FACELESS ASSESSMENT UNDER INCOME TAX- AN OVERVIEW

 

Income Tax Assessment

 

India has witnessed major tax reforms in recent years both under Indirect Tax as well as Direct Tax. Under Indirect Tax, GST was introduced in India in July 2017 and under Direct Tax, Indian government has announced 2 major changes in Income Tax Assessment and Appellate matters in August 2020 in order to bring transparency in tax matters and also in order to honor the honest taxpayers. These are

a)      Faceless Income Tax assessment OR Faceless assessment under Income Tax and

b)      Faceless Appeal under Income tax

The objective of introduction of faceless assessment and faceless appeals are to reduce tax disputes matters and to minimize the harassment faced by the taxpayers.

The Income Tax faceless assessment scheme is a right step towards ease of doing business and bringing more transparency in disputes of tax matters, and compliances.

Under the faceless assessment scheme, a taxpayer (assessee) is not required to visit the Income Tax Department Office or to meet any officer for their income tax-related dispute.

The objective of this scheme is to promote effective tax administration, minimize physical interface, increase accountability and less harassment. The scheme will create a positive impact for the taxpayers and it will be flexible for individuals and taxpayers. It also results in time-saving, avoiding corruption.

Under this scheme, a centralized National E Assessment Centre (“NEAC”) has been established which will act as single point of contact between the taxpayers and assessing officer. Here,an electronic automation system will automatically pick up income tax returns for scrutiny assessment on the basis of mismatches, fact error, clerical error, and risk parameters which will then be allotted randomly to any tax officer in any city or location without the knowledge of taxpayers or any other tax authorities. Any queries raised by the assessing officer would be communicated to the taxpayers via email or posting on the portal. Any replies received from the taxpayers would be forwarded to the assessing officer by NEAC.

Under this scheme, a random selection of tax cases through artificial Intelligence will lead to a reduction in discretionary power of tax officials. The objective of this scheme is to completely eliminate physical contact between the taxpayer and the Income-tax Officer to make it transparent and corruption-free.

The key features of the Income Tax Faceless Assessment Scheme are:-

Ø  No Human Intervention.

Ø  More transparency

Ø  Saving of time

Ø  Improvement in Quality

Ø  All communication electronically

Ø  Ease of Doing

Ø  No Hard Copy requirement

Ø  Video conferencing facility

Ø  Random allocation of cases

Ø  E-Verification

Since it is a new scheme and still in nascent stage, the tax payers are witnessing lot of issues in making effective use of same. Accordingly, the Income Tax department has released three different email IDs for taxpayers to register grievances and complaints under this scheme. All the complaints and queries can be furnished under three different email IDs created for their individual purposes below:-

1.      For faceless assessments: samadhan.faceless.assessment@incometax.gov.in

2.      For faceless penalty: samadhan.faceless.penalty@incometax.gov.in

3.      for faceless appeals: samadhan.faceless.appeal@incometax.gov.in

Income Tax department also dedicated an e-mail ID which is feedback.notice.neac@income tax.gov.in , for the taxpayers to register grievances related to Faceless Assessment Scheme.

 This e-mail ID will closely monitored by the National e-Assessment Centre of the Income Tax Assessment Department.

Thus, faceless assessment scheme introduced by the government is a welcome step towards reduction of corruption and harassment of taxpayers and will facilitate the transparent and fair Income tax assessment.