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August 18, 2021

Faceless Assessment Scheme working towards efficient & transparent system: CII

by CA Shivam Jaiswal in Income Tax

Faceless Assessment Scheme working towards efficient & transparent system: CII

Faceless Assessment Scheme is working towards ensuring a robust, efficient and transparent system – CII Survey

On the completion of one year of the Faceless Assessment Scheme, CII conducted a survey to gauge industry views on the effectiveness of the Scheme, which revealed overwhelming support for the new system.

“The Transparent Taxation Platform, and more particularly the Faceless Assessment Scheme, has been a significant step forward in reassuring businesses about the tax governance and administration system being impartial and data-based.”, said Mr Chandrajit Banerjee, Director General, Confederation of Indian Industry (CII).

88% of respondents were of the view that faceless assessment is a positive initiative by the Government as it will improve efficiency, transparency and accountability of tax administration. A large majority (88%) of the respondents feel that faceless assessments will help realise the government’s objective of reducing interface and reducing undesirable practices on the part of tax officials.

Despite the COVID related challenges for both the tax administration and the taxpayers alike, more than 70% respondents had excellent to good experience of faceless assessments. This is reflective of a successful and timely beginning of the Scheme.

73% of the respondents felt that Faceless Assessment has resulted in saving their precious time as compared to the earlier physical assessments. Particularly in the pandemic times, this facility has been very useful.

67% of the respondents felt that under Faceless assessment, the final assessment order was better than the past physical scrutiny assessments.  This positive feedback from 2/3rd of the respondents reflects the taxpayers’ growing confidence in the new Scheme.

A large majority of the respondents felt that the queries raised were focussed and specific to their cases. However, many respondents also felt that there appeared to be a few roving type of queries. It is a good beginning but, going forward, Government may need to consciously avoid phishing and roving queries to build trust with taxpayers.

A majority of the respondents did not feel the need for personal hearing at any stage of the assessment proceedings. This reflects the taxpayers’ confidence and corroborates the Government’s vision that faceless assessments will bring ease and convenience to taxpayers.

All in all, industry participants have a positive review of the Faceless Assessment Scheme. Industry is hopeful that the few issues regarding the system interface, time allowed, and video conferencing facilities would be soon resolved with the help of technology improvements.

In order to impart greater efficiency, transparency and accountability to the assessment process, appeal process and penalty process under the Income Tax Act, Prime Minister Shri Narendra Modi on 13 August 2020 launched the “Transparent Taxation – Honouring the Honest” platform.

The platform includes the following three areas, viz. faceless assessment, faceless appeals and Taxpayers’ Charter (TC). All three together contribute to a robust system for taxpayers.

The new scheme involves a step-wise process to conduct scrutiny assessment by harnessing use of technology for communication between the taxpayer and the tax authorities. It also includes a team-based assessment with a dynamic jurisdiction process. The Scheme provides for all communications between the taxpayer and the tax authorities, inter se, to be mandatorily only through electronic mode. Also, under certain circumstances, the Central Board of Direct Taxes may provide for video/audio conferencing facility for personal hearing on demand.

14 August 2021

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