Friday, December 24, 2010

Instruction to improve assessment made u/s 144

Instruction No. 6/2009 [F.NO. 225/11/2006/ITA.II], dated 18-12-2009

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 27.04.2006 which required monitoring of scrutiny
assessments by Range Heads under the powers available to them under
section 144A of 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 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 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 under section 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 evaluated 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 qualify 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% by 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) CCITs may also devise methods for commending good performance of
Assessing Officers 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 be also be sent to DIT (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


Performance Ranking of Assessing Officers

1       2       3       4       5       6

Performance Rankings for Range Heads as Guides

1       2       3       4       5       6


INSTRUCTION NO. 4/2007 [F.NO. 225/6/2007-ITA-II], DATED 16-5-2007

Kindly refer to above

2. Considering the increasing gap between workload and disposal of
scrutiny assessments, it has been decided to entrust the Range Heads
with the responsibility of making assessments in top revenue potential
cases of the Range to be selected on the basis of returned Income.

3. In this regard, targets for disposal of cases by the Range Heads
are prescribed as under:-

S. No.  Charge  Minimum number of cases to be disposed off per year
1.      Corporate       20
2.      Non-Corporate / Mixed / Salaries        30

However, the CCITs, considering the local circumstances and other
factors, may assign more cases to the Addl. CITs. / Joint CITs.

4. It is hereby clarified that the above targets are not applicable to
Central Ranges.

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