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Taxman to tighten noose,studies returns closely
December, 02nd 2006

Concealing income from the taxmen will be a tougher proposition now. The income tax department proposes to tighten the scrutiny of returns filed by tax payers. At present, the department carries out scrutiny of only 2% of the total tax returns. This ceiling may now be enhanced. Even the norms for carrying out the scrutiny may be tightened. This is important for detecting evasion or concealment of income, sources said. The scrutiny procedures have to overhauled to make them more scientific and effective, they said.

The scrutiny for the assessment year 2004-05 has to be completed by December 31, 2006. The department is also looking to tweak procedures to improve the quality of scrutiny. The department has been under pressure due to shortage of manpower for carrying out scrutiny.

But with e-filing, the department is working towards an electronic environment and some changes are required in the norms for selection of cases. This year, the computer-aided scrutiny selection (CASS) system, which selects cases for scrutiny at random, has picked up 1.5 lakh cases for scrutiny in 60 cities. However, commissioners have also been allowed to pick up cases locally for scrutiny.

For the first time this year, the department will be carrying out scrutiny using the information from the annual information returns. The department has already issued instructions on scrutiny based on AIR to prevent harassment of assessees. But with the information flow increasing, it is examining overhauling the norms.

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