You can know what final income tax scrutiny order contains even before it is issued

Time of India

01-07-2025

What did CA post on X about the current Income Tax Scrutiny process?
Can you actually see the final order before it is issued?
What is Income Tax Scrutiny?
The Income Tax Department recently highlighted a Chartered Accountant 's post on X regarding the working of the current income tax scrutiny process. The Income Tax Department stated that the post by the CA highlights the transparency and accountability measures in place, such as selection of only a minuscule percentage of cases for scrutiny, DIN-based verifiable notices, the faceless assessment system, ample opportunity for taxpayers to present their cases, and taxpayer safeguards in the form of High-Pitched Assessment Committees etc.According to the post on X, Pradeep Goyal, a chartered accountant, said the following:Scrutiny is conducted every year for very small % of total returns filed. Notices are issued under DIN so no scope of sending fake notices in order to blackmail you. Check the authenticity of the notice using DIN at the portal.There are two types of selection- CASS & Compulsory (limited or full).Most of the cases are under limited scrutiny wherein officers limit herself to those specific points.Scrutiny is conducted in a totally faceless manner and no scope of bribe and harassment. You will get ample opportunities to reply. Draft order will be issued before final order.High pitched assessment committee is there whom you can approach if unjustified additions are made.The post by the CA further stated, 'Don't pay money in the name of officers to anyone. Scrutiny is totally faceless and assessing officers are unknown for everyone. Assessment is conducted by assessment units.'One of the interesting points is that the taxpayer will know that the final scrutiny assessment order is contained even before it is issued. This is because the Income Tax Department will issue a draft order before the final order.Tarun Kumar Madaan, a practising chartered accountant, says, 'Under the faceless assessment regime, the Income-tax Department is required to issue a draft assessment order or show cause notice where any variation prejudicial to the interest of the assessee is proposed. This provision ensures that the assessee is afforded a fair opportunity to respond before the final order is passed. It is a welcome safeguard aligned with the principles of natural justice. The law mandates that a reasonable opportunity of being heard must be provided to the assessee. Upon receipt of the show cause notice or draft assessment order, the assessee (or their authorised representative) may also request a personal hearing, including the option to make oral submissions through video conferencing before the designated income-tax authority or unit.'Adding further, he said, 'Failure to grant such an opportunity for personal hearing, particularly when requested, may amount to a violation of the principles of natural justice and could render the assessment order susceptible to legal challenge. However, in practice, it is often observed that Assessing Officers (AOs), having already formed a predetermined view at the stage of the draft order or show cause notice, proceed to finalise the assessment without adequately considering the assessee's objections. This undermines the very objective of the provision and compels the assessee to seek appellate recourse against such final assessment orders.''This trend is contributing to a substantial buildup of cases before the Commissioner of Income-tax (Appeals), further straining the already burdened appellate machinery. With significant delays in the disposal of appeals at the CIT(A) level, genuine taxpayers are often left waiting for years to obtain relief. Further, a primary procedural concern arises from the timing of these notices. In many instances, show cause notices and draft orders are issued toward the end of the limitation period for completing the assessment, thereby leaving insufficient time for meaningful engagement by both the AO and the assessee. This last-minute approach compromises the quality of the assessment and defeats the intended objective of a fair, participative, and transparent process,' the CA stated.Lastly, he said, 'There is a pressing need to institutionalise timely and continuous communication between the Department and the assessee throughout the assessment cycle, rather than deferring critical interactions to the final days before the time bar.'The Income Tax Department issues notices under Section 143(2) to the taxpayer when his/her income tax return is selected for scrutiny assessment. The income tax notice can also be issued under Section 143(3) for a detailed assessment.Scrutiny assessment or detailed assessment is carried out to confirm the correctness and genuineness of various claims, deductions, etc., made by the taxpayer in income tax return. The objective of this scrutiny assessment is to ensure that you have filed the tax return with the correct income and paid the tax accordingly.