Selected for "Complete Scrutiny" This Year? —The CBDT's Six Categories, and a Deadline That Already Passed

Every year, a small fraction of income-tax returns are pulled aside for what the department calls "complete scrutiny" — a full re-examination of the return, not the light-touch, system-generated queries most taxpayers are used to. For a long time, taxpayers had little visibility into why a particular return was picked. The CBDT's annual scrutiny-selection guidelines change that: they set out, in writing, exactly which categories of returns must be selected. The latest version, issued on 4 June 2026, governs the returns filed during FY 2025-26 — broadly, returns for Assessment Year 2025-26 — and the department's own deadline to act on it has already passed.

What the CBDT actually issued

By guidelines dated 4 June 2026 (F. No. 225/56/2026/ITA-II), the Central Board of Direct Taxes prescribed six categories — CS 01 to CS 06 — of returns that must be compulsorily selected for complete scrutiny during Financial Year 2026-27. This is the same annual exercise the CBDT has run for several years now; only the categories and thresholds are refreshed each cycle. Because it deals with returns filed in FY 2025-26 (that is, AY 2025-26 returns, mostly filed by July 2025), this year's guidelines still operate within the assessment machinery of the Income-tax Act, 1961 — the CBDT's authority to issue them for this transitional period is drawn from Section 536(2)(c) of the new Income-tax Act, 2025, read together with the proviso to Section 143(2) of the 1961 Act. The new Act's substantive scheme applies to Tax Year 2026-27 and after; it does not reopen or reclassify AY 2025-26 assessments.

The six categories, in plain language

• CS 01 — Survey cases: a Section 133A survey was conducted at your business or premises on or after 1 April 2024.
• CS 02 — Search or requisition cases: a search under Section 132, or a requisition of assets under Section 132A, was initiated on or after 1 April 2024.
• CS 03 — Reassessment cases: a notice under Section 148 has already been issued for the year, whether arising from a search/survey action or from other information.
• CS 04 — Registration or approval withdrawn, exemption still claimed: your trust or institution's registration/approval under Sections 12A, 12AB, 35(1)(ii)/(iia)/(iii), or 10(23C)(iv)/(v)/(vi)/(via) has been cancelled, withdrawn, or not granted, but the return still claims the related tax exemption.
• CS 05 — Recurring additions above the monetary limit: an addition made in an earlier year on a recurring legal or factual issue has become final, or has been upheld by an appellate authority, and exceeds ₹50 lakh in the eight metro charges or ₹20 lakh elsewhere.
• CS 06 — Specific tax-evasion information: a law-enforcement or investigating agency has furnished specific information pointing to tax evasion for that year, and a return has been filed for it.

One clarification in the guidelines is worth noting in its own right: returns flagged merely through routine data-mismatch systems — the Non-filer Monitoring System, AIS, SFT reporting, or CPC-TDS reconciliation — do not automatically qualify for compulsory scrutiny. They are pulled in only if they independently meet CS 06. A generic AIS mismatch letter, in other words, is not the same thing as a compulsory-scrutiny notice.

Selection under one of these six categories starts an examination — it is not itself a finding against the taxpayer. What it does mean is that the file deserves a considered response, not a shrug.

What a scrutiny notice does — and does not — mean

Being picked up under CS 01 to CS 06 is a trigger for a closer look at the return, nothing more. The guidelines themselves record that selection only sets the assessment in motion; the Assessing Officer must still follow the ordinary safeguards — issue notices under Sections 142(1) and 143(2), give the taxpayer a genuine opportunity to explain the entries under scrutiny, apply the principles of natural justice, and pass a reasoned assessment order addressing the taxpayer's submissions. A CS 02 search-case selection, for instance, does not by itself mean the search findings will translate into an addition; it means the return connected to that search will be examined in full rather than accepted as filed.

For taxpayers connected to a search, survey, or reassessment action in particular — the CS 01 to CS 03 categories — this is usually the point at which the matter moves from an investigation to a formal assessment proceeding, and where the quality of the taxpayer's documented response starts to matter far more than it did at the survey or search stage itself.

If you have already received a notice

A note for FY 2026-27 filings going forward

Keep the two timelines separate. This guideline concerns returns already filed for AY 2025-26. Returns you will file for AY 2026-27 (income of FY 2025-26) remain governed by the Income-tax Act, 1961 as well — the new Income-tax Act, 2025 takes over the substantive scheme only from Tax Year 2026-27 onward. The CBDT typically issues a fresh compulsory-scrutiny guideline each year in this format, so expect an equivalent — and possibly renumbered — set of categories for AY 2026-27 returns in due course.