.

Procedure for Scrutiny

  • Department issues notice u/s 143(2), requiring the assessee to submit required information and records.
  • The assessee submits the information, mostly through online mode.
  • Assessment is carried out usually under faceless assessment scheme.
  • Assessment order is passed within the time prescribed under the act.

Cases for which Compulsory Scrutiny would be undertaken FY 2025-26

The cases which would be selected for compulsory scrutiny for FY 2025-26 are presented in the below table.

S NoCompulsory Scrutiny CasesNotice Issued and Other Points
1Survey conducted under section 133A on or after 01-04-2023Notice for scrutiny assessment u/s 143(2) will be sent 
2Search cases u/s 132 and requisition u/s 132A (from 01-04-2023 to 31-08-2024)Notice u/s 143(2) or 142(1)
3Search cases u/s 132 and requisition u/s 132A   conducted from 01-09-2024 - should pertain only to assessment year 2025-26 for conducting compulsory scrutiny.
4
  • Registration for trusts, scientific research institutions and  institutions receiving donations under section 80G - registrations has either been cancelled or not approved, and 
  • Date of such cancellation or rejection should be on or before 31st March 2024, and
  • Even after cancellation or not being provided registration, the assessee is claiming deduction under ITR-7 for the year 2024-25
Notice for scrutiny assessment u/s 143(2) will be sent 
5Addition in taxable income of the assessee made regarding the same repeating issues that were previously dealt in assessment proceedings.Notice for scrutiny assessment u/s 143(2) will be sent 
6
  • Law enforcement agencies like Investigation wing and other regulatory authorities provide information related to tax evasion in a few cases. 
  • If the return for the relevant assessment year is already filed by the assessee, the department can go ahead with compulsory scrutiny in such cases.
Notice for scrutiny assessment u/s 143(2) will be sent 

Time Limit for Compulsory Scrutiny Notice under section 143(2)

Scrutiny notice for cases selected for ITRs filed in the FY 2024-25, should be sent on or before 30th June, 2025.

Final Word

It is important to reconcile the income reported in the returns and the volume of transactions undertaken by the assessee on filing return. If the income reported is disproportionately small as compared to the volume of the transactions undertaken, there is a high probability of receiving notices from the department, leading to unwanted hassle and adverse consequences.

Download official guidelines for compulsory scrutiny FY 2025-26

Frequently Asked Questions

What is the time limit within which notice will be issued for compulsory scrutiny cases?
Can the cases other than mentioned in the notification be chosen for scrutiny?
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