The deadline for filing the Income Tax Return (ITR) is now just 13 days away. So far this year, about 4.26 crore taxpayers have filed ITR and around 4.05 crore returns have been verified. Of these verified income tax returns, about 2.84 crore tax returns are processed by the Income Tax Department, which means, about 1.2 crore returns are still not processed.
These return filers are expecting the tax department to process their returns and issue refunds as soon as possible. However, the wait time has been quite long for many taxpayers who reportedly filed their income tax returns a couple of months ago. In such a situation, the question arises as to why their ITRs are not yet processed. Let’s understand the possible reasons behind this slowdown in ITR processing for many this year.
Filing your tax return this year? Head to our detailed ITR Guide for everything you need to know.
This year the Income Tax Department has implemented new rules, under which there will be mandatory complete scrutiny of ITR in certain cases. That is, if your case falls under these prescribed circumstances, then the department will closely examine your entire ITR.
What does ‘complete scrutiny’ mean?
Complete scrutiny means that the tax department will deeply examine the entire ITR of the taxpayer. In this, every information related to your income, deductions, exemptions, investments and financial transactions will be examined on the basis of documents.
In which cases will there be a mandatory investigation?
- Survey cases
If the Income Tax Department has conducted a survey (Sec 133A, except 2A) at your place after April 1, 2023, then your ITR will come under the category of mandatory investigation.
- Search and seizure cases
If there has been a raid or document seizure (Sec 132 or 132A) at your place between April 1, 2023 and March 31, 2025, then such cases will also be automatically included in the investigation.
- Claim of exemption, while registration cancelled
If a trust or institution whose registration under 12A, 12AB, 10(23C) or 35(1)(ii)/(iii) has been cancelled till March 31, 2024, still claims tax exemption, then its ITR will also come under scrutiny.
- Repeated additions
Cases in which additions of more than Rs 50 lakh (metro) or Rs 20 lakh (other places) have been made in the first assessment and it has not been rejected in appeal, will also come under the scope of mandatory investigation.
- Information from investigating agencies
If the department has received concrete information of tax evasion against a taxpayer from CBI, ED or any other agency, then his ITR will also be thoroughly investigated.
In which cases will there be no mandatory investigation?
If the taxpayer has filed ITR after receiving a notice under section 142(1) and the information has come from AIS, TDS-CPC or SFT system, then the case will go to CASS (Computer Assisted Scrutiny Selection).
If only limited third party information is found during a search, then such a case will be sent to the Central Circle only when the senior officer allows it.
Tax experts’ advice
Tax experts say that if a taxpayer’s case falls under these circumstances, then he cannot avoid a scrutiny notice under section 143(2). Therefore, it is important that the taxpayer keep all the necessary documents ready in advance and respond on time when the notice comes.
Summing up…
This new guideline is an important step towards making tax administration transparent and accurate. Taxpayers should enter all the information related to their income, exemptions and investments with complete correctness and evidence while filing ITR. Doing this will not only facilitate investigation but will also avoid unnecessary tax disputes.