Last reviewed: 25 August 2026. Every year, before the statutory window to issue a scrutiny notice closes, the Central Board of Direct Taxes circulates an internal instruction to the field formations setting out exactly which returns must go for compulsory complete scrutiny — as opposed to the much larger pool picked up by the computer-assisted (CASS) risk-scoring system. For FY 2026-27, that instruction (F.No.225/56/2026/ITA-II, dated 4 June 2026) fixed six trigger categories. If you, a group entity, or a trust/NGO you administer received a Section 143(2) notice this cycle, this is the map of why — and what happens next.
The six compulsory selection categories
Unlike CASS, which is opaque and risk-model-driven, these six categories are objective — a case either fits the description or it doesn't.
| Code | Trigger | Who it typically catches |
|---|---|---|
| CS 01 | Survey under Section 133A (other than 133A(2A)) conducted on/after 1 April 2024 | Businesses that had a department survey at their premises |
| CS 02 | Search under Section 132 or requisition under 132A on/after 1 April 2024 | Search/seizure cases; block-period years under Section 158BA(6) for actions after 1 Sept 2024 |
| CS 03 | Reassessment under Section 148 — (i) linked to a post-1 Apr 2021 search/survey, or (ii) any other reassessment with a notice due by 31 March 2027 | Cases reopened on fresh information |
| CS 04 | ITR-7 filers claiming exemption where 12A/12AB/35(1)(ii)/(iia)/(iii)/10(23C) registration was refused or cancelled on/before 31 March 2025 (appeal-reversed cases excluded) | Trusts, NGOs, Section 8 companies, research institutions |
| CS 05 | A recurring addition on the same point of law/fact (incl. transfer pricing) that is final or upheld in the department's favour on appeal, above ₹50L (metro) / ₹20L (non-metro) | Businesses with an unresolved, repeated litigation point |
| CS 06 | Specific tax-evasion information from a law-enforcement/investigation/regulatory agency for the relevant AY | Cases flagged by external agencies (excludes routine AIS/SFT/NMS-cycle 142(1) notices unless independently qualifying) |
CS 05 in practice: the threshold most businesses actually hit
CS 01, 02 and 06 need an external trigger — a survey, search or agency tip-off. CS 05 is the one an ordinary compliant business can walk into simply because an earlier year's addition on a recurring issue (a disallowance, a valuation dispute, a TP adjustment) was confirmed at the appellate stage and repeats above threshold this year.
| Scenario | City / charge | Addition this year on the recurring issue | CS 05 applies? |
|---|---|---|---|
| Worked example 1 | Thane / Mumbai (metro charge) | ₹62 lakh disallowance u/s 40(a)(ia), same point upheld by CIT(A) last year | Yes — exceeds the ₹50L metro threshold |
| Worked example 2 | Nashik (non-metro charge) | ₹28 lakh valuation addition, same basis upheld by ITAT in a prior year | Yes — exceeds the ₹20L non-metro threshold |
| Worked example 3 | Thane / Mumbai (metro charge) | ₹35 lakh recurring addition, prior-year appeal still pending (not yet final/upheld) | No — the "final or upheld" condition isn't met yet |
The practical takeaway: once an addition on a point is confirmed in appeal even once, that same point becomes a standing scrutiny risk for every future year it recurs above threshold — which is a strong argument for either conceding a weak point early or litigating it to a clean close, rather than letting it repeat unresolved year after year.
CS 04: the trust and NGO angle
Trusts, Section 8 companies and institutions filing ITR-7 should read CS 04 carefully. It is not about scrutiny of the trust's activities in the abstract — it is squarely about registration status. If your 12A/12AB registration, or an approval under 35(1) or 10(23C), was refused or withdrawn by the competent authority on or before 31 March 2025, and you still claimed the related exemption in the return, that return goes for compulsory complete scrutiny this cycle. The one carve-out: if the withdrawal itself was reversed in appeal before the cut-off, the case drops out of CS 04. This is a reminder to keep 12A/12AB and 80G renewal and re-registration dates current — a lapsed registration doesn't just cost the exemption, it now invites scrutiny on top.
What happens after selection
- Notice: Section 143(2) notice, served through the prescribed authority, the jurisdictional AO, or NaFAC depending on category.
- Forum: CS 03(ii), CS 04, CS 05 and CS 06 cases go to the National Faceless Assessment Centre; CS 01/CS 02/CS 03(i) and existing Central/International Taxation charges stay outside the faceless route, with the jurisdictional or central officer proceeding after administrative approval.
- Transfer to Central Charges: where applicable, within 15 days of the notice being served (not applicable to International Taxation or cases already with Central Charges).
- Scope: complete scrutiny examines the entire return — income heads, deductions, exemptions, balance sheet items — not only the item that triggered selection.
- Documentation: respond only through the e-filing portal / e-proceedings tab; keep every submission dated, indexed and backed by source documents (ledgers, bank statements, contracts, valuation reports as relevant to the category).
Common mistakes we see
| Mistake | Why it hurts |
|---|---|
| Treating a CS 05 notice as "just the old issue again" and reusing last year's submission verbatim | Complete scrutiny opens the full return; an unaddressed unrelated item can turn into a fresh addition |
| Ignoring an e-mail notice without checking the e-filing portal | Phishing notices circulate every cycle; the portal copy is the only authoritative one, and response timelines run from portal service |
| Waiting until close to the response date to engage a professional | Faceless proceedings run on fixed portal timelines with limited adjournment; late engagement compresses drafting time |
| Assuming a trust's exemption claim is safe because it was allowed in earlier years | CS 04 is triggered by the registration's current status on the cut-off date, not by past assessment history |
Action checklist if you have (or expect) a compulsory-scrutiny notice
- Verify the notice on the e-filing portal under e-Proceedings — confirm the section (143(2)), the issuing authority (NaFAC / jurisdictional / central) and the response deadline.
- Map the notice to the likely trigger category (survey/search date, reassessment, registration status, recurring addition, or agency reference) — this shapes the response strategy.
- Pull the relevant financial records: for CS 05, the prior year's appellate order on the same point; for CS 04, the 12A/12AB/80G registration and any renewal application on file; for CS 01/02, the survey/search panchnama and statements recorded.
- Reconcile the return being scrutinised against books, GST returns and TDS/AIS data before replying — complete scrutiny cross-checks all of these.
- File responses only through the authorised portal channel, keep an indexed set of everything submitted, and track the response deadline against the officer's unit (faceless timelines are strict).
- Where a recurring issue (CS 05) is genuinely weak on facts, evaluate a considered settlement/concession this year rather than letting it repeat as a scrutiny trigger every year it recurs.
Frequently asked questions
What is compulsory complete scrutiny under the Income-tax Act?
It is selection of a filed return for detailed (“complete”) scrutiny assessment under Section 143(2), outside the normal random/CASS selection, because the case falls into one of the categories CBDT notifies each year through an internal instruction to the field formations.
Is the FY 2026-27 scrutiny notice deadline still open?
No. Under CBDT Instruction F.No.225/56/2026/ITA-II dated 4 June 2026, the statutory notice under Section 143(2) for cases selected this cycle had to be served by 30 June 2026. If you did not receive a notice by that date for the relevant assessment year, your return is not under compulsory complete scrutiny for this cycle — though it can still be picked up under CASS (computer-assisted, risk-based) selection, which follows a separate, undisclosed algorithm.
My return was picked up for a recurring addition — does that mean I did something wrong?
Not necessarily. Category CS 05 (recurring addition) is triggered mechanically once an addition on the same point of law or fact has become final, or has been upheld by an appellate authority in the department's favour, in an earlier year, and it crosses the ₹50 lakh (metro) / ₹20 lakh (non-metro) threshold in the current year. It reflects an unresolved or repeatedly-litigated issue on the file, not fresh wrongdoing.
Will my assessment be faceless?
Cases under CS 03(ii) (routine reassessment), CS 04 (registration/approval withdrawal), CS 05 (recurring addition) and CS 06 (agency information) are forwarded to the National Faceless Assessment Centre (NaFAC) and proceed under the faceless assessment scheme. Search/survey-linked cases (CS 01, CS 02, CS 03(i)) and cases already with International Taxation charges are handled by the jurisdictional or central assessing officer instead, with administrative approval.
What is the difference between CS 05 metro and non-metro thresholds?
The higher ₹50 lakh threshold applies where the assessee's case falls under the eight metro charges — Ahmedabad, Bengaluru, Chennai, Delhi, Hyderabad, Kolkata, Mumbai and Pune. Everywhere else, the lower ₹20 lakh threshold applies. Thane/Mumbai-based taxpayers therefore sit in the metro bracket.
What should I do within the first week of receiving a Section 143(2) notice?
Confirm the notice is genuine on the e-filing portal (do not rely on an emailed PDF alone), note the response window and the officer/unit it is issued from (NaFAC vs jurisdictional), pull together the documents relevant to the specific trigger category if it is stated, and avoid replying without professional review — complete scrutiny examines the whole return, not one issue, so an unguarded first response can widen the scope.
Can a case selected under these guidelines still be limited scrutiny?
No. All six CBDT categories in this instruction result in complete scrutiny — the entire return is open for examination, unlike limited scrutiny (CASS-driven) which is confined to specific flagged parameters unless converted with approval.
We handle income-tax notice responses and e-proceedings representation for businesses, trusts and NGOs across Thane and Mumbai, including recurring-issue (CS 05) risk review before filing.
Notice & Scrutiny Support Income Tax Compliance Talk to usThis article summarises CBDT Instruction F.No.225/56/2026/ITA-II (4 June 2026) and general assessment procedure under the Income-tax Act, 1961, for FY 2026-27. It is educational in nature and not a substitute for a review of your specific notice and records. Selection categories, thresholds and timelines are revised by CBDT each financial year — always confirm the current-cycle instruction before relying on this for a fresh notice.