Wealth Tax-Scrutiny cases. - Income Tax - 1851/1990

INSTRUCTION NO. 1851/1990 Dated: August 8, 1990 Through Board's Instruction No. 1719 of 24.7.1986, it was decided that where the returned wealth is Rs. 5 lakhs or less, will be dealt with in a summary manner without requiring the assessee to produce evidence in support of the return. Cases where the returned wealth exceeds Rs. 5 lakhs, the assessments should be made after proper enquiry. 2. In view of the provisions of new Section 16 of the Wealth-tax Act, substituted by the Direct Tax Laws (Amendment) Act, 1987, which provide for prima facie adjustments under section 16(1)(a), and also following changes in the procedure for selecting scrutiny cases under the Income-tax, the above instructions is now being modified. 3. The following procedure will be followed for and from the assessment year 1990-91 in respect of all wealth tax returns:- (a) In all cases selected for income-tax scrutiny, the corresponding returns will also be scrutinised. (b) 10% cases will be selected for scrutiny, from Wealth tax returns where the returned wealth ranges between Rs. 5 lakhs and Rs. 10 lakhs; (c) 2% cases will be selected where the returned wealth is less than Rs. 5 lakhs; (d) all cases with returned wealth of Rs. 10 lakhs and above shall be taken up and completed as scrutiny cases. (e) In respect of search cases also, the assessments will be completed after scrutinising the cases and carrying out proper enquiries. 4. The jurisdiction of the wealth tax authorities, of the cases selected for scrutiny, will be as provided in section 8 of the Wealth Tax Act. Thus, howsoever high the net wealth of an assessee is, if the income of that assessee is not high enough to make it assessable with a Deputy Commissioner of Income-tax, the jurisdiction over the wealth tax case would vest with the Income-tax Officer only. 5. This may be brought to the notice of all officers under your charge.