Armed with data from annual information returns, the revenue department has re-worked the parameters of the computer assisted system for selecting cases for scrutiny.
It has also directed its field formations to complete processing of all income tax returns for the assessment year 2005-06 by August 31.
The Central Board of Direct Taxes has also decided that a proper monitoring mechanism will be put in place to examine the effect of the AIR information on the widening and deepening of the tax base.
The department has prepared a detailed circular on how to use the information in the AIR relating to 2004-05 in the assessment year 2005-06.
For each AIR, the department will prepare an individual transaction statement (ITS). The ITS will then be segregated into ITS with permanent account numbers and those without PANs.
An ITS that is not accompanied by a PAN will be passed through an in-house search engine developed by the Directorate of Income Tax MIPPRA (multi-iterative phonetic pattern recognition algorithm). The AIR whose PAN is not thrown up even by the search engine will receive fresh notices later this year.
Officials said it had been decided that the tax returns filed after the issuance of a notice would be picked up for compulsory scrutiny.
In cases where the assessee was not traceable at the address mentioned in the AIR, the field formation would contact the AIR filer for getting the correct address of the taxpayer, they said.
Officials said detailed instructions had also been worked out in the case of AIR information accompanied with PAN but where no returns had been filed. The AIR module will soon have a facility wherein a list of non-filers would be made available to the assessing officers.
In stations which are not fully computerised, the identification of non-filers would be done by cross checking the PAN in the return receipt register with the PAN contained in the AIR information.