By Rajat Mohan
Over the previous handful of years, one of the essential concentrate regions of the Union government reforming taxes initiating from GST as a good transformation in indirect taxes, waving towards Direct taxes in Assessment Procedure is by introducing a faceless e-assessment program for revenue tax. In reality, India is one of the handful of nations in the world to adopt such a program. E-assessment will bring an epitome shift in taxation by expelling the human touch in the tax assessment of the Income Tax program. Cases for scrutiny are transferred to assessment units in a random manner, utilizing automated algorithms which are generated by laptop or computer. Then, notices are issued electronically by a Central Centre, the National e-Assessment Centre, with no disclosing the identity of the assessment officer. The NeAC is the single point of faceless speak to amongst the taxpayer and the I-T Department and follows a group-based strategy.
In brief, this scheme is a manner of conducting trials in an automated way that requires dynamic authority. This scheme removes the undesirable strategies that seem when there is a likelihood for person biases and subjective judgment. The anonymous nature of the process can discourage higher-pitched assessments and outcome in objective, truthful and merely assessment orders, which might be finalised in a incredibly brief time. The ministry of finance has notified a revised Form 26AS, which has further specifics on taxpayers’ higher-worth monetary transactions, like money deposits/withdrawals and house purchases undertaken for the duration of a monetary year. This can facilitate validation of all supplied information facilitating the seamless implementation of the key section of the faceless assessment.
Under the new program, taxpayers will not be necessary to go to territorial jurisdiction tax officers or the I-T Department on getting tax scrutiny or assessment notices, preclusive the necessity for face-to-face interactions. This can bring an finish to any doable harassment of truthful taxpayers. The program is in addition anticipated to evoke a considerable raise in trust inside the program by producing the process transparent and taxpayer-friendly. The theme is about to evoke a hassle- and harassment-cost-free faceless assessment for the truthful taxpayers and can foster some non-adversarial & contributive tax surroundings.
Broadly, The Central cell shall serve a notice on the assessee specifying the issues for choice of his case for assessment. In response to that notice, the assessee might file his response inside 15 days from the date of receipt of notice. NeAC would assign instances to particular assessment units by way of an automated allocation program, therefore involving dynamic authority. At any stage exactly where a modification prejudicial to the taxpayer is proposed, NeAC shall give chance of becoming heard to the taxpayer to clarify its point of view ahead of the judgement conclusion. This could incorporate representation by way of video conferencing. Once the assessment is completed, the Central cell will transfer all electronic records to the authorised tax officer for penalty imposition, prosecution proceedings, recovery of demand, and so on.
The most critical aspect of new process is coverage of ‘Best judgement assessment’ in faceless Assessment Scheme. Earlier, greatest judgement assessment in instances of non-cooperating taxpayers could be completed only by jurisdiction AO. Territorial AOs might someday be aware of taxpayers and speak to/Convince them to get together with tax authorities to punctually complete the assessment proceedings, particularly in cases wherever taxpayers would miss the notices unknowingly. Now, even in these instances, wherever payer doesn’t abide by at intervals given timeframe, greatest judgement may be done beneath directions of NeAC, which can lead to adverse greatest judgement for taxpayers. Therefore it’s better for the sake of taxpayers to punctually fit notices given during this scheme.
AMRG’s Take
Over the last handful of years, the Income Tax Department has undergone a revamp in its strategy, from becoming just a income-collecting concern to becoming a more citizen-centric one. The faceless e-assessment program is an additional step in this path and requires forward the government’s drive towards enhancing the taxpayers’ point of view towards IT- division by creating accessible different functionalities on the net.
The program comes at a incredibly apt time, wherein the digital nature of the course of action guarantees continuity in period of the Covid-19 pandemic. If it gets implemented effectively, India can be an instance for the rest of the world in leveraging technologies for curbing undesirable practices and providing far better services to its tax-paying citizens.
~ With inputs from Himanshu Garg
(Rajat Mohan is a Senior Partner at AMRG & Associates. Views expressed are the author’s personal.)