CBDT Directs Income Tax Officials to Ask Only Relevant, Specific Questions During Scrutiny

According to a PTI report dated June 26, 2025, the policy-making body for direct tax administration has instructed principal chief commissioners (PCCITs) to exercise effective supervision over assessing officers to avoid unnecessary and irrelevant questions during assessments and scrutiny proceedings.

PTI has accessed a communication sent by CBDT Chairman Ravi Agrawal to all PCCITs, which states that queries sent by faceless assessing officers (FAOs) to taxpayers should be relevant, specific, and grounded in the specific circumstances of the case in question.

Irrelevant and generic queries must be completely avoided during scrutiny and assessment proceedings, and officers should apply due diligence while framing questions, ensuring that taxpayers are not burdened with unnecessary compliance due to vague or unrelated queries.

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The direction comes at a time when the Income Tax Department is undertaking an increased volume of scrutiny cases, with around 1.65 lakh returns flagged for detailed assessment this year. Taxpayers and professionals have often raised concerns about receiving generic and irrelevant questions during scrutiny, leading to increased compliance burden and uncertainty.

The CBDT’s instruction aims to ensure transparency and fairness in assessments, reduce unnecessary compliance and litigation for taxpayers, promote accountability among assessing officers, and enhance the effectiveness of the faceless assessment system by focusing on case-specific, justified queries.

Taxpayers under scrutiny can now expect more specific and relevant questions from assessing officers, a reduction in irrelevant requests for documents or clarifications, and a more structured and efficient compliance process during scrutiny.

Background

The Income Tax Department recently flagged a higher number of returns for scrutiny for Assessment Year 2025, focusing on unusual cash deposits, GST mismatches, unexplained credits, and M&A discrepancies. The directive to ask only relevant questions aligns with the department’s move towards data-driven compliance while maintaining a taxpayer-friendly approach. The CBDT has asked PCCITs to closely monitor the nature of questions sent out during scrutiny and ensure that assessing officers justify the need for each query before issuing them to taxpayers.

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