Every now and then, it’s heard that assesse is being harassed by the income tax officers by one or the other way. After listening to the complaints received by the government. The government rolled out the faceless E-Assessment Scheme which will eliminate the physical interface between an assessing officer and an assesse.
Will all the cases be scrutinized under this scheme?
No, not all cases will be scrutinized under this scheme. In this scheme the cases for scrutiny will be selected based on certain criteria, including cases where there are serious discrepancies.
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Is assesse still physically required to visit the ITO at the time of scrutiny?
A person is not required to appear physically in connection with any proceedings under this scheme before the income tax authority at the National or Regional e-Assessment Centre or any other unit set up either personally or through any authorized representative of his / her.
In a case where modification is proposed in the draft of assessment order, the taxpayer will be given an opportunity to submit the required documents against such modifications. The taxpayer or his authorized representative will also be entitled for a personal hearing with income tax authority in any unit prescribed. But such hearing would be conducted exclusively through a voice call or video conferencing, in accordance with the procedure laid down by the CBDT.
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What are the powers of ITO?
An income tax authority has the power under this scheme to examine a taxpayer or record any taxpayer’s statement. Through video conferencing and video telephony, the income tax authority would do the same.
To support the scheme, at such locations as may be required, the CBDT shall create suitable facilities for video conferencing and video telephony.
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What’s the procedure of E-Assessment?
The procedure of E-assessment is discussed below-
- The National E-Assessment Center will serve a notice accordance with the terms of section 143(2) specifying the issues for selecting the taxpayer’s case for this evaluation.
- The taxpayer will have to reply to the National E-Assessment Center within fifteen days.
- The National E-Assessment Center will assign a specific ‘assessment unit’ to the selected case in any ‘Regional e-Assessment Center’ through an automated system made for the same.
- Once case is assigned to an assessment unit, it may make a request to the National E-Assessment Centre for :
- a) Obtaining further information, documents or evidences from the taxpayer or any other person, as required.
- b) An enquiry or verification will be conducted by verification unit; and
- c) Technical assistance will be taken from the technical unit.
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- If any request is made for any documents or evidence by the assessment unit, the National E-Assessment Center shall issue notice to the taxpayer or any required person to obtain the data, documents or evidence sought by the assessment unit.
- Thereafter an investigation or verification as above, the application shall be assigned to a verification unit by the National E-Assessment Center through an automated allocation process.
- After the request for technical assistance as referred to in point 4, the request shall be assigned by the National E-Assessment Center to a technical unit in any one local E-Assessment through an automated allocation system.
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- Thereafter taking into account all the relevant material collected as above, the ‘assessment unit’ passes a draft assessment order either approving the taxpayer’s income in compliance with the answer and reply submitted by the taxpayer or amending the taxpayer’s income, as the case may be, as well as sends a copy of that order to the National E-Assessment Center.
- The ‘assessment unit’ shall provide details of the penalty proceedings to be initiated therein while drafting the assessment order, if any.
- The National E-Assessment Center shall review the draft assessment order in accordance with the risk management strategy defined by the CBDT, where it may agree to:
a) Finalise the assessment as per the draft and serve a copy of such order and notice for initiating penalty proceedings, if any, on the taxpayer, along with the demand notice, specifying the sum payable by, or refund of any amount due to the taxpayer on the basis of such assessment; or
b) Provide an opportunity to the taxpayer, 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) For review of such order the draft assessment order will be assigned to a review unit in any of the Regional E-Assessment Centers through an automated allocation system.
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The reviewing unit shall conduct check of the draft assessment order, referred to it by the National E-Assessment Centre, whereupon it may decide to:
a) Concur with the draft assessment order and intimate the National E-Assessment Centre about such concurrence; or
b) Suggest modification as it may deem fit, to the draft assessment order and send its suggestions to the National E-Assessment Centre.
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The National E-Assessment Centre shall, upon receiving concurrence of the
- Review unit finalise the draft assessment order or provide an opportunity to the taxpayer in case a modification is proposed.
- Upon receiving suggestions for modifications from the review unit, communicate the same to the assessment unit. 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.
- After receiving final draft assessment order, finalise the draft assessment order, or provide an opportunity to the taxpayer in case a modification is proposed, as the case may be.
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The taxpayer may, in a case where notice is issued for making submissions against the draft assessment order, furnish his response to the National E-Assessment Centre on or before the date and time specified in the notice.
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 taxpayer to the assessment unit.
The assessment unit shall after taking into account the response furnished by the taxpayer, make a revised draft assessment order and send it to the National E-Assessment Centre. The assessment unit shall, after taking into account the response furnished by the taxpayer, make a revised draft assessment order and send it to the National E-Assessment Centre.
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The National E-Assessment Centre shall, upon receiving the revised draft assessment order:
- In case there is no modification against the interest of the taxpayer is proposed with reference to the draft assessment order, finalise the draft assessment; or
- In case a modification is required against the interest of the assesse is proposed with reference to the draft assessment order, provide an opportunity to the taxpayer for hearing and making submissions
- The response furnished by the taxpayer shall be dealt with by the National e-Assessment centre and the draft assessment order finalised.
- 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.
The National E-Assessment Centre may at any stage of the assessment, if it considers necessary, transfer the case to the Assessing Officer having jurisdiction over such case.
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What is the Procedure for penalty?
- Any unit may, during assessment proceedings, for non-compliance of any notice by the part of the taxpayer or representative, may issue an order under this and send recommendation for initiation of any penalty proceedings under the income tax law, against such taxpayer or any other person, as the case may be, to the National E-Assessment Centre, if it considers necessary or expedient to do so.
- The National E-Assessment Centre shall, on receipt of such recommendation, serve a notice on the taxpayer or any representative, as the case may be, calling upon him to show cause as to why penalty should not be imposed on him under the income tax law.
The response to show cause notice furnished by the taxpayer 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.
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The said unit shall, after taking into consideration the response furnished by the taxpayer or any other person, as the case may be:
i) Make a draft order of penalty and send a copy of such draft to National E-Assessment Centre; or
ii) Drop the penalty after recording reasons, under intimation to the National e-Assessment Centre
iii) 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 taxpayer or any other person, as the case may be.
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The author of above article is Sneha Bhalotia.
