Income-tax — Instruction No. 6/2009, dated 18-12-2009 F. No. 225/11/2006/ITA. II, Government of India, Ministry of Finance, Dept. of Revenue, CBDT, New Delhi.

To,

All Cadre Control Chief Commissioners of
Income-tax/Directors General of Income-tax

 

Scheme for improving quality of assessments — regarding :

For past sometime the Board has been concerned about the
need for improving general quality of scrutiny assessments on a sustainable
basis. In this connection, reference is invited to Board’s Instruction No.
2/2006, dated 27-4-2006 which required monitoring of scrutiny assessments by
Range Heads under the powers available to them under Section 144A of the
Income-tax Act. Instructions have also been issued from time to time for
strengthening the machinery for review of assessments and inspection of
assessment charges. However, it is felt that there is significant scope for
improving the quality of scrutiny system. The matter came up for discussion
during 25th Annual Conference of Chief Commissioner of Income-tax held in
August 2009. A presentation was made by the CCIT Chandigarh outlining a scheme
for improving quality assessments implemented in NWR Region. After taking into
account various suggestions, it was decided to devise a similar scheme with
appropriate flexibility for country-wide implementation.

2. Accordingly, it has now been decided that the following
scheme for improving quality of assessments shall be implemented from calendar
year 2010 onwards :

(i) At the beginning of each calendar year i.e.,
in the month of January, the Range Head in consultation with the concerned
Assessing Officer would identify at least 5 pending time-barring assessment
cases in respect of each Assessing Officer of his Range for monitoring.
These should normally include cases taken up for scrutiny with the
permission of the CCIT. The selection should be done jointly by the Range
Head and the concerned Assessing Officer. Cases of PSUs and loss-making
concerns should normally not be identified for this purpose. This exercise
should also include those Ranges which are held as additional charge by a
Range Head in January.

(ii) The Range Head would issue directions u/s. 144A in
the identified cases for the guidance of the Assessing Officer regarding the
course of investigation to enable him to complete these assessments in a
proper manner. This should be done at the earliest available opportunity so
as to allow the Assessing Officer to have sufficient time to complete the
assessment proceedings. A copy of the directions issued by the Range Head
would also be endorsed to the CIT. The Range Head should also monitor the
subsequent developments in the assessment proceedings in these cases.

(iii) On completion of the assessment the Assessing
Officer shall send a copy of the assessment order to the Range Head and the
CIT.

(iv) In the event of a Range Head holding more than one
Range, the concerned CCIT may appropriately relax the requirement for issue
of directions u/s.144A in respect of the cases of the Range(s) held as
additional charge.

(v) For the purpose of this instruction, a quality
assessment would be one in which issues arising for consideration are
clearly identified, investigation of basic facts in respect of these issues
is carried out, adequate opportunity to rebut adverse evidence is given to
the assessee, the rival evidence are suitably analysed and evaluate in the
light of correct interpretation of law, and these efforts result in
substantial addition to the returned income. The benchmark for the quantum
of addition to the returned income, which may quality for being a quality
assessment, may be decided by the concerned CCIT depending upon the
potential of the given Range/Charge. Normally, this should not be less than
Rs.5 lakh, excluding additions on account of recurring issues. It is
expected that the selected cases will meet the parameters for quality
assessment.

(vi) As regards the remaining scrutiny assessments, it is
expected that 30% of assessments completed by the Range Head, 20% of the
remaining scrutiny assessments completed by DC/ACIT and 10% of ITOs will
result in quality assessments. These benchmarks can be reviewed once the
scheme has been in operation for some time.

(vii) The parameters for determining whether an
assessment is a quality assessment should be decided by the concerned Chief
Commissioner in the light of the above and should be widely circulated at
the beginning of the calendar year i.e., in the month of January of
every year.

(viii) At the end of the financial year, the data
regarding assessments, completed by Assessing Officers of the CCIT Region
shall be got evaluated by the concerned CCIT in the month of next April
according to the parameters decided earlier. The overall results will be
tabulated in the enclosed proforma and circulated in the CCIT (CCA) Region
for information. Separate performance ranking should be done for Range Heads
in respect of cases completed by them u/s.143(3) out of the cases selected
under Instruction 4 of 2007, dated 16-5-2007, and those monitored by them
under this instruction.

(ix) CCsIT may also devise methods for commending good
performance of AO in the area of quality assessments and reflecting the same
in the annual appraisals. Important cases involving large successful
additions may be reported to the Board in monthly D.O. letters. These can
also be sent to DTI (RSP&PR) for inclusion in the Annual Report of good
assessment cases.

3. These instructions may please be brought to the notice
of all officers working in your Cadre Control region immediately for proper
compliance.

Sd/-

(S.
S. Khan)
Member (Income Tax)sessing Officers