The Central Board of Direct Taxes (CBDT) has just dropped some significant updates regarding Income Tax Return (ITR) filing for 2025, particularly concerning mandatory scrutiny. If your case falls into certain categories, it’s highly likely you’ll be getting a notice.
New Rules for Mandatory ITR Scrutiny
The CBDT has outlined specific conditions that will trigger mandatory scrutiny of your income tax return. If your situation matches these, expect a notice under Section 143(2) – there’s no avoiding the investigation in these cases.
Here’s when your return will face mandatory scrutiny:
- Survey Cases: If a survey was conducted on you under Section 133A (excluding 133A(2A)) after April 1, 2023.
- Search/Seizure Cases: If any action under Section 132/132A (search or seizure) took place between April 1, 2023, and April 1, 2025.
- Cancelled Registrations: For institutions whose registration was cancelled under Section 12A, 12AB, or 10(23C) before March 31, 2024.
- Large Additions in Past Cases: If your income saw a significant addition (over ₹50 lakh in metro cities or ₹20 lakh elsewhere) in a previous assessment, and that addition wasn’t appealed or the appeal was dismissed.
- Information from Agencies: Cases flagged by investigative bodies like the CBI, ED, or other legal agencies.
- Risk Management System: If your financial transactions are identified as high-risk by the department’s system.
- Reopened Assessments: If your previous assessments have been reopened.
A crucial point to note: As clarified by the CBDT and highlighted by Vivek Jalan, Partner of Tax Connect Advisory Services, these mandatory scrutiny cases cannot be closed without the explicit approval of the Principal Commissioner of Income Tax (PCIT). This adds an extra layer of oversight to the process.
When You Won’t Face Mandatory Scrutiny
Not all cases will be subject to this strict mandatory investigation. Some will still be handled under the Computer Assisted Scrutiny Selection (CASS) system, which often involves limited scrutiny. You’re off the mandatory hook if:
- You filed your return in response to an automated notice under Section 142(1).
- Your case is based solely on information received from AIS, SFT, or CPC-TDS.
Be Prepared!
If your case might fall under mandatory scrutiny, the best defense is preparedness. Make sure you have all your documents ready to respond promptly and accurately to any notice. This proactive approach can help you avoid further tax demands.
Stay informed, and ensure your ITR filing is on point!