CBDT Compulsory Scrutiny Guidelines FY 2026-27: The Six Categories That Trigger a Section 143(2) Notice by June 30, 2026
Quick Summary: CBDT Compulsory Scrutiny Guidelines for FY 2026-27
- What changed: The CBDT has released its annual Guidelines for Compulsory Selection of Returns for Complete Scrutiny during Financial Year 2026-27 vide F.No. 225/56/2026/ITA-II dated 4 June 2026, issued under Section 536(2)(c) of the Income-tax Act, 2025.
- Who it covers: Income-tax returns filed during FY 2025-26 (Assessment Year 2026-27), which continue to be governed by the Income-tax Act, 1961.
- Six categories (CS-01 to CS-06): survey cases, search and requisition cases, reassessment cases, trusts and institutions with cancelled or denied registration, recurring additions on the same issue, and cases flagged by enforcement or regulatory agencies.
- Two hard deadlines: consolidated lists for the recurring-additions and enforcement categories must reach the Directorate of Income-tax (Systems) by 15 June 2026; the Section 143(2) scrutiny notice must be served on or before 30 June 2026.
- Action point: If your case falls in any of the six buckets, expect a Section 143(2) notice by 30 June 2026. Reconcile your FY 2025-26 return, books, and disclosures now so you are not assembling evidence after the notice lands.
What Are the CBDT Compulsory Scrutiny Guidelines for FY 2026-27?
Every year the Central Board of Direct Taxes (CBDT) issues guidelines telling its field officers exactly which income-tax returns must be picked up for complete (manual) scrutiny, as distinct from the returns selected by the computer-driven Computer Assisted Scrutiny Selection (CASS) system. The guidelines for FY 2026-27 were issued on 4 June 2026 under F.No. 225/56/2026/ITA-II.
This year the guidelines carry a transition twist. They are the first set issued under the Income-tax Act, 2025, which took effect on 1 April 2026. The empowering provision cited is Section 536(2)(c) of the Income-tax Act, 2025, the saving and transitional clause that allows the procedural machinery of the repealed 1961 Act to continue operating for returns and assessments relating to earlier years. Because the returns being selected were filed during FY 2025-26 and relate to Assessment Year 2026-27, the substantive provisions and section references in the guidelines remain those of the Income-tax Act, 1961 (Section 133A survey, Section 132 search, Section 148 reassessment, Section 143(2) scrutiny notice). The 2025 Act supplies the authority to keep that machinery running during the cutover, the same Section 536 saving mechanism we covered in our analysis of loss carry-forward continuity across the April 1, 2026 cutover.
In plain terms: if your return for FY 2025-26 fits one of six descriptions, the Assessing Officer has no discretion. The case must be selected for full scrutiny, and you should expect a notice under Section 143(2).
The Six Categories of Compulsory Scrutiny (CS-01 to CS-06)
The guidelines list six parameters. If your return matches any one of them, selection is mandatory.
CS-01: Survey Cases under Section 133A
Returns of taxpayers where a survey under Section 133A of the Income-tax Act, 1961 was conducted on or after 1 April 2024 are compulsorily selected. Surveys carried out under Section 133A(2A) (the limited survey for verification of TDS/TCS compliance) are excluded from this trigger.
CS-02: Search and Requisition Cases under Section 132 / 132A
Cases where a search under Section 132 or a requisition under Section 132A was initiated after 1 April 2024 are compulsorily selected. For searches initiated on or after 1 September 2024, the selection follows the block-assessment scheme, covering the relevant block of assessment years.
CS-03: Reassessment Cases (Section 148)
Two situations are covered. First, search or survey-linked reassessments where a notice under Section 148 has been issued. Second, other reassessment cases that remain pending completion and are getting time-barred by 31 March 2027. These are pulled into compulsory scrutiny so they are not lost to limitation.
CS-04: Trusts and Institutions with Cancelled or Denied Registration
Charitable trusts, institutions, funds and research bodies whose registration or approval was cancelled or denied on or before 31 March 2025 under Sections 12A, 12AB, 35(1)(ii), 35(1)(iia), 35(1)(iii) or 10(23C), but which continue to claim exemption in their FY 2025-26 return, are compulsorily selected. The Department treats a continued exemption claim after registration loss as a clear scrutiny trigger.
CS-05: Recurring Additions on the Same Issue
Where an addition on a recurring question of law or fact was made in an earlier assessment year, has become final (not contested further) or has been upheld in appeal, the case is compulsorily selected if the addition crosses a monetary threshold:
- Rs 50 lakh in the eight metro charges (Ahmedabad, Bengaluru, Chennai, Delhi, Hyderabad, Kolkata, Mumbai and Pune).
- Rs 20 lakh in all other (non-metro) charges.
CS-06: Information from Enforcement or Regulatory Agencies
Returns where specific information pointing to tax evasion for the relevant year has been provided by any law-enforcement or regulatory authority (for example the ED, CBI, GST authorities, SEBI or the FIU) are compulsorily selected.
The Two Deadlines Every CA Must Diarise
| Deadline | What must happen | Which categories |
|---|---|---|
| 15 June 2026 | Consolidated lists of cases must be forwarded to the Directorate of Income-tax (Systems) | CS-05 (recurring additions) and CS-06 (enforcement information) |
| 30 June 2026 | Notice under Section 143(2) must be served on the taxpayer | All six categories |
The 30 June 2026 service date is not administrative housekeeping. Under the proviso to Section 143(2), a scrutiny notice for a return filed during FY 2025-26 cannot be served after this date. If the notice does not reach you by 30 June 2026, the return cannot be taken up for complete scrutiny under these guidelines. Equally, if you do receive a valid Section 143(2) notice on or before that date, the case is firmly in the scrutiny stream.
What Happens After Selection? The NaFAC Routing Rule
Once selected, most compulsory-scrutiny cases are transferred to the National Faceless Assessment Centre (NaFAC) for faceless assessment. The guidelines, however, retain the long-standing carve-out: cases falling under International Taxation and Central Charges are not transferred to NaFAC and continue to be assessed by the jurisdictional officer. This matters for multinational groups, transfer-pricing taxpayers and search-linked cases, where the assessment stays with the specialised charge rather than going faceless.
Who Is Most Exposed This Year?
For founders and startups
If your company was surveyed after 1 April 2024, if any group entity faced a search, or if a previous-year addition (for example on share premium valuation, related-party transactions or unexplained credits) was upheld and crosses the Rs 50 lakh / Rs 20 lakh threshold, expect a Section 143(2) notice by 30 June 2026. Fundraising due diligence routinely surfaces open scrutiny assessments, so resolving these cleanly protects your next round.
For MSME business owners
The recurring-additions trigger (CS-05) catches many genuine businesses. If the same disallowance, say an estimated gross-profit addition or a Section 40(a)(ia) TDS disallowance, was confirmed in an earlier year and repeats, the current year is selected automatically. Keep the documentary basis for the repeated item ready, and review our FY 2025-26 tax audit sprint for the common Form 3CD hot spots that recur as additions.
For CA professionals
Map your client base against the six categories now. Flag every client surveyed or searched after 1 April 2024, every trust still claiming exemption after losing registration, and every client carrying a confirmed recurring addition above the threshold. Build the scrutiny defence file before the notice, not after.
Compulsory Scrutiny Readiness Checklist
- Identify your category. Run each FY 2025-26 return against CS-01 to CS-06. Most taxpayers fall in none; those who do should treat a notice as near-certain.
- Confirm the survey or search date. The 1 April 2024 cut-off for CS-01 and CS-02 is decisive. A survey before that date does not trigger compulsory selection under these guidelines.
- Reconcile return with books and AIS. Match the filed return against the Annual Information Statement (AIS), Form 26AS and audited financials. Resolve mismatches in writing before 30 June. If you are still finalising the FY 2025-26 return, see our ITR forms guide for AY 2026-27.
- Assemble the recurring-addition file (CS-05). Pull the earlier assessment order, the appellate order, and the supporting evidence for the repeated item.
- For trusts (CS-04): verify the registration status under Sections 12A/12AB/10(23C) and document the basis for any continued exemption claim.
- Track the notice. Monitor the e-filing portal and registered email daily through June. A Section 143(2) notice served by 30 June 2026 is valid; verify the DIN and service date the moment it arrives.
- Respond on the faceless portal. Unless your case is in International Taxation or a Central Charge, the assessment will be faceless. File responses through the portal within the time allowed and keep proof of submission.
Frequently Asked Questions
Will my ITR be selected for scrutiny in FY 2026-27?
Only if it falls in one of the six compulsory categories (survey, search, reassessment, cancelled-registration trust, recurring addition above threshold, or enforcement information) or is separately picked by the CASS system. The vast majority of returns are not compulsorily selected.
What is the last date to receive a scrutiny notice for FY 2025-26?
The Section 143(2) notice must be served on or before 30 June 2026. If no valid notice reaches you by that date, your FY 2025-26 return cannot be taken up for complete scrutiny under these guidelines.
Are these guidelines under the old Act or the new Income-tax Act, 2025?
Both, in a layered way. The authority to issue them is Section 536(2)(c) of the Income-tax Act, 2025 (the transitional saving clause). The substantive section references (Section 133A, 132, 148, 143(2), 12A, 12AB, 10(23C)) are from the Income-tax Act, 1961, because the returns relate to Assessment Year 2026-27, which the 1961 Act continues to govern.
Does a TDS-verification survey under Section 133A(2A) trigger compulsory scrutiny?
No. Section 133A(2A) surveys are specifically excluded from the CS-01 trigger.
What are the monetary thresholds for recurring additions?
Rs 50 lakh in the eight metro charges and Rs 20 lakh in non-metro charges, where the addition on the recurring issue has attained finality or been upheld in appeal.
The Bottom Line
The FY 2026-27 compulsory scrutiny guidelines do not expand the categories, but the calendar is tight and the transition to the Income-tax Act, 2025 makes the citation framework new. If your FY 2025-26 return sits in any of the six buckets, the Section 143(2) notice is coming by 30 June 2026. Use the days before that to reconcile, document and prepare, so that a faceless assessment becomes a paperwork exercise rather than a fire drill.
Facing a possible scrutiny notice for FY 2025-26? The team at Tax Update India helps founders, MSMEs and professionals prepare scrutiny-ready documentation and respond to faceless assessment notices. Schedule a Strategy Session to review your exposure before 30 June 2026.
Disclaimer: This article is for general information only and does not constitute legal or tax advice. The guidelines summarised here are based on CBDT F.No. 225/56/2026/ITA-II dated 4 June 2026 and the Income-tax Act, 2025 as in force on the date of publication. Please consult a qualified professional for advice specific to your situation. Information is current as of 9 June 2026.
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