LCI Learning

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

modi kamal (business)     07 July 2010

To Avoid Scrutiny Notices

Dear Friends,

One friend of mine advised me that we should file our returns only next year.e.g for A.Y 2010- 2011,we should file our returns in July'2011,so that I.T people have only  limited period of 6 months to serve us notice u/s 143 (2) & 142 (1).He also told me if it is taxable income,we pay tax well on time,but to file only next year.

Is it a good strategy?It sounds good.

Kindly advice.



 11 Replies

pratik (self working)     08 July 2010

Your friend is right but be clear whether u are falling under the category of tax audit or not if falling under the categaroy of tax audit than u should file the return on this coming sept . Also i would also like to tell u that don't avoid the notice as per mentioned under the section because if dont attain the scrutiny than I.T.Officer can passed ex - parte order as per section 144 of the income tax act, 1961.

So best of luck & never ever avoid the notices given by the I.T. Department atleast.



1 Like

Vineet (Director)     08 July 2010

Poor Strategy!!!!


Even if the return is filed a year later, the department gets time upto six months from the last day of FY in which return is filed. So for AY 2010-11 if you file return in FY 2010-11, department can issue notice u/s 143(2) by 30-9-2011. If return is filed belated in FY 2011-12, department can issue notice upto 30-9-2012.


The scrutiny selection normally happens in the months of Julu-August, so it is immaterial in whatever month of financial year you file your return.


So there is no escape from scrutiny, if your return has something which deserves to be scrutinised or falls within criteria laid by CBDT for selection of cases.


Coming to the flip side which may occur due to non filing of return before due date or at least by end on the relevant assessment year:


1. Interest u/s 234A

2. Any loss cannot be claimed for carry forward

3. Penalty of Rs 5000 u/s 271F if return not filed by end of year

4. Penalty u/s 271B may arise in case of auditable case where audit is not completed by due date

5. Admisnistratively, the assessee may be included in the list of non filers and notice u/s 142(1) may be issued calling for return and subsequent scrutiny. If ceratin additions/ disallowances in such case happen, it is very strong case of levying penalty u/s 271(1)(c)


Why should one plan to avoid scrutiny if everything is bonafide. If not whatever one does, there is no escape

1 Like

modi kamal (business)     08 July 2010

Thank you Veenit Sir.Well said.I fully agree with you.When you are honest why not file your returns on time.I have always been filing my returns in May/June itself. 

modi kamal (business)     08 July 2010


Vieenit Sir,


Can you tell me what are criteria laid by CBDT for selection of cases for scrutiny.




Vineet (Director)     08 July 2010

Every year CBDT issues instruction laying criteria for selection of cases for scrutiny. You can obtain one from your local income tax office. If they don't provide use RTI.


Rema (Advocate)     08 July 2010


Dear Mr. Modi,

I understood that if your Net Income is below than Rs.5 laksh during the Asst. year 2010-11, there is no need of worry about the Scrutiny, subject to your other investments.  If you are liable to file Statutory Annual Return, ofcourse, some precauations are to be taken.  Otherwise, there is no meaning in avoding the proper filing of return.  Further, if you have filed return on or before the due date you are getting an opportunity to revise the retrun at any time before the completion of Assessment.  All the best.


1 Like

Vineet (Director)     08 July 2010

Dear Rema


From where this figure of Rs 5 Lakhs has arrived? For AY 2010-11 even due date for filing return has not arrived leave aside CBDT directions for selection for scrutiny. In fact soon the department will start issuing notices for AY 2009-10.


By the way I know many cases for AY 2008-09 where returned income is much less than Rs 5 Lakhs but cases are being scrutinised.

1 Like

Rema (Advocate)     08 July 2010

Sorry, I have just explained a practical solution.  Already mentioned that if other investments are there there may be chances for scrutiny.  In normal practice, take the Asst. year 2008-09, no such experiences to me or my friends here.  Thank you for the information.


1 Like

Shayan Khan (     12 July 2010

your friend is wrong because notice of scrutiny can be served within 6 months from the end of the financial year in which Return is filed. so even if u file delayed return, scrutiny notice can be issued to you and the period of 6 months shall be counted from the end of the financial year in which you have filed the Returnnnnnnnnnnnnnnnn.


1 Like

Shayan Khan (     12 July 2010

please make a correction in pint no.2. ONLY the loss from business & profession and capital loss can not be c/f if the ROI is not filed within due dates as specified u/s 139(1) of the I.T. Act.

1 Like

Shayan Khan (     13 July 2010

to modi kamal,

 the notice of scrutiny can be issued only to ensure that -

1- Income is not under stated

2- Loss is not over claimed and

3- No short tax is paid....

1 Like

Leave a reply

Your are not logged in . Please login to post replies

Click here to Login / Register