Centralised Processing Cell-Compliance Management (CPC-CM)

To identify tax evaders, the Income Tax Department has set up a major data centre Centralised
Processing Cell- Compliance Management (CPC-CM) which is in line with existing two such centres
Central Processing Centre (CPC), Bangalore and TDS Centralised Processing Cell (CPC-TDS) which will
have dedicated workforce, drawn from the department.
The CPC-CM is an ambitious project of the Central Board of Direct Taxes (CBDT) aimed at enabling the I-
T department to use technical data to check cases of non-compliance and non- filers of taxes.
The CPC-CM will have the entire database of the Permanent Account Number (PAN), reports generated
by financial snoop agencies and the full assortment of letters and notices issued to non-compliant
taxpayers, their replies and the final action in the new centre.
Tax officials have issued polite letters to erring taxpayers as and when they obtain information in this
regard and hence to streamline this process the CPC will act as an important tool
The department had initiated the business intelligence project in February 2013 to identify PAN holders
who have not filed their returns and about whom specific information was available in its databases like
the Annual Information Return (AIR), Central Information Branch (CIB) data or TDS/TCS returns.
Below are some of the informations collected by compliance management cell through AIR, CIB and TDS
return for which notice is being served to non-filer.
1. Annual Information Return(AIR)
AIR-001: Cash deposits aggregating to Rs. 10,00,000/- or more in a year in any savings account
AIR-002: Paid Rs. 2,00,000/- or more against credit card bills
AIR-003: Investment of Rs. 2,00,000 or more in Mutual Fund
AIR-004: Investment of Rs. 5,00,000/- or more in Bonds or Debenture
AIR-005: Investment of Rs. 1,00,000/- or more for acquiring shares
AIR-006: Purchase of Immovable Property valued at Rs. 30,00,000/- or more
AIR-007: Investment in RBI Bond of Rs. 5,00,000/- or more
2. Central Information Branch (CIB)
CIB- 94: Sale of Motor Vehicle
CIB-151: Transfer of immovable property
CIB-154: Transfer of capital assets where value declared for the purpose of stamp duty is more
than sale value
CIB-157: Purchase of Immovable property valued at Rs. 5 lakhs or more
CIB-183: Time deposit of Rs 1,00,000/-
CIB-185: Purchase of Bank Draft of more than Rs. 50,000/- in cash
CIB 321: Share Transactions more than Rs. 20,000/-
CIB-403: Investment in Fixed Deposit/Time Deposit exceeding Rs. 2,00,000/-
CIB-406: Payment made against Credit Card more than Rs 2,00,000/-
CIB-410: Cash deposit aggregating of Rs 200000 on a day
CIB-502: Contract of Rs. 10,00,000/-or more in the Commodities Exchange
CIB-514: Interest paid by co operative credit Society
CIB: Payment in connection with foreign travel amount exceeding Rs. 1,00,000/- at one time
CIB: Payment to Hotel and Restaurants exceeding Rs. 1,00,000/- at one time
3. TDS return
TDS-94A : TDS Return Interest other than interest on security (section 194A)
TDS-92B : TDS Return Salary to Employees (section 192)
TDS-195 : TDS Return Payment to Non-residents (Section 195)
TDS-196A : TDS Return Income in repspect of Units of Non-residents (Sectio 196A)
Note : Details o transactions in TDS/TCS can be views in income tax website under menu view Credit
Statement (Form 26AS) in My Account
4. Stock Broker
STT-01: Purchase of equity share in a recognised stock exchange
STT-02: Sale of equity Share (settled by actual delivery or transfer) in a recognised stock
exchange
STT-03: Sale of equity Share (settled by otherwise than by the actual delivery or transfer) in a
recognised stock exchange
STT-04: Sale of option in securities (derivative) in a recognised stock exchange
STT-05: Sale of Futures (derivative) in a recognised stock exchange
5. Others:
EXC-001: Cash transactions exceeding Rs. 10,00,000/- in a month
EXC-002: Turnover from services reported in Service Tax Return
Non-filers Monitoring System (NMS):
The Non-filers Monitoring System (NMS) under Compliance Management Cell, New Delhi, was
implemented as a pilot project to prioritize action on non-filers with potential tax liabilities. Data
analysis was being carried out to identify non-filers about whom specific information was available in
AIR, CIB data and TDS/TCS Returns
How are non-fliers Monitoring System Works?
The Non-filers Monitoring System (NMS) was implemented to identify non-filers with potential tax
liabilities.
Salient features of this initiative are:
Data analysis was conducted to identify PAN holders who had not filed Income tax returns
despite conducting high-value transaction as reported in AIR, CIB data and TDS/TCS Returns.
Bulk Data matching exercise was carried out with the Financial Intelligence Unit (FIU) to include
non-filers who had conducted high-value cash transactions.
Rule based algorithms were applied to classify the cases as P1, P2, P3, P4 and P5 priority ratings
(P1 being the highest priority) for graded monitoring.
Compliance Management Cell (CMC) sends letters to PAN holders communicating the
information summary and seeking to know the submission details of Income tax return.
Compliance module on the e-filing portal and information related to non-filers is made available
to the specific PAN holder and capturing responses from the non-filers. SMS and email are also
being sent to the target segment asking them to access e-filing portal. The PAN holder is able to
provide details electronically and keep a printout of the submitted response for record
purposes.
Online monitoring system will ensure further follow-up action and track return filing and tax
payment of the target segment.
An online monitoring system will also ensure that information related to non-filers is effectively
used by the field formation.

How to deal with notice received for Non-Filing of Income Tax Return:
If you get a notice for non-filing of income tax return from compliance management cell, first you need
to understand why you have received notice. After logging into your account on the e-filing portal
at http://incometaxindiaefiling.gov.in, visit compliance menu where you will be able to view the details
of the assessment years for which the return has not been filed and for which the third party
information has been received by the ITD.
The taxpayer can choose one of the following response options:
i. ITR has been filed
ii. ITR has not been filed
If the taxpayer chooses the option that ITR has been filed then it need to provide the mode of filing the
ITR (paper or e-file), date of filing the ITR and the acknowledgement number. In case the ITR is e-filed,
the status will be automatically updated.
If the taxpayer chooses the option that it has not filed the ITR then it needs to choose one of the
following options:
i. Return under preparation
ii. Business has been closed
iii. No taxable income
iv. Others
In case if the taxpayer chooses the option others then he has to mandatorily submit the remarks
If you are not registered with the e-filing portal, use the registered yourself link to register your PAN.
The response has to be submitted electronically by clicking Compliance link after logging into the e-filing
portal.
In case you have already filed your return:
If income tax return already filed update the details such as Mode of Filing (E-Filing or Paper Filing), Date
of filing return, Acknowledgment Number and Circle or Ward and City.

Submit your response in compliance module if Income Tax Return has already filed
In case you have not filed return for particular assessment year:
Please update the details such as Return under preparation or Business has been closed or No taxable
Income or Others. If you select the options others, please proved remarks.
Submit your response to compliance module if return has not been filed
Further under the tab Related Information Summary you are required to chose of the following
correct options
i. Self-Investment/ expenditure is out of exempt income: This option is to be selected if the third party
information relate to investment/expenditure which belongs to the taxpayer and the same is out of
income exempt from tax under Income-tax Act, 1961.
ii. Self-Investment/ expenditure is out of accumulated savings: This option is to be selected if the third
party information relate to investment/expenditure which belongs to the taxpayer and the same is out
of accumulated savings.
iii. Self-Investment/ expenditure is out of gifts/ loans from others: This option is to be selected if the
third party information relate to investment/expenditure which belongs to the taxpayer and the same is
out of gifts/loans from others.
iv. Self-Investment/ expenditure is out of foreign income: This option is to be selected if the third party
information relate to investment/expenditure which belongs to the taxpayer and the same is out of
foreign income.
v. Self-Income from transaction is exempt: This option is to be selected if the third party information
relate to income/receipts which belongs to the taxpayer and the same is exempt under Income-tax Act,
1961.
vi. Self-Income from transaction is below taxable limit: This option is to be selected if the third party
information relate to income/receipts which belongs to the taxpayer and the taxable income there from
is below taxable limit under Income-tax Act, 1961.
vii. Self-Income from transaction relate to different AY: This option is to be selected if the third party
information relate to income/receipts which belongs to the taxpayer and the same is taxable in a
different year as per the provisions of the Income-tax Act, 1961.
viii. Self-Not Known: This option is to be selected if the third party information relate to
income/receipts which belongs to the taxpayer and there is any other explanation.
ix. Other PAN: This option is to be selected if the third party information relate to another taxpayer. In
this case, the PAN of such other taxpayer is to be mandatorily provided.
x. Not Known: This option is to be selected if the taxpayer has no information about the third party
information.
xi. I need more information: This option is to be selected if the taxpayer knows about the third party
information but needs more information to submit response
Make sure that you reply correctly, or there are chances of department asking for further information.

Submit compliance form appearing in related information summery

It is advisable to take help of tax professionals or chartered accountant before submitting information
as incorrect submission will lead your case selected for scrutiny for further investigation.
It is also advisable to compute tax liability if due, pay tax and file income tax return before submitting
your response. If you chose option no taxable income without explaining proper source of income for
high-value transaction, department may select your case for scrutiny and send you notice u/s 148 of
income Tax act for further investigation.
Read: Can i file income tax return for more than 2 year if compliance notice recieved for non filing
I dont have taxable in income in India, but I got a notice for non-Filing of Income Tax Return from
compliance Management cell.
If a person makes huge or high-value transactions there are chances of getting a notice for non-Filing of
Income Tax Return from compliance Management cell. It doesnt necessarily mean that income tax
department is looking at you as a tax evader. You may be rich agriculturist deposited cash more than
10.00 Lakh into your savings bank account or you may be NRI having invested huge money in Land and
end up in getting a notice for non-filing of return.
Dont worry, if there is no taxable income than either you are liable to pay tax nor file income tax return.
You are only requested to furnish your response in the compliance module on the filing portal
at http://incometaxindiaefiling.gov.in. If you are not registered with the e-filing portal, use the
registered yourself link to register. The response has to be submitted electronically by clicking
Compliance link after logging into e-filing portal.
What happens if no response is electronically submitted within in the time limit?
If you dont submit a response within the prescribe limit CPC-CM may send information available with
them to concerned assessing officer. With the available information, the assessing officer if he has
reason to believe that any income chargeable to tax has escaped assessment, then he may take up your
case for scrutiny and assess tax liability subject to other provisions of the income tax. In such case, you
may end up in paying tax liability along with interest and penalty.