Faceless e-assessments: All you need to know


 


The Income tax department has launched a Faceless e-assessment scheme with a mission that it can bring in a  “Paradigm shift” in taxation. This would be done by turning the income tax assessment system completely free of human interference.

Ajay Bhushan Pandey, the revenue secretary of India said that the e-assessment scheme will provide ease and convenience to the taxpayers. As a first step, the National E-Assessment centre has selected  58,322 income tax cases.


What is e-assessment scheme? 


After filing the returns, there are often chances of discrepancy; in such cases the income tax department serves a notice under section 143(2), asking the assessee to meet the assessing officer on a particular date and produce evidence in support of the return filed by him/her. This process is termed as Scrutiny assessment.  It is this personal interaction between the tax department and taxpayers which has been substituted by the faceless e-assessment scheme. 


Benefits of e-assessment scheme:


  • Greater transparency in the Scrutiny assessment process.
  • The scheme has introduced dynamic jurisdiction under which cases from one part of the country can be handled from a different part.
  • Order or Notice will be delivered to the assessee electronically. It will either be uploaded on his e-filing app or mobile app. Another mode could be an email sent to him.
  • It will help in better monitoring of cases and their speedy disposal.
  • It will keep undesirable practices and corruption at bay.
  • Assessing officers will be selected randomly.

NeAC is an independent office that has been set up in Delhi to look after the e-assessment scheme. It will be headed by the principal chief commissioner of Income Tax. Apart from NeAC there are 8 Regional assessments centres (ReAC). Set up in the cities of

– Delhi,
– Mumbai,
– Chennai,
– Kolkata,
– Ahmedabad,
– Pune,
– Bengaluru and
– Hyderabad
Which would comprise assessment unit, review unit, technical unit and verification units.


Procedure for assessment:


  1. A Digitally signed notice will be issued by NEC under section 143 (2). The same will be uploaded on the taxpayer’s account on income tax India efiling website. The assessee needs to respond to this notice within 15 days.
  2. The NEC will allocate an AU which will identify the issue, seek clarification from the assessee and do some verification.
  3. The AU will then prepare a draft assessment order(DAO) by either accepting the returned income or modifying the returned income or this is send to NEC for review.
  4. If a show cause notice is issued then the assessee will have to submit a response within the specified timeline.
  5. On completion of assessment all records will be transferred to the assessing officer.

The e-assessment scheme is a welcome step to ease the assessment procedure, however its success solely depends on its careful implementation.

CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2Win.in. Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.