FACELESS INCOME TAX ASSESSMENT- COMMON CHALLENGES FACED BY TAX PAYERS

 FACELESS INCOME TAX ASSESSMENT

 

When faceless Income Tax Assessment was announced by the tax department, it came as a sigh of relief and as a breeze of fresh air to both the assesses as well as tax professionals as there was an expectation that the entire assessment and litigation system will become more transparent.

FACELESS INCOME TAX ASSESSMENT – Objectives

The new Faceless Income Tax Assessment Scheme was announced to achieve the following objectives:

a)      Ease of compliance

b)      To curb corruption and malpractices

c)       To make the entire Income Tax assessment process faceless and painless for assesses

d)      To make use of Technology to bring more transparency and accountability

e)      No physical interaction between tax payers and tax officers by issuance of e-Income Tax Notice

 INCOME TAX ASSESSMENT SCHEME- Some new Features

There were many features prescribed in the new Income Tax Assessment scheme like artificial intelligence, technology based interface, data analytics tools and system of allotment of assessment cases to assessment unit through computerized automated process to bring more efficiency and accountability in the entire Income Tax assessment process.

However, despite the noble intention of the government of India, many a times, Income tax assessment has been conducted without keeping in view the aforesaid objectives of the scheme.

COMMON CHALLENGES FACED DURING FACELESS INCOME TAX ASSESSMENT

Following are some of the challenges being faced by the taxpayers as well as tax officers while conducting Faceless Income Tax Assessment:

1)      Written Submission not accepted/understood

 The intention of faceless assessment was to rely on the written submissions of the assessee in order to eliminate the human intervention, however, it has been observed that most of the times, the assessing officer, either could not understand the submission or chose to ignore the same due to which the assessee could not explain the factual and legal points which leads to lot of ambiguity and adverse assessment orders are being passed

2)       Not Sufficient time provided

It has been noticed that very less time is provided to file response to the Income Tax Notice issued under faceless assessment schemes. Also, the portal does not allow filing response after the end of specified time. Normally, 15 days are provided to file response to first Income Tax Notice and 7 days for filing response to subsequent Income tax notice. Therefore, the tax payers always face paucity of time to prepare proper response to the Income tax notice. Further, it has been observed that the time allowed on due date of filing response is generally early morning before 11 AM. It means that last date cannot be counted for filing response.

3)      Allotment of assessment cases

 Under the new scheme of Income tax assessment, the cases are allotted to the Assessment Unit through an automated system due to which sometimes cases are being allotted to less experienced assessing officer who has little or no experience of handling the complex cases. Accordingly, they cannot appreciate the facts of the cases and written submissions filed by the tax payers and passes orders which are contrary to facts and law and it might lead to further litigation.

4)       Technical glitches on the portal

There are lots of technical glitches on the portal which delay the entire filing process. Also, the size of uploading the scanned documents are pre-defined and sometimes it becomes very difficult to file voluminous information after reducing the size of the scanned documents on the portal.

5)      Personal Hearing by Video Conferencing

Under the Faceless Income Tax Assessment Scheme, an option has been provided to the assessee that they can request for personal hearing in the matter via video conferencing in case of more complex cases, however, the assessing officer has discretion to allow such video conferencing or disallow the same and normally, the assessing officer does not allow such hearing via VC which leads to violation of constitutional rights of the assessee.

 Thus, it may be seen from the above, that despite of good intentions behind the introduction of new Income Tax Assessment scheme, there are some challenges and problems being faced by both the tax payers as well as the tax authorities in proper implementation of the scheme and the government must resolve the aforesaid issues at the earliest so that purpose and objective of new Faceless Income Tax Assessment Scheme in not defeated.

 

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