September 25, 2020

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Indian IT Department looks to complete Faceless e-Assessments

The Indian Tax department has been appreciated for its continuous efforts towards making India’s tax administration taxpayer-friendly, transparent and geared towards facilitating voluntary compliance by Union Minister for Finance & Corporate Affairs, Ms Nirmala Sitharaman

There has been a paradigm shift in its role in recent years, from being just a revenue collecting organisation to becoming a more citizen-centric organisation.

Various reform measures will pave the way for an Aatma Nirbhar Bharat, India’s ambitions of becoming self-reliant.

Dr Ajay Bhushan Pandey, Finance Secretary, recognised that the tax department has had to navigate a delicate balance between enforcement and service.

He appreciated the Department for having increasingly oriented itself towards becoming taxpayer-service centric without compromising its enforcement role by deploying non-intrusive tools of data mining and data analytics.

In the Union Budget 2019, the Finance Minister proposed the introduction of a scheme of faceless e-assessment.

The scheme, first announced by the Finance Minister Ms Nirmala Sitharaman in the 2019 budget speech, is seen as a big leap towards transparent tax administration.

The scheme, a procedure to carry out a faceless assessment through electronic mode, sought to eliminate the human interface between the taxpayer and the income tax department.

The Indian IT Department looks to complete Faceless e-Assessments by mid-September 2020.

Over 3,100 tax personnel, including 600 IT officers are busy implementing the Faceless e-Assessment scheme of Income Tax. Out of 58,319 cases selected for faceless assessment, 8,700 cases have already been disposed.

“This is the first time that we are doing the faceless e-assessment. The work has picked up since July, after having addressed all the issues related to infrastructure, manpower, hardware and software.  Our target is to finish all the cases by mid-September” said S K Gupta, Principal Chief Commissioner of Income Tax and Member, Central Board of Direct Taxes (CBDT).

The Income Tax Department in October 2019 rolled out the faceless e-assessment scheme that eliminates physical interface between an assessing officer and an assessee.

Eight cities – Mumbai, Delhi, Kolkata, Chennai, Bangalore, Hyderabad, Ahmedabad and Pune are covered under the scheme.

The cases taken up for faceless e-assessment include a mix of returns filed by individuals, businesses, MSME as well as big companies.

The National e-Assessment Centre in Delhi is the single point of contact for the taxpayer as well as for all units conducting assessment.

It is the NEC which issues notices under Section 143(2) to the assessee for which the assessee is required to respond within 15 days of receipt of notice.

Upon the issue of a notice, NEC allocates the case to any Assessment Unit through an automated allocation system, ensuring anonymity.

The conventional system of scrutiny assessment involved a high level of personal interaction between the tax payer and the Income Tax Department officials.

Under the faceless e-assessment system, the tax payer would not know by whom his /her return is being assessed or in which city.

Instead of territorial jurisdiction, the new system has brought in dynamic jurisdiction.

Mr Gupta noted that, “The anonymity and the absence of human interface will go a long way in addressing the issue of harassment as well as curb instances of corruption.”