CBDT notifies norms for faceless IT assessment

In a big relief to taxpayers, the government has set the ball rolling on faceless and paperless income tax proceedings with the notification of the income tax e-assessment scheme.

The move is expected to cut down on harassment of taxpayers and improve the image of the Income-Tax Department by ensuring that all tax proceedings including scrutiny  are done on a centralised basis without any direct interaction with the assessee.

The plan was announced in the Union Budget 2019-20 and Finance Minister Nirmala Sitharaman had recently said the scheme will be launched from October 8.

As part of the scheme, the Central Board of Direct Taxes will set up national and regional e-Assessment centres as well as assessment units to conduct electronic assessments and proceedings including refunds.

This would mean that an assessee in one city could well be assessed by officers in another city.

Under the scheme, the national centre will send notices to assessees explaining the issues for selection of their case for assessment and the assessee will have 15 days to respond. The Centre will then allocate the case to an assessing officer using an automated system, it said.

All communication will be conducted electronically and an assessee or his representative will not have to be physically present. A personal hearing would be allowed in case a modification is proposed in the draft assessment order, and an opportunity is provided to the assessee. Assessees  would be allowed to make their submissions or present their case “in any unit” and the hearings will be conducted exclusively through video links or any other such facility.

The National e-assessment Centre after completing the assessment will transfer all electronic records to the Assessing Officer for imposing penalty or collection and recovery of demand.

The CBDT had been working on electronic assessments for more than a year now and was rolling out some processes in stages.

Welcome move

Welcoming the move, Frank D’Souza, Partner and Leader Corporate and International Tax , PwC India, said, “Naturally, in an initiative of this kind the process will evolve and get refined over a period of time.

For example the process does not appear to envisage cases where the taxpayer has the right to apply to the dispute resolution panel.”

SR Patnaik, Partner and Head – Taxation, Cyril Amarchand Mangaldas, noted that if this secrecy can be retained, it will be fantastic news for the taxpayers.

“However, considering where we are today, I feel there is a requirement to still have a face-to-face meeting between the taxpayer and the tax authorities, especially where the authorities require certain clarifications on the basis of information and disclosures made and the taxpayer is willing to provide the same,” he said.

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