Received an Income Tax Notice? CBDT Reveals 6 Types of ITRs That Will Face Mandatory Scrutiny in FY27

The Central Board of Direct Taxes (CBDT) has released fresh guidelines specifying the categories of income tax returns (ITRs) that will be compulsorily selected for complete scrutiny during FY 2026-27. The move is aimed at improving tax compliance and ensuring closer examination of cases involving surveys, searches, reassessments and suspected tax evasion.

Unlike risk-based scrutiny, where returns are selected through data analytics and red-flag indicators, compulsory scrutiny applies automatically to taxpayers falling within specific categories notified by the tax department.

Taxpayers whose returns are selected receive a notice under Section 143(2) of the Income-tax Act and may be required to provide documents, financial records and explanations as part of the assessment process.

6 Categories of ITRs That Will Face Compulsory Scrutiny

According to the CBDT, the following cases will be automatically selected for detailed examination:

• Survey Cases: Taxpayers whose premises were surveyed under Section 133A on or after April 1, 2024.
• Search and Requisition Cases: Individuals or entities subjected to a search under Section 132 or a requisition under Section 132A on or after April 1, 2024.
• Reassessment Cases: Returns where the Income Tax Department has issued a notice under Section 148 to reassess income that may have escaped taxation.
• ITR-7 Filers Claiming Exemptions Despite Cancelled Registration: Charitable trusts, religious institutions and other entities claiming exemptions even after their registration, approval or recognition has been denied, withdrawn or cancelled.
• High-Value Recurring Tax Disputes: Cases involving additions exceeding ₹50 lakh in metro cities and ₹20 lakh in non-metro jurisdictions, where similar issues have already been decided in favour of the tax department.
• Information Suggesting Tax Evasion: Cases flagged based on information received from law enforcement agencies, intelligence units, regulators or other government bodies regarding suspected tax evasion, undisclosed income, benami transactions, foreign assets or bogus claims.

What Taxpayers Should Know

The CBDT has clarified that notices under Section 143(2) for returns filed during FY 2025-26 must generally be issued by June 30, 2026. If no notice is issued within the prescribed timeline, the return ordinarily cannot be taken up for scrutiny under these provisions.

Taxpayers selected for scrutiny will be required to respond to queries and furnish supporting evidence through the faceless assessment mechanism.

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Conclusion

The CBDT's latest guidelines provide a clear roadmap of the cases that will attract mandatory scrutiny during FY27. While most taxpayers may not be affected, those falling under the identified categories should ensure their tax filings are accurate and adequately supported by documentation. 

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