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Pending case in Faceless Assessment Scheme? IT Dep provided dedicated email id for grievance

Pending case in Faceless Assessment Scheme? IT Dep provided dedicated email id for grievance

The Faceless Assessment scheme is a step in the right direction to achieve ease of doing business and bringing in more transparency and certainty in tax matters. Sometimes, the assessees have to face harassment from the tax officials so for the benefit of such assessees, the government has started a faceless Income tax assessment.  The Faceless Assessment Scheme is one of the biggest Direct Tax reforms in India based on Key Principles of Efficiency, Transparency and Accountability in Income Tax assessments.  

Previously, the assessee had to visit the office of the I-T department if there was an error in the return and the same was the case if there is a dispute with a rule. The system will be helpful for such faceless tax assessments.

The NeAC is the single point of faceless contact between the taxpayer and the I-T Department and follows a team-based approach. The regional centres of the authority will be in Mumbai, Kolkata, Hyderabad, Chennai, Pune, Ahmedabad and Bengaluru.

Now the Income Tax Department creates dedicated e-mail ids for registering grievances under the Faceless Scheme.

In a move aimed to further improve taxpayer services in alignment with the Taxpayers’ Charter, the Income Tax Department creates dedicated e-mail ids for registering grievances in respect of pending cases under the Faceless Scheme.

Grievances can be furnished as under: For Faceless assessments: samadhan.faceless.assessment@incometax.gov.in; For Faceless penalty: samadhan.faceless.penalty@incometax.gov.in; For Faceless Appeals: samadhan.faceless.appeal@incometax.gov.in.

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Step wise process for Faceless Assessment, scope extended to cover best judgement assessment- CBDT

Step wise process for Faceless Assessment, scope extended to cover best judgement assessment- CBDT

Introduction

Promoting a transparent and fair tax regime, Prime Minister Narendra Modi on 13th August, 2020 unveiled ‘taxpayers’ charter’ on Thursday, enshrining rights of assesses in a statute under the Income tax law. With the launch of ‘Transparent Taxation — Honoring the Honest’ platform, Modi also unveiled faceless appeal and expanded the scope of faceless assessment, eliminating physical interface between taxpayers and tax authority.

The Central Board of Direct Taxes (CBDT) has revised the ‘E-assessment Scheme, 2019’ notified on September 12, 2019. Now, e-assessment scheme shall be called Faceless Assessment.

The National e-Assessment Centre shall intimate the assessee for conduct of faceless assessment in case wherein notice has been issued by AO. The Board has also extended its scope to cover best judgment assessments.

What was the E-assessment Scheme, 2019?

Finance Minister Nirmala Sitharaman had announced the e-assessment scheme in her Budget speech on July 5, 2019, which was subsequently inaugurated on October 7, 2019.

This was aimed at moving to faceless scrutiny and elimination of human interface in assessment proceedings. The scheme was set to bring in a “paradigm shift” in taxation by eliminating human interface in the income tax assessment system.

The Ministry of Finance vide Central Board of Direct Taxes (CBDT) notification No 61 & 62 dated 12th September 2019 has respectively notified the E- assessment Scheme 2019 & gave directions for its implementation.

E-assessment Scheme, 2019 to be now called as “Faceless Assessment”

Step wise process for Faceless Assessment

By the Notification issued by CBDT on 13th August, 2020, “E-assessment” will be now called as “Faceless Assessment”. Faceless assessment shall be made as per the following procedure:-

Step 1 – Issue of Notice on Assessee

  1. National e-Assessment Centre shall serve a notice on the assessee under section 143(2), specifying the issues for selection of his case for assessment
  2. Assessee may, within 15 days from the date of receipt of notice, file his response to the National e-assessment Centre

Step 2 – Case to be assigned to Assessment Unit

1.National e-assessment Centre shall assign the case selected for the purposes of e-assessment to a specific assessment unit in any one Regional e-assessment Centre through an automated allocation system

2. Where a case is assigned to the assessment unit, it may make a request to the National e-assessment Centre for:-

a. obtaining such further information, documents or evidence from the assesse or any other person

b. conducting of certain enquiry or verification by verification unit

c. seeking technical assistance from the technical unit

3. Where a request for obtaining further information, documents or evidence from the assessee or any other person has been made, the National e-assessment Centre shall issue appropriate notice or requisition to the assessee or any other person for obtaining the information, documents or evidence requisitioned by the assessment unit

4. Where a request for conducting of certain enquiry or verification by the verification unit has been made, the request shall be assigned by the National e-assessment Centre to a verification unit through an automated allocation system

5. Where a request for seeking technical assistance from the technical unit has been made, the request shall be assigned by the National e-assessment Centre to a technical unit in any one Regional e-assessment Centre through an automated allocation system

6. The assessment unit shall, after taking into account all the relevant material available on the record, make in writing, a draft assessment order either accepting the returned income of the assessee or modifying the returned income of the assessee, and send a copy of such order to the National e-assessment Centre with details of the penalty proceedings to be initiated therein, if any.

Step 3 – Draft Assessment Order

1.National e-assessment Centre shall examine the draft assessment order in accordance with the risk management strategy specified by the Board, including by way of an automated examination tool, whereupon it may decide to:-

a. finalise the assessment as per the draft assessment order and serve a copy of such order and notice for initiating penalty proceedings, if any, to the assessee, alongwith the demand notice, specifying the sum payable by, or refund of any amount due to, the assessee on the basis of such assessment, or

b. provide an opportunity to the assessee, in case a modification is proposed, by serving a notice calling upon him to show cause as to why the assessment should not be completed as per the draft assessment order, or

c. assign the draft assessment order to a review unit in any one Regional e-assessment Centre, through an automated allocation system, for conducting review of such order;

2. Review unit shall conduct review of the draft assessment order, referred to it by the National e-assessment Centre whereupon it may decide to:-

a. agree with the draft assessment order and intimate the National e-assessment Centre about such agreement; or

b. suggest such modification, as it may deem fit, to the draft assessment order and send its suggestions to the National e-assessment Centre;

3. National e-assessment Centre shall, upon receiving concurrence of the review unit, follow the procedure laid down in sub point (a) or (b) of point (1), as the case may be

4. National e-assessment Centre shall, upon receiving modification suggestions from the review unit, communicate the same to the Assessment unit

5. Assessment unit shall, after considering the modifications suggested by the Review unit, send the final draft assessment order to the National e-assessment Centre

6. The National e-assessment Centre shall, upon receiving final draft assessment order, follow the procedure laid down in sub point (a) or (b) of point (1),as the case may be

7. The assessee may, in a case where show-cause notice has been served upon him, furnish his response to the National e-assessment Centre on or before the date and time specified in the notice

8. The National e-assessment Centre shall,-

a. in a case where no response to the show-cause notice is received, finalise the assessment as per the draft assessment order; or

b. in any other case, send the response received from the assessee to the assessment unit;

9. The assessment unit shall, after taking into account the response furnished by the assessee, make a revised draft assessment order and send it to the National e-assessment Centre

Step 4 – Final Order and Completion of Assessment

  1. The National e-assessment Centre shall, upon receiving the revised draft assessment order:-

a. in case no modification prejudicial to the interest of the assessee is proposed with reference to the draft assessment order, finalise the assessment or

b. in case a modification prejudicial to the interest of the assessee is proposed with reference to the draft assessment order, provide an opportunity to the assessee

c. the response furnished by the assessee shall be dealt with as per the procedure laid down in point 7, 8, 9 of Step 3

2. The National e-assessment Centre shall, after completion of assessment, transfer all the electronic records of the case to the Assessing Officer having jurisdiction over such case for:

a. imposition of penalty

b. collection and recovery of demand

c. rectification of mistake;

d. giving effect to appellate orders

e. 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

f. proposal seeking sanction for launch of prosecution and filing of complaint before the Court;

3. National e-assessment Centre may at any stage of the assessment, if considered necessary, transfer the case to the Assessing Officer having jurisdiction over such case.

Faceless assessment facility was extended to the entire country on 13th August, 2020, ending territorial jurisdiction and individual discretion, where an officer was the whole and sole to the assessee. Scrutiny will be allotted on a random basis. Assessment of a taxpayer in Delhi could well be carried by an officer sitting in Pune. It will put an end to needless litigation. Best Judgements Assessments under Section 144 will be also now covered under Faceless Assessment.

What do you mean by Best Judgement Assessment?

The Best Judgment Assessment is a procedure under the Income Tax Act to comply with the principles of natural justice. Vide Section 144 of the Income Tax Act, 1961 the Assessing Officer is under an obligation to make an assessment of the total income or less to the best of his judgment in the following cases:

  1. If the person fails to file a return required under section 139(1) and he has not filed a revised return.
  2. If any person fails to comply with all the terms and conditions stipulated under a notice under section 142 or fails to comply with the directions requiring him to get his accounts audited in terms of section 142(2A).
  3. If any person, after having filed a return fails to comply with all the terms of a notice under section 143(2) requiring his presence or production of evidence and documents; or
  4. If the Assessing officer is not satisfied about the correctness and the completion of the accounts of the assessee if no method of accounting has been regularly employed by the assessee.

While Faceless Assessment and Taxpayers Charter came in force already, Faceless Appeal will be available from September 25, 2020. Under the Faceless Appeals system introduced by the government, appeals will be randomly allotted to any officer across the country and the identity of the officer deciding the appeal will remain unknown. Further, decisions will be team-based.

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Highlights of Launch of “Transparent Taxation – Honoring the Honest” by PM Modi

Highlights of Launch of “Transparent Taxation – Honoring the Honest” by PM Modi

Prime Minister has launch the platform for “Transparent Taxation – Honoring the Honest” via video conferencing today, on the 13th August 2020.

TheCBDT  has carried out several major tax reforms in direct taxes in the recent years.   Last year the Corporate Tax rates were reduced from 30 percent to 22 percent and for new manufacturing units the rates were reduced to 15 percent. Dividend distribution Tax was also abolished.

The focus of the tax reforms has been on reduction in tax rates and on simplification of direct tax laws. Several initiatives have been taken by the CBDT for bringing in efficiency and transparency in the functioning of theIT Department.

The launch of the platform for “Transparent Taxation – Honoring the Honest” by the Prime Minister will further carry forward the journey of direct tax reforms.

FM Begins her speech by saying

Steps Taken by Government in Corporate Tax and Personal Income Tax as per FM

E Assessment, DIN , Pre Filing of Tax Returns and other measures

FM further said department is helping taxpayers in filing Income Tax Returns Form. Today is a landmark day in the history of tax administration. To realize Prime Minister’s vision to empower taxpayers, through a transparent system, Honoring The Honest, Income Tax Department
has put in place a platform which is being launched today

Further She Adds Thanks to the Government Reforms and Transparency, India has seen a reduction in the number of cases for scrutiny.

Taxpayers can avail the new income tax regime from this financial year onwards and enjoy the benefits of relatively less documentation and greater ease of compliance increased liquidity in the hands of the taxpayer, and flexibility of investment choices

PM Launch new Platform

PM Modi says the new platform launched has major reforms like Faceless Assessment, Faceless Appeal and Taxpayers Charter. Faceless Assessment and Taxpayers Charter have come into force from today

PM says faceless assessment, faceless appeal and taxpayer charter part of new platform ‘Transparent Taxation – Honoring the Honest’

Faceless Assessments and Faceless Appeals and Taxpayers Charter

The process of Structural Reforms in our country has reached a new stage today. Transparent Taxation – Honoring the Honest, a new system of 21st century tax system has been launched today: PM

The facility of faceless appeal will be available for citizens across the country from 25th September. Today as the tax system is becoming faceless, it is giving confidence to the taxpayer of fairness and fearlessness says PM Modi

The emphasis is on making every rule-law, policy people-centric and public friendly. This is the use of the new governance model and the country is getting its results says PM

The honest taxpayers of the country play a big role in nation-building. When the life of an honest taxpayer becomes easy then the country also develops: PM

In the last 6 years Government’s focus has been ‘Banking the Unbanked’, ‘Securing the Unsecured’ and ‘Funding the Unfunded’. Today a new journey is starting in a way – ‘Honoring The Honest’

The facility of faceless appeal will be available for citizens across the country from 25th September. Today as the tax system is becoming faceless, it is giving confidence to the taxpayer of fairness and fearlessness: PM

Taxpayers can avail the new income tax regime from this financial year onwards and enjoy the benefits of relatively less documentation and greater ease of compliance increased liquidity in the hands of the taxpayer, and flexibility of investment choices

New arrangements and new facilities starting today, strengthens our commitment towards ‘Minimum Government, Maximum Governance’. This is a big step in the direction of reducing interference of the government in the life of the countrymen:

The honest taxpayers of the country play a big role in nation-building. When the life of an honest taxpayer becomes easy then the country also develops: PM

Record FDI coming to India shows change in fundamental and economic reforms. Even during the pandemic, FDI inflow in India has reached record levels:

From power-centric to people-centric and public friendly approach – every rule, law and policy is taken out of the process. This is the use of the new governance model of new India and the country is getting happy results as well: PM

New arrangements and new facilities starting today, strengthens our commitment towards ‘Minimum Government, Maximum Governance’. This is a big step in the direction of reducing interference of the government in the life of the countrymen: PM

From power-centric to people-centric and public friendly approach – every rule, law and policy is taken out of the process. This is the use of the new governance model of new India and the country is getting happy results as well: PM

Fundamental and Structural Reforms were needed in the tax system of India because our system was created during the period of slavery but it evolved slowly. Post Independence a lot of changes were made but the system largely remained the same: PM

Compliance is also difficult where there is complexity. If the law is very clear then the taxpayer is happy as well as the country. This work has been done for some time like GST has come by replacing dozens of taxes: PM

There was a time when there used to be a lot of talk about reforms. Decisions were taken out of compulsion and were known as reforms. Due to which the desired results couldn’t be achieved: PM Modi launches a new tax platform – ‘Transparent Taxation – Honouring the Honest’

Along with the complexities of the procedures, tax has also been reduced in India. Tax is now zero on income of Rs. 5 lakh. In the remaining slabs, the tax has come down. We are one of the lowest tax consuming countries in the world in terms of corporate tax: PM

Our effort is that our tax system should be Seamless, Painless, Faceless. Seamless means that the tax administration should work to solve the problem instead of confusing every taxpayer

Taxpayers charter is also a big step in the country’s development journey: PM

The taxpayer is now assured of fair, courteous and rational behavior. That is, the income tax department now has to take care of the taxpayer’s dignity sensitively

Out of all the tax returns in the year 2012-13, there was scrutiny of 0.94%. In the year 2018-19, this figure has come down to 0.26%. This indicates that the scrutiny of the case has reduced by almost 4 times: PM

Those who are able to pay tax but are not paying taxes, should come forward with self-motivation. This is my request: PM

More than 1,500 obsolete laws have been abolished during the last few years. India’s Ease Of Doing Business ranking has improved from 134 a few years ago to 63 today. A lot of reforms have been brought about which led to this

Compliance is also difficult where there is complexity. If the law is very clear then the taxpayer is happy as well as the country. This work has been done for some time like GST has come by replacing dozens of taxes

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IT Department hopes to complete all Faceless e-Assessments by mid-September

IT Department hopes to complete all Faceless e-Assessments by mid-September

Out of 58,319 selected cases, 8,700 cases have already been disposed off

3,130 tax personnel, including 600 IT officers are busy implementing the Faceless e-Assessment scheme of Income Tax. Out of 58,319 cases selected for faceless assessment, already 8,700 cases have been disposed off. The scheme, first announced by the Finance Minister Ms. Nirmala Sitharaman in the 2019 budget speech, is seen as a big leap towards transparent tax administration.

“This is the first time that we are doing the faceless e-assessment. The work has picked up since July, after having addressed all the issues related to infrastructure, manpower, hardware and software.

Our target is to finish all the cases by mid-September” said Shri S K Gupta, Principal Chief Commissioner of Income Tax and Member, Central Board of Direct Taxes (CBDT). 

The Income Tax Department in October 2019 rolled out the faceless e-assessment scheme that eliminates physical interface between an assessing officer and an assessee.  Eight cities – Mumbai, Delhi, Kolkata, Chennai, Bangalore, Hyderabad, Ahmedabad and Pune are covered under the scheme.  Shri Gupta said that the cases taken up for faceless e-assessment include a mix of returns filed by individuals, businesses, MSME as well as big companies.

IT Department hopes to complete all Faceless e-Assessments by mid-September
IT Department hopes to complete all Faceless e-Assessments by mid-September

How the faceless e-assessment works?

The National e-Assessment Centre in Delhi is the single point of contact for the taxpayer as well as for all units conducting assessment. 

It is the NEC which issues notices under Section 143(2) to the assesse for which the assessee is required to respond within 15 days of receipt of notice.  Upon the issue of a notice, NEC allocates the case to any Assessment Unit through an automated allocation system, ensuring anonymity.

The conventional system of scrutiny assessment involved a high level of personal interaction between the tax payer and the Income Tax Department officials. Under the faceless e-assessment system, the tax payer would not know by whom his /her return is being assessed or in which city.

“The anonymity and the absence of human interface will go a long way in addressing the issue of harassment as well as curb instances of corruption” Shri Gupta added. “Instead of territorial jurisdiction, we have brought it dynamic jurisdiction” he added.

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Know how 7116 faceless scrutiny under 1st phase disposed by Income Tax Dept

Know how 7116 faceless scrutiny under 1st phase disposed by Income Tax Dept

Finance Minister Nirmala Sitharaman had announced the faceless assessment scheme also known as the e-assessment scheme in her Budget speech on July 5, 2019, which was subsequently inaugurated on October 7, 2019. This was aimed at moving to faceless scrutiny and elimination of human interface in assessment proceedings.

The scheme was set to bring in a “paradigm shift” in taxation by eliminating human interface in the income tax assessment system. The Ministry of Finance vide Central Board of Direct Taxes (CBDT) notification No 61 & 62 dated 12th September 2019 has respectively notified the E-assessment Scheme 2019 & given directions for its implementation.

Since its launch on October 7, 2019 and implementation of first phase, faceless scrutiny assessment scheme has provided for assessment of income tax in electronic mode, where taxpayers need not see face-to-face any tax officer or visit an I-T office and can e-file reply on the income tax portal.

All the communications with taxpayers is made electronically by a central cell in Delhi and identity of all assessing officers remains unknown to taxpayers at all times. This scheme is a welcome relief in the backdrop of the COVID pandemic where social distancing is mandated as a means of safety.

Situation Prior to Faceless Assessment

  • Earlier during assessment proceedings in scrutiny cases, taxpayers or tax professional/s were required to make multiple visits to the income tax office.
  • There were allegations and some incidences of discretion and subjective approach which often resulted into high-pitched assessments. In tax recovery proceedings, almost similar types of allegations were being made.
  • These concerns will be addressed when the income tax process becoming faceless.
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First Phase of faceless assessment

In the first phase of faceless assessment, a total of 58,319 cases were assigned in an automated way randomly and these were kept away from the geographical jurisdiction of the case, based on computer algorithms. Out of this:-

  • 7,116 cases as on date have been disposed of with assessment orders issued without any additions
  • 291 cases, wherein additions are proposed to be made, have been submitted to Risk Management unit.

Cases are centrally selected for scrutiny using computer aided selection for scrutiny. Some scrutiny cases are also selected manually on the basis of specified criteria. Old assessments can also be re-opened if the assessing officer has sufficient reason to believe that some income has escaped assessment.

In all the cases, the grievances of over-pitched assessment or harassment of taxpayers/tax professional have been almost eliminated.

Separately, a Finance Ministry official said that now almost 99% returns are e-filed. Out of more than 6 crore returns filed annually, only about 3 lakh returns come under scrutiny on the basis of select risk parameters.

The government has already notified revised Form 26AS which would have additional details on taxpayers’ high-value financial transactions, like cash deposit/withdrawal, property purchases, undertaken during a financial year and would facilitate voluntary compliance and ease of e-filing of I-T returns. This will also help in verifying all available information in faceless manner and help in seamless implementation of first phase of faceless assessment. The taxpayers have been advised to check their registered e-filing accounts/email ids for notices or updates.

Let us learn more in detail about the Faceless Compliance Scheme or e-assessment scheme.

Most important feature of E-assessment Scheme – No personal appearance in the Centre’s or Units

  1. A person shall not be required to appear either personally or through authorised representative for any proceedings before the income-tax authority at the National e-assessment Centre or Regional e-assessment Centre or any unit set up under this Scheme.
  2. If a modification is proposed in the draft assessment order, and an opportunity is provided to the assessee by serving a notice calling upon him to show-cause as to why the assessment should not be completed as per the draft assessment order, the assessee or his authorised representative, shall be entitled to seek personal hearing so as to make his oral submissions or present his case before the income-tax authority in any unit under this Scheme.
  3. Such hearing shall be conducted exclusively through video conferencing, including use of any telecommunication application software which supports video telephony
  4. Any examination or recording of the statement of the assessee or any other person (other than statement recorded in the course of survey under section 133A of the Act) shall be conducted by an income-tax authority in any unit, exclusively through video conferencing, including use of any telecommunication application software which supports video telephony.
  5. The Board shall establish suitable facilities for video conferencing including telecommunication application software which supports video telephony at such locations as may be necessary, to ensure that the assessee, or his authorized representative, or any other person is not denied the benefit of this Scheme merely on the consideration that such assessee or his authorised representative, or any other person does not have access to video conferencing at his end.

How is the exchange of communication to be carried out under this Scheme?

  1. Communications between the National e-assessment Centre and the assessee, or his authorized representative, shall be exchanged exclusively by electronic mode; and
  2. Internal communications between the National e-assessment Centre, Regional e-assessment Centre’s and various units shall be exchanged exclusively by electronic mode.

How are Electronic records authenticated under this Scheme?

  1. An electronic record shall be authenticated by the originator by affixing his digital signature in accordance with section 3(2) of the Information Technology Act, 2000.
  2. In case of the originator, being the assesse or any other person, such authentication may also be done by electronic signature or electronic authentication technique in accordance with section 3A(2) of the said Act.

How are notices or orders delivered under this Scheme?

  1. Every notice or order or any other electronic communication under this Scheme shall be delivered to the the assessee, by way of-
  2. placing an authenticated copy thereof in the assessee’s registered account; or
  3. sending an authenticated copy thereof to the registered email address of the assessee or his authorized representative; or
  4. uploading an authenticated copy on the assessee’s Mobile App followed by a real time alert.
  5. Every notice or order or any other electronic communication under this Scheme shall be delivered to any other person, by sending an authenticated copy thereof to the registered email address of such person, followed by a real time alert.
  6. The Assessee shall file his response to any notice, order or any other electronic communication, under this Scheme, through his registered account.
  7. Once an acknowledgement is sent by the National e-assessment Centre containing the hash result generated upon successful submission of response, the response shall be deemed to be authenticated.

What is the procedure of assessment under this Scheme?

The assessment under this Scheme shall be made as per the following procedure:-

Step 1 – Issue of Notice on Assessee

  1. National e-Assessment Centre shall serve a notice on the assessee under section 143(2), specifying the issues for selection of his case for assessment
  2. Assessee may, within 15 days from the date of receipt of notice, file his response to the National e-assessment Centre

Step 2 – Case to be assigned to Assessment Unit

  1. National e-assessment Centre shall assign the case selected for the purposes of e-assessment to a specific assessment unit in any one Regional e-assessment Centre through an automated allocation system
  2. Where a case is assigned to the assessment unit, it may make a request to the National e-assessment Centre for:-
  3. obtaining such further information, documents or evidence from the assesse or any other person
  4. conducting of certain enquiry or verification by verification unit
  5. seeking technical assistance from the technical unit
  6. Where a request for obtaining further information, documents or evidence from the assessee or any other person has been made, the National e-assessment Centre shall issue appropriate notice or requisition to the assessee or any other person for obtaining the information, documents or evidence requisitioned by the assessment unit
  7. Where a request for conducting of certain enquiry or verification by the verification unit has been made, the request shall be assigned by the National e-assessment Centre to a verification unit through an automated allocation system
  8. Where a request for seeking technical assistance from the technical unit has been made, the request shall be assigned by the National e-assessment Centre to a technical unit in any one Regional e-assessment Centre through an automated allocation system
  9. The assessment unit shall, after taking into account all the relevant material available on the record, make in writing, a draft assessment order either accepting the returned income of the assessee or modifying the returned income of the assessee, and send a copy of such order to the National e-assessment Centre with details of the penalty proceedings to be initiated therein, if any

Step 3 – Draft Assessment Order

  1. National e-assessment Centre shall examine the draft assessment order in accordance with the risk management strategy specified by the Board, including by way of an automated examination tool, whereupon it may decide to:-
  2. finalise the assessment as per the draft assessment order and serve a copy of such order and notice for initiating penalty proceedings, if any, to the assessee, alongwith the demand notice, specifying the sum payable by, or refund of any amount due to, the assessee on the basis of such assessment, or
  3. provide an opportunity to the assessee, in case a modification is proposed, by serving a notice calling upon him to show cause as to why the assessment should not be completed as per the draft assessment order, or
  4. assign the draft assessment order to a review unit in any one Regional e-assessment Centre, through an automated allocation system, for conducting review of such order;
  5. Review unit shall conduct review of the draft assessment order, referred to it by the National e-assessment Centre whereupon it may decide to:-
  6. agree with the draft assessment order and intimate the National e-assessment Centre about such agreement; or
  7. suggest such modification, as it may deem fit, to the draft assessment order and send its suggestions to the National e-assessment Centre;
  8. National e-assessment Centre shall, upon receiving concurrence of the review unit, follow the procedure laid down in sub point (a) or (b) of point (1), as the case may be
  9. National e-assessment Centre shall, upon receiving modification suggestions from the review unit, communicate the same to the Assessment unit
  10. Assessment unit shall, after considering the modifications suggested by the Review unit, send the final draft assessment order to the National e-assessment Centre
  11. The National e-assessment Centre shall, upon receiving final draft assessment order, follow the procedure laid down in sub point (a) or (b) of point (1),as the case may be
  12. The assessee may, in a case where show-cause notice has been served upon him, furnish his response to the National e-assessment Centre on or before the date and time specified in the notice
  13. The National e-assessment Centre shall,-
  14. in a case where no response to the show-cause notice is received, finalise the assessment as per the draft assessment order; or
  15. in any other case, send the response received from the assessee to the assessment unit;
  16. The assessment unit shall, after taking into account the response furnished by the assessee, make a revised draft assessment order and send it to the National e-assessment Centre

Step 4 – Final Order and Completion of Assessment

  1. The National e-assessment Centre shall, upon receiving the revised draft assessment order:-
  2. in case no modification prejudicial to the interest of the assessee is proposed with reference to the draft assessment order, finalise the assessment or
  3. in case a modification prejudicial to the interest of the assessee is proposed with reference to the draft assessment order,provide an opportunity to the assessee
  4. the response furnished by the assessee shall be dealt with as per the procedure laid down in point 7, 8, 9 of Step 3
  5. The National e-assessment Centre shall, after completion of assessment, transfer all the electronic records of the case to the Assessing Officer having jurisdiction over such case for:
  6. imposition of penalty
  7. collection and recovery of demand
  8. rectification of mistake;
  9. giving effect to appellate orders
  10. 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
  11. proposal seeking sanction for launch of prosecution and filing of complaint before the Court;
  12. National e-assessment Centre may at any stage of the assessment, if considered necessary, transfer the case to the Assessing Officer having jurisdiction over such case.

Can any penalty be imposed under this Scheme?

  1. Any unit may, for noncompliance of any notice, direction or order issued under this Scheme on the part of the assessee or any other person, send recommendation for initiation of any penalty proceedings, against such assessee or any other person, as the case may be, to the National e-assessment Centre, if it considers necessary to do so.
  2. The National e-assessment Centre shall, on receipt of such recommendation, serve a notice on the assessee or any other person, calling upon him to show cause as to why penalty should not be imposed on him under the Act.
  3. The response to show – cause notice furnished by the assessee or any other person, if any, shall be sent by the National e-assessment Centre to the concerned unit which has made the recommendation for penalty.
  4. The said unit shall, after taking into consideration the response furnished by the assesse or any other person:-
  5. make a draft order of penalty and send a copy of such draft to National e-assessment Centre; or
  6. drop the penalty after recording reasons, under intimation to the National e-assessment Centre.
  7. The National e-assessment Centre shall levy the penalty as per the said draft order of penalty and serve a copy of the same on the assessee or any other person, as the case may be.

Is there any option available for a person aggrieved with the order under this Scheme?

An appeal against an assessment made by the National e-assessment Centre under this Scheme shall lie before the Commissioner (Appeals) having jurisdiction over the jurisdictional Assessing Officer.

The faceless assessment system of Income Tax Department has been a game changer in the arena of direct taxation. It has empowered the taxpayers and has, as a foremost mechanism, altered the facets and perception of overall tax administration in India.

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Structure and Procedure for Faceless Assessment as per Income Tax Act

Structure and Procedure for Faceless Assessment as per Income Tax Act

The finance minister in Budget 2019, has introduced a scheme of faceless e assessment which aims at eliminating the human interface between the taxpayer and the Income Tax Department. The main aim of the scheme is to lay down the procedure of assessment in electronic manner. In this article we will be discussing the various aspects of e assessment.

In the Recent time of Covid-19 and Lockdown, the faceless assessment has been a rewarding and visionary step by government which will help virtual completion of scrutiny. Further in the Finance Act 2020 the Government has proposed Faceless Appeals which will further ensure that proceedings are not stop during Covid19 problems faced by India

Faceless e assessment leads to:

  1. Bring transparency in the application of laws, remove multiple views by assessing authorities.
  2. To provide economies of scale with better utilization of resources
  3. Bring efficiency in specialized units to bring more efficiency in tax governance
  4. Use of technology such as use of data analytics, artificial intelligence, machine learning and other latest tools to ascertain misreporting or tax evasion
  5. Faceless e assessment leads to elimination of human interface.
All about Faceless assessment as per Finance act 2019

Structure of E assessment:

The following are the structure of faceless E assessment:

  1. National E assessment Centre: A National e assessment centre facilitate the conduct of e-assessment proceeding in a centralized manner, which shall be vested with the Jurisdiction to make assessment in accordance with the provisions of this scheme
  2. Regional E assessment Centre: A regional e assessment centre as it may deem necessary to facilitate the conduct of e-assessment proceedings in the cadre controlling region of a principal chief commissioner, which shall be vested with the jurisdiction to make assessment in accordance with the provisions of the scheme.
  3. Assessment units: Assessment unit is set up for identifying the issues, material for the determination of any liability, analyzing information and such other function
  4. Verification unit: It is set up for enquiry, cross verification, examination of books of accounts, witness and recording of statements, and such other functions.
  5. Technical unit: Technical unit is setup for technical assistance including any assistance or advice on legal, accounting, forensic, information technology, valuation, transfer pricing, data analytics, management or any other technical matter.
  6. Review unit: Review unit is set up for reviewing the draft assessment order to check whether the facts, relevant evidence and law and judicial decisions have been considered in the draft order.

Procedure for E assessment:

The assessment under this scheme shall be made as per the following, namely:

  1. The National E- assessment centre shall serve a notice on the assessee under section 143(2), specifying the issues for selection of his case for assessment.
  2. The assessee may, within 15 days from the date of receipt of notice file his response to the National E assessment Centre.
  3. The National E assessment centre shall assign the case selected for the purposes of e-assessment under this scheme to a specific assessment unit in any one Regional E-assessment centre through an automated allocation system.
  4. Where a case is assigned to the assessment unit, it may make a request to the national e assessment Centre for:
    • Obtaining such further information, documents or evidence from the assessee or any other person, as it may specify
    • Conducting of certain enquiry or verification by verification unit; and
    • Seeking technical assistance from the technical unit;
  5. Where a request for obtaining further information, documents or evidence from the assessee or any other person has been made by the assessment unit, the national e assessment centre shall issue appropriate notice or requisition to the assessee or any other person for obtaining documents or evidence requisition by the assessment unit;
  6. Where a request for conducting of certain enquiry or verification by the verification unit has been made by the assessment unit, the request shall be assigned by the national e assessment centre to a verification unit through an automated allocation system.
  7. Where a request for seeking technical assistance from the technical unit has been made by the assessment unit, the request shall be assigned by the national e assessment centre to a technical unit in any one regional e-assessment centre through an automated allocation system.
  8. The assessment unit shall after taking into account all the relevant material available on the record, make in writing, a draft assessment order either accepting the returned income of the assessee or modifying the returned income of the assessee, as the case may be and send a copy of such order to the National E assessment Centre.
  9. The National E assessment unit shall while making draft assessment order provide details of the penalty proceedings to be initiated therein, if any
  10. The National E assessment unit shall examine the draft assessment order in accordance with the risk management strategy specified by the board, including by way of automated examination tool, whereupon it may decide to-
    • Finalise the assessment as per the draft assessment order and serve a copy of such order and notice for initiating penalty proceedings if any to the assessee along with the demand notice specifying the sum payable by or refund of any amount due to the assessee on the basis of such assessment; or
    • Provide an opportunity to the assessee in case a modification is proposed by serving a notice calling upon him to show cause as to why the assessment should not be completed as per the draft assessment order; or
    • Assign the draft assessment order to a review unit in any one regional e assessment Centre, through an automated allocation system, for conducting review of such order.
  11. The review unit shall conduct review of the draft assessment order referred to it by the National E assessment Centre whereupon it may decide to:
    • Concur with the draft assessment order and intimate the National E assessment Centre about such concurrence; or
    • Suggest such modification as it may deem fit, to the draft assessment order and send its suggestions to the National E assessment Centre;
  12. The National E assessment Centre shall, upon receiving concurrence of the review unit, follow the procedure laid down in sub-paragraph (b) of point 10, as the case may be;
  13. The National E assessment Centre shall, upon receiving suggestions for modifications from the review unit, communicate the same to the assessment unit;
  14. The assessment unit shall, after considering the modifications suggested by the review unit, send the final draft assessment order to the National E assessment Centre;
  15. The National E assessment Centre shall, upon receiving final draft assessment order, follow the procedure laid down in sub para (a) of point 10, as the case may be;
  16. The assessee may, in a case where show-cause notice under sub-paragraph (b) of point 10 has been served upon him, furnish his response to the National E assessment Centre on or before the date and time specified in the notice;
  17. The National E assessment Centre shall,
    • In a case where no response to the show cause notice is received finalise the assessment as per the draft assessment order as per the procedure laid down in sub-paragraph (a) of point 10; or
    • In any other case, send the response received from the assessee to the assessment unit;
  18. The assessment unit shall, after taking into account the response furnished by the assessee, make a revised draft assessment order and send it to the National E assessment Centre;
  19. The National E assessment Centre shall, upon receiving revised draft assessment order:
    • In case no modification prejudicial to the interest of the assessee is proposed with reference to the draft assessment order, finalise the assessment as per the procedure laid down in sub paragraph (a) of point 10; or
    • In case no modification prejudicial to the interest of the assessee is proposed with reference to the draft assessment order, provide an opportunity to the assessee as per the procedure laid down in sub paragraph (b) of point 10; or
    • The response furnished by the assessee shall be dealt with as per the procedure laid down in point 14, 17 and 18
  20. The National E assessment Centre shall, after completion of assessment, transfer all the electronic records of the case to the assessing officer having jurisdiction over such case, for-
    • 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 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;
  21. Notwithstanding anything contained in point 20, the National E assessment Centre may at any stage of the assessment, if considered necessary, transfer the case to the assessing officer having jurisdiction over such case.
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