E-Assessment Scheme for Faceless Scrutiny of Income Tax Return

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In the budget speech 2018-19 , Arun Jaitley said "I propose to amend the I-T Act to notify a new scheme for assessment where the assessment will be done in electronic mode which will almost eliminate person-to- person contact leading to greater efficiency and transparency''.  The CBDT vide Notification No. 61/2019 dated September 12, 2019 has notified the E-Assessment scheme 2019 for faceless scrutiny of Income Tax returns.  

Under the scheme all the communication between the taxpayer and the Assessing officer will be purely electronic, communications to be digitally authenticated and above all the Assessee’s will not be required to make personal appearance before assessing officer. 

The foremost objective of the scheme is to reduce the interface between the taxpayer and the taxpayer and the tax department and to impart greater transparency & accountability.


So now the question arises how this E-Assessment will work? How the Assessing officer will make assessments? How the entire communication will work? Here's answer to all these questions. 

A quick summary of entire process under E-Assessment scheme:-
  • The scrutiny notice will be issued to the individual under section 143(2) of the Income-tax Act, 1961, if he has under-reported his income or over-stated losses. ( Re-assessment under section 147 is not covered under this scheme)
  • The individual will have to reply within 15 days from the date of receipt of notice. 
  • The notice issued will be sent electronically on the taxpayer's account on the e-fling website, to the registered email address of the taxpayer or on the mobile app of the income tax department which has the registered mobile number.
  • Individual will be required to respond to the notice or order received through the registered account only. 
  • The response shall be considered successfully submitted once individual has received the acknowledgement from the National E-Assessment Centre (NEAC).
  • Individual taxpayers would not be required to appear either personally or through authorised representative in relation to the proceedings related to the scheme before income tax authority, NEAC or Regional E-Assessment Centre (REAC) or any unit set up under the scheme.
  • All the communication between the department and taxpayer would be done electronically. Even all the internal communication within the income tax department will be electronic.
  • The e-assessment scheme will be fully automated. Under the scheme, NEAC can assign the scrutiny case to any REAC through an automated allocation system
  • If the regional assessment unit wants further information or documents from the taxpayer, then such request to be made to NEAC.
  • The regional assessment unit will make a draft assessment order and send it to NEAC.
  • The NEAC will examine the draft received in accordance with the risk management strategy specified by the CBDT.
  • After the finalisation of assessment electronic file will be handed over by NEAC to the jurisdictional Assessing Officer.

Other Important aspects of E-Assessment:-

  • There is no personal appearance in the process, but an Assessee can request a personal hearing of the same. The personal hearing shall take place through a video conference.
  • Further Video conference facilities shall be established at such locations for the Assessee to visit and attend video conference, even though he may not have video conference facilities at his place.
  • Re- assessment under section 147 has not been covered and that has to happen through offline mode.
  • Appeals under section 246A shall remain lie with the jurisdictional Commissioner (Appeals).
Powers remain with Jurisdictional Assessing Officers:-
  • Imposition of penalty.
  • Collection and recovery of demand.
  • Rectification of mistake.
  • Giving effect to appellate orders.
  • Submission of remand report, or any other report to be furnished, or any representation to be made or any record to be produced before the Commissioner (Appeals), Appellate Tribunal or Courts, as the case may be.
  • Proposal seeking sanction for launch of prosecution and filing of complaint before the court However, NEAC may at any stage of the assessment, if considered necessary, transfer the case to the Assessing Officer having jurisdiction over such case.

Conclusion:-
  • The new scheme will change the way of scrutiny of the Income Tax return. It will bring more transparency, efficiency and improved monitoring etc.
  • Technical difficulties can also be expected during the initial phase of the faceless assessment.
  • The scheme was announced in budget and notified in the month of September 2019 and the department has selected 58,322 cases for scrutiny under the new scheme and the e-notices have been served before September 30, 2019, for the cases of Assessment Year 2018-19.
  • One more step towards digital India.

[Source: Incometaxindia.gov.in & Icai.org]



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[Disclaimer:-This article is being furnished for informational purposes only. We make every effort to use reliable & comprehensive information, but we do not represent that the contents of the article are accurate or complete.]


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