FACELESS ASSESSMENT – A REVOLUTIONARY CHANGE IN DIRECT TAX REGIME

FACELESS ASSESSMENT – A REVOLUTIONARY CHANGE IN DIRECT TAX REGIME

  • 17 Jun 2021
  • Posted By arkca

Based on Key Principles of Efficiency, Transparency and Accountability, The Faceless Assessment Scheme introduced in union budget 2019, is one of the biggest Direct Tax reforms in India. The scheme seeks to eliminate the human interface between the taxpayer and the income tax department. The scheme lays down the procedure to carry out a faceless assessment through electronic mode. With effect from 13 August 2020, the e-assessment scheme of 2019 has been amended and hence is known as the Faceless Assessment Scheme. The Faceless Assessment Scheme applies to scrutiny assessments and best decision assessments. It is now applicable from 01-04-2021.

Framework for Faceless Assessment

How would you know that your case has been picked up for faceless e-Assessment?

You will receive notice under section 143(2) 1 of the Act digitally signed by NeAC officer in your registered account with e-filing (www.incometaxindia.gov.in), (www.incometaxefilingindia.gov.in) followed by real time alert in the form of a sms and/or an email.

Procedural Aspects

  • The Central cell shall serve a notice on the assessee specifying the issues for selection of his case for assessment.
  • In response to that notice, the assessee may file his response within 15 days from the date of receipt of notice.
  • NeAC would assign cases to specific assessment units through an automated allocation system, thus involving dynamic authority.
  • At any stage where a modification prejudicial to the taxpayer is proposed, NeAC shall give opportunity of being heard to the taxpayer to explain its perspective before the judgement conclusion. This could include representation through video conferencing.
  • Once the assessment is completed, the Central cell will transfer all electronic records to the authorized tax officer for penalty imposition, prosecution proceedings, recovery of demand, etc.

 

Procedure for Appeal

An appeal against an assessment order or penalty order made by the National e-Assessment Centre under this scheme can be filed before the Commissioner (Appeals) having jurisdiction over the jurisdictional Assessing Officer.

Communication and Electronic record

All communications between the National e-Assessment Centre and the taxpayer, or his authorized representative, shall be exchanged exclusively by electronic mode; and

All internal communications between the National e-Assessment Centre, Regional e-Assessment Centres and various units shall be exchanged exclusively by electronic mode. However, the electronic exchange of communication is not applicable where the verification unit approves a personal hearing.

All the electronic records issued under the scheme shall be authenticated by the National e-assessment centre by affixing digital signature or by the taxpayer or any other person by affixing their digital signature or through an EVC. Every notice or order or any other electronic communication under this scheme shall be delivered to the taxpayer, by way of:

 

  • Placing an authenticated copy of the communication in the taxpayer’s registered account ;
  • Sending an authenticated copy thereof to the registered email address of the taxpayer or his authorized representative; and
  • Uploading an authenticated copy on the assessee’s Mobile App; and followed by a real-time alert to the taxpayer.

 

The taxpayer shall file his response to any notice or order or any other electronic communication, under this scheme, through his registered account, and once an acknowledgement is sent by the National e-Assessment Centre containing the hash result generated upon successful submission of response, the response shall be deemed to be authenticated.

 

Conclusion

 

The shift is an attempt to honour the honest with an objective to strengthen the government’s direct tax reforms. The tax department’s way of dealing with tax payers is considered an unpleasant one. These changes in the tax filing process point to a shift in the focus of the government from considering the department from a revenue needs to thinking of it as one supposed to serve the taxpayer. Faceless e-assessments have been introduced to ease evaluation system. The move will do away with physical interface to remove unethical practices. Faceless e-assessments will eventually benefit honest tax filers.

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