Faceless Assessment: IT Department closes over 7,000 cases using digital technology

The Income Tax Department has closed over 7,000 cases with the help of faceless assessment. Now, it says that a new version of Form 26AS will help the department complete seamless implementation of the first phase of faceless assessment.

Following the call of Prime Minister Narendra Modi that tax assessments should be anonymous, thereby eliminating discretion and physical interface, the Finance Ministry launched faceless assessment last October. Under such a mechanism, cases are assigned randomly using algorithms and kept away from the geographical jurisdiction of the case. Here, all communications with taxpayers is made electronically by a central cell in Delhi and identity of all the Assessing Officers remains unknown to the taxpayers at all times.

According to sources, a total of 58,319 cases picked up in the first phase of the faceless assessment, out of which, 7,116 cases have been disposed off with assessment orders issued without any additions.

A total of 291 cases wherein additions are proposed to be made, have been submitted to Risk Management unit. “The Faceless Assessment system of Income Tax Department has been a game changer in the arena of direct taxation. It has empowered the taxpayers and has, as a foremost mechanism, altered the facets and perception of overall tax administration in India,” said a senior Finance Ministry official.

Since its launch and implementation of first phase, the Faceless Assessment has empowered the tax payer to electronically file assessment of income tax from the comforts of her/his home without hassle or visiting any tax officer, or run pillar-to-post on receiving income tax scrutiny assessment notice or rush to a tax professional or accountant.

‘Digital Technology for Risk Management’

The I-T Department has created state-of-the-art ‘Digital Technology for Risk Management’ by way of automated examination tool, Artificial Intelligence and Machine Learning, with reduced discretion or no human interface. Such an assessment is being carried by the Delhi-headquartered National Assessment Center (NeAC), and 8 Regional Assessment Centers (ReAC) in Delhi, Mumbai, Chennai, Kolkata, Ahmedabad, Pune, Bengaluru and Hyderabad. All these centres comprise of Assessment units, Review units, Technical units and Verification units.

According to officials, out of over 6 crore returns filed annually, almost 99 per cent are e-filed. Among all the returns, only about 3 lakh returns come under scrutiny on the basis of select risk parameters. Cases are centrally selected for scrutiny using Computer Aided Selection for Scrutiny. Some scrutiny cases are also selected manually on the basis of specified criteria. Old assessments can also be re-opened if the Assessing Officer has sufficient reasons to believe that some income has escaped assessment.

Officials expect the modified version of Form 26AS, notified from June 1 and to be made applicable from Assessment Year 2020-21, to further boost faceless assessment. The modified version includes information on Specified Financial Transactions (Property, bank, shares, mutual funds, etc), payment of taxes, Tax Deducted or Collected at Source, Income tax demand and refund, and pending and completed income tax proceedings. “This would be faceless hand-holding of the taxpayers to ease them e-file their income tax returns quickly and correctly besides nudging some taxpayers to disclose income relating to transactions displayed in the modified Form 26AS and to pay taxes rightly,” said officials.

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