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CBDT’s Compulsory Scrutiny Guidelines for FY 2025–26: What Taxpayers Must Know

Published on: June 2025
Author: Alliance Tax Experts – One Stop Solution for Tax & Business Registrations

The Central Board of Direct Taxes (CBDT) has released new guidelines on 13th June 2025 regarding the compulsory selection of income tax returns for full scrutiny during the Financial Year 2025–26.

If you’re a taxpayer, business owner, or exempt entity, here’s everything you need to know to avoid surprises from the Income Tax Department.

What is Compulsory Scrutiny?

Compulsory scrutiny means the Income Tax Department mandatorily selects certain returns for a detailed audit, regardless of CASS (Computer-Assisted Scrutiny Selection). This involves in-depth examination of your transactions, books, and filings.

6 Scenarios That Will Trigger Compulsory Scrutiny in FY 2025–26

1. Survey Cases [u/s 133A]

If a survey (excluding 133A(2A)) was conducted on your business or premises on or after 01-April-2023, your return will be automatically selected for scrutiny.

Action Point: Ensure accurate and complete books of accounts are maintained.

2. Search & Seizure or Requisition Cases [u/s 132 / 132A]

If a search or asset requisition was conducted:

• Between 01-April-2023 and 31-August-2024, or
• Between 01-September-2024 and 31-March-2025,

Your case must be transferred to Central Charges and will go through complete scrutiny.

3. Cancelled or Denied Registrations / Approvals (Exempt Entities)

If your trust or institution had its registration or approval:

• Cancelled or denied before 31-March-2024, and
• Still claims tax exemption/deduction in the FY 2024–25 return (like in ITR-7),

Expect mandatory scrutiny, unless you won in appeal.

4. Recurring Additions in Past Assessments

If you had a recurring issue (e.g., disallowance, transfer pricing, etc.) where:

• Addition exceeds ₹50 lakh (in metro cities), or ₹20 lakh (non-metros),
• It has been upheld in appeal or not appealed at all,

Then your return will again be picked for compulsory scrutiny.

5. Specific Information of Tax Evasion

If the department receives credible, case-specific tax evasion data from:

• Law Enforcement
• Regulatory Agencies
• Investigation Wings

Your return will be scrutinized even if you filed it correctly.

6. Returns Filed After Notices

If you filed returns in response to certain notices like u/s 148 or 142(1) due to surveys/searches:

Those may also be selected under special provisions (with certain exceptions).

Deadline to Issue Scrutiny Notice

The CBDT has made it clear:
All notices u/s 143(2) for compulsory scrutiny must be served before 30-June-2025 for returns filed in FY 2024–25.

Not Considered for Compulsory Scrutiny

Good news! If your return was filed in response to a 142(1) notice based on AIS, SFT, NMS, or CPC-TDS data, it will not be picked for compulsory scrutiny — it may still be selected under CASS-based scrutiny instead.

What Should Taxpayers Do?

Here’s your action plan if you fall under any category above:

???? Maintain accurate financial records and books
???? Keep ready all supporting documents for major transactions
???? File returns on time and completely
???? If your case involves exemption claims or previous additions, consult a professional immediately
???? Respond promptly to any notices and take professional advice

Need Help? We're Just a Call Away!

At Alliance Tax Experts, we help clients stay prepared and compliant. Whether it’s handling scrutiny notices, replying to queries, or representing your case — we offer complete support.

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???? Email: santoshpatil@alltaxfin.com
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