A S BANKA ADVISORS

Every June, a quiet sorting happens inside the Income-tax Department. Most returns filed in the previous year are left alone. A small set is pulled out for complete scrutiny, and for those taxpayers the next eighteen months look very different. The CBDT has now published the rulebook for that sorting for FY 2026-27, and if your company sits in any of six defined boxes, a Section 143(2) notice is not a risk. It is a scheduled event with a hard date.

What the guidelines actually are

The Guidelines for Compulsory Selection of Returns for Complete Scrutiny, FY 2026-27, were issued under F.No. 225/56/2026/ITA-II dated 4 June 2026. They are framed under Section 536(2)(c) of the Income-tax Act 2025, the transitional saving clause, because they apply to returns filed during FY 2025-26 whose substantive law is still the Income-tax Act 1961 (Assessment Year 2026-27). The headline point for founders: selection here is mandatory and rule-based, not discretionary. If you fall in a category, you are in. If you do not, you are out of this list entirely.

The six triggers

1. Survey cases (CS-01): a survey under Section 133A on or after 1 April 2024 (limited TDS/TCS surveys excluded).
2. Search and requisition (CS-02): a search under Section 132 or requisition under Section 132A between 1 April 2024 and 31 March 2026.
3. Reassessment (CS-03): Section 148 cases linked to a prior search or survey, and reassessments time-barring by 31 March 2027.
4. Trusts that lost registration (CS-04): charitable entities whose approval under Sections 12A, 12AB, 35 or 10(23C) was cancelled or denied on or before 31 March 2025 but that still claim exemption in ITR-7.
5. Recurring additions (CS-05): a repeated addition on the same issue, including transfer pricing, upheld in appeal or now final, above Rs 50 lakh in the eight metro charges or Rs 20 lakh elsewhere.
6. Enforcement information (CS-06): any return flagged for tax evasion by the ED, CBI, GST authorities, SEBI, FIU or an Investigation Wing.

Why this matters for a growing company

Two of these categories are where venture-backed and fast-scaling businesses actually get caught. CS-05 is the silent one. If an earlier-year addition on share-premium valuation, a related-party transaction or an unexplained credit was upheld and crossed the threshold, the same issue this year pulls you in automatically. CS-06 is the external one: information from a regulator or enforcement agency about any group entity can route your return straight into complete scrutiny.

There is also a structural point worth knowing. Selected cases move to the National Faceless Assessment Centre, except International Taxation and Central charges, which stay with a jurisdictional officer. So a startup with cross-border structuring or transfer-pricing exposure does not get the faceless route by default. And an open assessment, faceless or not, has a habit of surfacing in the middle of a fundraise, where a diligence team will ask why it is unresolved.

The date that ends the window

The last date for serving a Section 143(2) notice for FY 2025-26 returns is 30 June 2026. That date is jurisdictional: if the notice is not served by then, complete scrutiny cannot proceed under these guidelines. Consolidated lists for CS-05 and CS-06 go to the Directorate of Systems by 15 June. In practice, that means the next three weeks decide who gets a notice.

What to do before 30 June

• Reconcile your FY 2025-26 return against the Annual Information Statement, Form 26AS and your audited financials. Mismatches are the first thing an assessing officer pulls.
• Assemble the documentary file for any prior-year addition that became final or was upheld. If CS-05 applies, you will be defending the same issue again.
• If you claim a trust or institutional exemption, confirm your registration status is intact.
• Watch the e-filing portal daily through June. The notice is served electronically and the clock starts on service.

None of this requires waiting for the notice. The taxpayers who handle scrutiny well are the ones who built the file in June, not the ones who started reading the law in July.

Download the full carousel PDF: The Six Triggers for Compulsory Scrutiny.

Not sure whether your return fits any category? Get Expert Guidance before the window closes. CA Adityavikram Banka, Founder, A S Banka Advisors Private Limited. Book a quick call: https://calendly.com/asbanka-info/30min