2019 – Posted in: RSTV – Tags: Central board of direct taxes, central board of indirect taxes and customs, Income Tax department

Income Tax E-Assessment 2019

In News

Finance Minister Nirmala Sitharaman has inaugurated the Income Tax Department’s National E-assessment Centre (NeAC) on 8^th October.

E-Assessment Scheme, 2019

In a big relief to taxpayers, the government has set the ball rolling on faceless and paperless income tax proceedings with the notification of the income tax E-Assessment Scheme to be implemented from Vijayadashami day, i.e. October 8, 2019. This move is expected to cut down on harassment of taxpayers and improve the image of the Income-Tax Department by ensuring that all tax proceedings including scrutiny are done on a centralized basis without any involvement of the assessee.

In this scheme, the Central Board of Direct Taxes will set up national and regional e-Assessment centres as well as assessment units to conduct electronic assessments and proceedings by officers in another city. The national centre will send notices to assessees explaining the issues for selection of their case for assessment and the assessee will be having 15 days to respond. Then the case will get allocated to the assessing officer by the Centre through an automated system. All the electronic records will get transferred to the Assessing Officer for imposing a penalty or collection and recovery of demand by the National e-assessment Centre.

What is it?

Once we fill our income tax returns for the year, we sit back and relax. But sometimes the tax department disagrees with our calculations. A few months after the filing of income tax returns, the department sends to all assessees an intimation of the Income Tax Act under Section 143(I) which shows the computation of income tax as done by the assessee as well as by the department. A discrepancy may result in the paying of more taxes which you may need to pay up.

Also, if sometimes the tax authorities consider it necessary to ensure that the assessee has not understood income, computed loss or underpaid taxes, they will serve a notice under Section 143(2) which requires the assessee to meet the assessing officer on a particular date and time. This is being called as ‘scrutiny assessment.’ This is the personal between the tax department and the taxpayer which can be made ‘online’ or ‘faceless’ now.

Why is it important?

E-assessment is helpful in bringing greater transparency and accountability to the scrutiny process. The scope for bias or corruption is reduced on the part of assessing officers. The team-based assessment, as well as dynamic jurisdiction, is introduced in this scheme under which cases from one part of the country can be handled in any other part.

Every notice or order gets delivered to the assessee via the electronic medium. It is either uploaded on the assessee’s e-filling account or mobile application (Aaykar Setu) or being sent by e-mail followed by an alert in both the cases. The response needs to get filled by an assessee through his/her e-filling account within the 15 days time period. The national e-assessment centre on receiving the response will assign the case to an ‘assessment unit’ (AU) in any part of the country through an automated allocation system. After going thoroughly through the details, the draft assessment order gets passed by the AU either accepting the taxpayer’s returned income or modifying it. The NC will get a look in it then and a final assessment order will be made by him after giving the assessee an opportunity to be heard.

A paradigm shift in e-assessment

The Central Board of Direct Taxes (CBDT), which is the apex tax administrative body progressively amended rules, notified various procedures and issued the guidelines to increase the scope of e-proceedings between 2016 and 2018.

It has also issued instructions that income tax-assessment proceedings to be framed in the year 2018-19 and 2019-20, and which shall be conducted through the e-proceeding facility. There are certain types of proceedings such as search and seizure cases, re-assessments, best judgment assessments, etc, where the assessment would be done through a personal hearing process which is considered to be an exception. The certain situations have also been specified by the CBDT in which taxpayers may be required to appear in person although the assessment is being carried out through e-proceedings.

Therefore, the Government’s objective was to move from ‘e-proceedings’ towards an ‘e-assessment’ mechanism where the tax officer conducting the assessment would not be known to the taxpayer.

The Finance Act has amended the provisions of the Income-Tax Act, 1961, to empower the government to notify a new tax assessment scheme towards this objective.
The Finance Minister has also stated that the new scheme would be launched in a phased manner in the current financial year i.e. 2019-29 while presenting the Union Budget.
The new scheme was slated to bring in a paradigm shift in the way tax assessments were carried out in India.

Regional e-Assessment Centre (REC)

There would be eight Regional e-Assessment Centres in Delhi, Mumbai, Kolkata, Ahmedabad, Pune, Bengaluru, and Hyderabad in addition. Apart from assessment units, these centers will also review, technical and verification is also being done of these units. Chief Commissioner of Income Tax (CCIT) will head each ReAC.

Assessment Units (AU): AU will scrutinize the tax returns, analyze submissions, make requests if any verification or technical assistance is required.

Verification Units (VU): The functions like making an enquiry, cross verification, the examination of records, recording statements required for verification will be performed.

Technical Units: IT will give advice on legal, accounting, forensics, information technology, valuation, transfer pricing, data analytics, the management or other technical matter required for conducting assessments.

Review Units: It will draft assessment order to check if all the information like material evidence, relevant points of fact and law, relevant tax case laws have been included in the DAO. It also ensures the arithmetical accuracy of modifications proposed and perform other functions as may be required for review.

Source: RSTV

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