Introduction
♠ The Hon’ble PM Shri Narendra Modi dreamed of corruption free India taking help of Information and Technology and conceived the idea of Digital India.
♠ In a national Conclave of Tax officials, he desired to introduce a faceless assessment scheme with a view to help honest taxpayers and impart greater efficiency, transparency & accountability in the assessment process.
♠ To make his dreams come true, the Central Government in the last few years has taken various steps to reduce human interface between the Taxpayer and the Tax Administration to ensure consistency, transparency and increase efficiency in the ability of Tax Administration with the help of information and technology.
♠ Hon’ble PM Narendra Modi on 13th August, 2020, rolled out a taxpayers charter and faceless assessment as part of the government’s effort to easing the compliance for assessees and reward the “honest taxpayer”. He also launched the “Transparent Taxation – Honoring The Honest” platform, in what he said will strengthen efforts of reforming and simplifying the country’s tax system.
Following are the key announcement regarding tax reforms:-
1. Faceless Assessment from 13th August, 2020.
2. Faceless Appeals from 25th September, 2020.
3. Taxpayers’ Charter
Analysis of legal provisions of Faceless Assessment
Central Government by Finance Act, 2018, inserted 2 new sub-section i.e. 143(3A) & 143(3B) which read as follows:
Section 143(3A): The CG may make a scheme, by notification in the Official Gazette, for the purposes of making assessment of total income or loss of the assessee under sub-section (3) so as to impart greater efficiency, transparency and accountability by—
a)Eliminating the interface between the Assessing Officer and the assessee in the course of proceedings to the extent technologically feasible;
b)Optimizing utilization of the resources through economies of scale and functional specialization;
c)Introducing a team-based assessment with dynamic jurisdiction.
Section 143(3B): The CG may, for the purpose of giving effect to the scheme made under sub-section (3A), by notification in the Official Gazette, direct that any of the provisions of this Act relating to assessment of total income or loss shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in the notification.
Provided that no direction shall be issued after the 31st day of March, 2020.
Thereafter, Finally, the Government notified a Scheme names as “E-Assessment Scheme, 2019” u/s 143(3A) vide Notification No. 61/2019 dated 12.09.2019 (further supplemented by the direction u/s 143(3B) vide Notification No.62/2019 dated 12.09.2019) to conduct e-Assessments proceedings w.e.f. 12.09.2019
Scope of E-assessment Scheme, 2019
As per the definition of “Assessment” provided in E-assessment Scheme, assessment means “the assessment of total income/loss u/s 143(3) of the Act”.
CG Vide Finance Act, 2020 made following amendments in section 143(3A) & 143(3B):-
In Section 143(3A), Word “Section 144” inserted. Now CG can also make scheme for the purpose of making assessment u/s 144 of the Act in addition to assessment u/s 143(3).
In Proviso to Section 143(3B), “Year 2020” is substituted with “Year 2022”. It means now CG can issue direction for scheme notified u/s 143(3A) upto 31st March, 2020.
Hon’ble PM on 13th August 2020 announced that all the assessment proceeding from 13th August, 2020 shall be conducted in Faceless Manner.
To give the effect to PM’s announcement, CG issued following two notification
i. Notification No. 60/2020-Income Tax:- In exercise of the power conferred u/s 143(3A) of the Act, CG amend the E-Assessment Scheme, 2019 and rename it is as Faceless Assessment Scheme, 2019. Further in the definition of “Assessment” assessment u/s 144 is also included which means now assessment order u/s 143(3) and best judgment assessment u/s 144 shall be passed under Faceless Assessment Scheme, 2019.
ii. Notification No. 61/2020-Income Tax:– In exercise of the power conferred u/s 143(3B) of the Act, CG amends direction issued vide notification no. 62 of 2019.
To give the effect to PM’s announcement CBDT issued an order u/s 119 of the Act dated 13th August, 2020 and directs that all the assessment orders shall be passed by NeAC through Faceless Assessment Scheme, 2019 except the following two assessment order:-
i. Assessment order in case assigned to Central Charges.
ii. Assessment order in case assigned to International Charges.
Procedure of Income Tax Faceless Assessment
1. NeAC shall serve a notice on the assessee u/s 143(2), specifying the issues for selection of his case for assessment.
2. Assessee will be required to give reply on the points mentioned in the notice within a period of 15 days.
3. Where the assessee-
i.A return has been furnished u/s 139 or in response to notice u/s 142(1) or 148(1) and a notice u/s 143(2) has been issued by the AO;
ii.Has not furnished his ROI in response to a notice issued u/s 142(1) by the AO;
iii.Has not furnished ROI u/s 148(1) and a notice u/s 142(1) has been issued by the AO
NeAC shall intimate the Assessee that assessment in his case shall be completed under e-Assessment Scheme, 2019.
4. On receipt of reply case will be assigned to an Assessment Unit (AU) in any Regional E-assessment Centre (ReAC) through automated allocation system.
5. Where a case is assigned to the AU, it may make a request to the NeAC for
a. Obtaining such further information, documents or evidence from the assessee or any other person, as it may specify;
b. Conducting of certain enquiry or verification by verification unit (VU); and
c. Seeking technical assistance from the technical unit (TU).
6. NeAC after receiving the request for obtaining further information, documents or evidence from the assessee or any other person has been made by the AU, the NeAC shall issue appropriate notice or requisition to the assessee or any other person.
7. The Assessee or any other person shall file his response to the notice referred in S. NO. (6) within the time specified therein or may make an application for giving more time.
8. Where a request for conducting of enquiry or verification has been made by AU, such request shall be assigned by NeAC to a VU in any ReAC through automated allocation system. After receiving the report from VU, NeAC shall forward it to concerned AU.
9. Where a request for seeking technical assistance has been made by AU, such request shall be assigned by NeAC to a TU in any ReAC through automated allocation system. After receiving the report from TU, NeAC shall forward it to concerned AU.
10. If assessee fails to comply with the notice issued u/s
a. Notice issued by NeAC for obtaining any information, documents or evidence .
b. Notice issued u/s 142(1).
c. Notice issued u/s 142(2A), then
NeAC shall serve a notice u/s 144 giving an opportunity to show-cause, on a date and time to be specified in the notice, why the assessment in his case should not be completed to the best of its judgment.
The assessee shall file response to the notice referred above within the time referred in the notice or within the extended time.
11. Where the assessee fails to file response to the notice issued by NeAC u/s 142(1)/142(2A) or fails to file information in response to any notice issued by NeAC, within the time specified in the notice or within the extended time, if any, the NeAC shall intimate such failure to the assessment unit
12. The AU shall, after taking into account all the relevant material available on the record make in writing, a draft assessment order or, in a case where intimation referred to in S. No. (11) mentioned above is received from the NeAC, make in writing, a draft assessment order to the best of its judgment, either accepting the income, or sum payable by, or sum refundable to, the assessee as per his return or modifying the said income or sum, and send a copy of such order along with the details of the penalty proceedings to be initiated therein, to NeAC.
13. The NeAC shall examine the draft assessment order in accordance with risk management strategy specified by the board, by way of an automated examination tool, whereupon it may decide to:-
a.Finalise the assessment as per draft assessment order and serve a copy of such assessment order and notice for initiating penalty proceeding, if any, to assessee along with demand notice; or
b.Provide an opportunity to the assessee 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 RU in any one ReAC, through an automated allocation system, for conducting review of such order
14. The RU shall conduct review of the draft assessment order, referred to it by the NeAC 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 such modifications, as it may deem fit, to the draft assessment order and send its suggestions to the National e-assessment Centre;
15. The NeAC shall, upon receiving concurrence of the RU, can finalize the assessment as per draft assessment order or issue an SCN to assessee.
16. The NeAC shall, upon receiving suggestions for modifications from the RU, assign the case to an AU, other than the AU which has made the draft assessment order, through an automated allocation system.
17. The AU shall, after considering the modifications suggested by the RU, send the final draft assessment order to the NeAC.
18. The NeAC shall, upon receiving final draft assessment order, can finalize the assessment as per final draft assessment order or issue an SCN to assessee.
19. The assessee may, in a case where SCN issued by NeAC has been served upon him, furnish his response to the NeAC on or before the date and time specified in the notice or within the extended time, if any.
20. NeAC shall,-
a. In a case where no response to the SCN is received, finalize the assessment as per the draft assessment order.
b. In any other case, send the response received from the assessee to the assessment unit;
21. The AU shall, after taking into account the response furnished by the assessee, make a revised draft assessment order and send it to the NeAC.
22. NeAC 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, finalize the assessment as per revised draft assessment order or issue an SCN to assessee
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 S. No. (19), (20) & (21).
23. All communications between the NeAC and the assessee, or his authorised representative, or any other person shall be exchanged exclusively by electronic mode.
24. Assessee will not know which is the Assessment Unit, Verification Unit, Review Unit or Technical Unit working on his case.
25. After the Assessment Order or Penalty order has been passed electronic record will be forwarded by the NeAC to the Jurisdictional AO for further action in the case such as recovery etc.
1. Exchange of Communication Exclusively by Electronic Mode
a) All communication made under Faceless Assessment Scheme, 2019 between the NeAC and the assessee shall be exchanged exclusively by Electronic Mode.
b) All internal communication made under Faceless Assessment Scheme, 2019 between the NeAC, ReAC and various unit shall be exchanged exclusively by Electronic Mode.
However, for the purpose of enquiry or verification to be conducted by VU shall be specify by Board.
2.Authentication of Electronic Record
Under the Faceless Assessment Scheme, 2019 an electronic record shall be authenticated by:-
a) The NeAC by affixing its DSC; and
b) The assessee or any other person, by affixing his DSC if he is required to furnish his return of income under DSC, and in any other case by affixing his DSC or through EVC.
3.No personal hearing under faceless assessment scheme, 2019
1. A person shall not be required to appear either personally or through authorized representative in connection with any proceedings under this Scheme before the income-tax authority at the NeAC or ReAC or any unit set up under this Scheme.
Exception
1. In a case where a modification is proposed in the draft assessment order, and a SCN is issued upon the assessee, then the assessee or his authorized representative, as the case may be, may request for personal hearing so as to make his oral submissions or present his case before the income-tax authority. Then The Chief Commissioner or the Director General, in charge of the ReAC, under which the concerned unit is set up, may approve the request for personal hearing.
2. 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 under this Scheme, exclusively through video conferencing.
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It was very informative…. Thanks kunal