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Some social media posts these days mention that starting AY 2023-24 , the income tax department will conduct the strictest scrutiny of tax returns. To facilitate this process, they have implemented a specially designed, automated and enhanced artificial intelligence software program (AI) for scrutinizing income tax returns (ITR). This software it is said is going to gather information/data linked with PAN and aadhar link and tally the same with the ITR and TDS data in Form 26AS and identify any undeclared accounts or transactions and thereafter demand will be calculated automatically u/s 143 (1) based on such exercise.

These posts read as under :

ITR Processing AY 2023-24;

  1. Income Tax Returns Processing this year AY 2023-24. The IT Department is going to scrutinise the returns very strictly. For this, they are adapting the specially designed, self automated and modified artificial intelligence software program (AI) for scrutinizing the field of ITR. This program will first collect the data linked with your PAN card, then it will automatically follow the linked data with your Aadhar card.


  1. After this the AI will tally the transactions linked with your aadhar and PAN to the bank accounts attached. Now it will collect all details of fixed deposits, quarterly interests credited, share dividends, share transactions, mutual fund and shares long term and short term gains of all bank accounts you declared & attached yourself with your income tax ITR returns filed by you. Now it will start tallying the undeclared bank accounts on your name and also with the joint bank accounts where you are second and third holder.


  1. It will also search the postal accounts and bank accounts with all cooperative banks, local credit institutions, postal fixed deposits, interests, postal RDs, MIS, senior citizen saving schemes etc either single or jointly with a second name where your investments are made with the family members who are non registered ITR filers.


  1. The PAN card will now be checked with the government registry office for any Land and immovable properties transactions in the current and previous three years.


  1. After all this complicated workout the debit cards, credit cards transactions, passport, visa attached tour details, two & four wheeler purchase or sale etc.


  1. The complete data collected will be tallied with data you declared & filed in your Income Tax Return. Also will be tallied with TDS  in AS26 data.


  1. The declared and undeclared factual income tax will be calculated automatically and demand will be sent to you under 143(i).


  1. The full proof automated AI-ITR program is successfully finalized & tested. And will be implemented for the first time from this year now.


  1. So income tax processing is delayed somewhat. All the ITRs are expected to be processed  late in the last week of July or max in the first week of August.


  1. Because this specially designed AI-ITR program has enough capacity to do all this work out in a fraction of seconds. So don’t worry and be happy. Those who still haven’t filed the ITR  must be  cautious while filing ITR. ( unquote)

Rather it’s the other way round actually. Section 285BB of the Income tax Act provides that the department is under an obligation to upload in the registered account of the assessee annual information statement along with such information which is in the possession of an income tax authority. 26AS along with AIS and TIS are three relevant documents that provide to the assessee his details of income and financial transactions in a defined year to help him use them to prepare his return as accurately as possible. Even section 143(1) choose to make an adjustment only for income appearing in Form 26AS or TDS documents being Form 16A or Form 16 which has not been included in computing the total income in the return and not for any data or information otherwise gathered by using any intelligence software program (AI).

If this were the intention of the Act then there is no authority under the Act to raise demands in the manner suggested by the social media posts unless and until the said information or data relevant to the assessee is made known by way of annual information statements in the registered account of the assessee at the income tax portal to enable him to make compliance and furnish true and correct picture of his income in form of return of income.

So one should not be guided by such posts blindly and instead prepare his return truthfully on the basis of his bank statements and possession of other documents and certificates of investments and financial transactions etc and also match with information made available to him in his registered account in Form 26AS , AIS and TIS and Forms 16/16A.

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