Letter DO F.NO. 225/97/2012/ITA.II, dated 25-9-2012 — Improving quality of scrutiny assessments

What this is

Letter DO F.NO. 225/97/2012/ITA.II, dated 25-9-2012 was issued by the Central Board of Direct Taxes on 25 September 2012. Its subject is Improving quality of scrutiny assessments - Central Action Plan ('CAP') for Financial Year 2012-13.

This amends the Income-tax Rules. What it changes is the Rules, not the Act — and a rule can never take away what the section gives.

What it does

A demi-official letter to Chief Commissioners on the quality of scrutiny assessments under the Central Action Plan for financial year 2012-13, whose strategy is at Annexure-II, pages 38 to 43 of the Plan document. The Board records that its earlier direction to send a list of the top 100 quality assessments in each charge was not complied with by many Chief Commissioners and that this has been viewed seriously, and that some lists were sent mechanically without bringing out the quality aspect. Chief Commissioners are asked to sensitise Assessing Officers to give focused attention to assessments to be completed by March 2013, to follow the Central Action Plan strategy and to adhere scrupulously to the guidelines for scrutiny cases.

Why it was issued

Analysis of the information sent to the Board showed that the quality of assessments in financial year 2011-12 was far from satisfactory in the majority of cases, and the Board's earlier direction on reporting quality assessments had been ignored.

Who it reaches

Chief Commissioners running assessment charges
Assessing Officers completing scrutiny assessments by March 2013
Assessees whose scrutiny assessments were framed in that period

The instrument, as the Board published it

The words below are the department’s own, reproduced from its published text. Where the department’s copy carried a publisher’s notes after the instrument, those are not reproduced.

Improving quality of scrutiny assessments - Central Action Plan ('CAP') for Financial Year 2012-13
Letter DO F.No. 225/97/2012/ITA.II, dated 25-9-2012
As you are aware, the CBDT has laid special emphasis in the CAP 2012-13 for improving the quality of assessments. In this regard, a strategy has been mentioned at Annexure-II (pgs. 38-43) of CAP Document.
2. The then Member (IT) had asked the Chief-Commissioners of Income-tax ('CCsIT') to send list of top 100 quality assessments in respective charges. This direction of Member was not complied with by many of CCsIT which has been viewed seriously by the Board. It is expected from the field-formation that in future the directions of the Board will not be ignored.
3. Some CCsIT have forwarded the list in mechanical manner without bringing out the quality aspect of the assessments. The analysis of the information supplied to the Board shows that the quality of assessments in the FY 2011-12 has been far from satisfactory in majority of cases.
4. The CCsIT are therefore requested to sensitize the Assessing Officers in their Region to pay focused attention towards the pending assessments to be completed till March, 2013. The strategy mentioned in CAP document should be followed by each Assessing Officer to bring out the quality in assessments. The steps suggested in the guidelines for scrutiny cases should also be scrupulously adhered to.
I am confident that if proper attention is paid to this aspect of work at this stage it will help not only in improving quality of assessments but also in augmenting the post assessment tax revenues.
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What to watch

This is an internal administrative letter on work discipline; it confers nothing on an assessee and creates no right that can be pleaded.
It is a demi-official letter, not a circular under section 119, so it is not Board authority binding the income-tax authorities in the sense a circular is.
The frank admission that the Board itself found the quality of assessments unsatisfactory is sometimes cited in argument, but the letter lays down no standard an assessment must meet.
Its operative period, assessments to be completed by March 2013, is long past.

Where you meet it

Rarely in a proceeding; it surfaces as background in a plea that a scrutiny assessment of that period was framed mechanically.

← Letter [F.no. 279/MISC/M-30A/2011-ITJ], dated 25-9-2012 · Press Release, dated 21-9-2012 →

A circular binds the department, not you and not a court. The Board issues a circular to its own officers. An assessee may hold the department to a circular that helps him; the department cannot hold an assessee to one that hurts him, and the Tribunal and the courts decide the law for themselves.

Source: the Income Tax Department’s own published text — its page for this instrument.