Income Tax Case selected for scrutiny
Where a return has been filed u/s 139 or in response to notice u/s 142(1), the case can be selected for scrutiny assessment if the Assessing Officer considers it necessary or expedient to ensure that-
(a) the assessee has not understated the income or has not computed excessive loss; or
(b) has not underpaid he tax in any manner.
If a case is selected for comprehensive scrutiny, the notice u/s 143(2) must be served on the assessee before the expiry of 6 months from the end of the financial year in which return was furnished.
Usually, in practice it is seen that the Assessing Officers also consider the amount of turnover, rate of gross profit, total income, quantum of loans taken, investments during the year, in case of companies increase in paid up capital etc. for selecting a case for scrutiny. Sometimes, on the basis of report of survey and other information also, the case may be selected for scrutiny u/s 143(2). However, the selection is done from time to time as per guidelines framed by the CBDT.
Now a days most of the cases are selected based on the system of CASS (Computer assisted scrutiny system). There are many criteria in CASS.
Eg:1. Business of real estate with turnover more than 5 crores.
2. Assesments pertaining to search, survey cases etc