Brief note on E-Assessment Scheme, 2019

Central Board of Direct Taxes has vide notification no. 61/2019 dated 12th September, 2019 has introduced a scheme called E-assessment Scheme, 2019 (Scheme). It shall come into force on the date of its publication in the Official Gazette. With the help of this scheme the Government aims to curb face to face assessment and bring in seamless, more efficient may of conducting assessment. This will further help in reduction of corruption and bribery charges as there is no direct communication between the tax authorities and the Assessee. All communication must be routed through the newly created central government body.

For the purpose of this Scheme, the Government will set up the 6 centres and units and designate them such tasks for the better and smoother conduct of assessments. The functions entrusted upon such centres and units are discussed.

  1. National e-assessment Centre (NAC): NAC will facilitate e-assessment proceedings in a centralized manner. It will be the central coordinator.
  2. Regional e-assessment Centre (RAC): RAC will facilitate e-assessment proceedings in the cadre controlling region of a Principal Chief Commissioner. It will act as the regional coordinator.
  3. Assessment Unit (AU): AU will be performing the function of making assessments.
  4. Verification Unit (VU): VU will perform the function of the verification including enquiry, cross verification, examination of books of accounts, witnesses, recording of statements.
  5. Technical Unit (TU): TU will provide technical assistance or advice on legal, accounting, forensic, information technology, valuation or other technical matters.
  6. Review Unit (RU): RU will review the draft assessment order and provide its suggestion.

The procedure for conducting the e-assessment has been defined in the Scheme. It has laid down the procedure and tasks that needs to be performed by each centre and unit for conducting the e-assessment.

E-Assessment

Diag-1: The relationship between NAC and others. The steps are discussed hereinbelow.

Steps:

A. The NAC will issue notice under section 143 (2) of the Income Tax Act, 1961 (the “Act”) specifying the issues for selection of his case for assessment.

B. The Assessee shall file his response within 15 days of the receipt of the notice.

C. The NAC will assign the selected case to an AU through an automated allocation system.

D. The assigned AU may request the NAC for the following:

a. Obtaining further information, documents from the Assessee or any other person.

b. Conducting certain enquiry or verification by VU

c. Seeking technical assistance from TU

E. Upon receipt of request from AU as per step D, the NAC will

a. issue appropriate notice to the Assessee seeking further information, documents etc.

b. assign enquiry/verification request to any VU through automated allocation system c. assign technical request to TU through automated allocation system

F. The NAC will receive the response from the Assessee, VU and the TU.

G. The NAC will forward the response received from the Assessee and the units to the AU.

H. The AU will make a draft assessment order and suggest penalty proceeding to the NAC.

I. The NAC will examine the draft assessment order with the Risk Management Strategy specified by the Board and it may decide to‑

a. Finalize the assessment order and send the demand notice with penalty

b. Provide opportunity to the Assessee

c. Assign the draft assessment order to the any RU through automated allocation system.

i. The RU may agree with the draft assessment order. In this case, it will revert the same to the NAC.

ii. The RU may provide its suggestions to the NAC and NAC will forward the same to the AU for consideration and repeat step H and I.

J. If NAC has given the Assessee an opportunity of being heard, the Assessee must furnish his response within the date and time as mentioned in the notice.

K. The response furnished by the Assessee shall be provided to the AU.

L. The AU after taking into consideration the response of the Assessee, may revise the draft assessment order and provide it to the NAC.

M. If the modification in order is prejudicial to the interests of the Assessee, the NAC will provide the Assessee an opportunity of being heard and step K and L will be repeated. However, if the modification in order is not prejudicial to the interests of the Assessee, the NAC may pass the final order along with penalty.

Other points:

  • The NAC may transfer the case to the Jurisdictional Assessing Officer at ant stage of the assessment, if it is considered necessary.
  • There will be no face to face interaction between the Assessee and IT authorities. If the Assessee wishes to have personal hearing for making his oral submission, the hearing may be conducted through video conference.
  • All communication within the IT department and with the Assessee will be in electronic mode only and all documents must have a valid digital signature affixed to it (EVC may also be allowed in case of assessee).
  • Hash enabled acknowledgement must be received by the Assessee as successful submission of response to any query.

Appeals to Commissioner of Income Tax (Appeals)

Any appeal u/s 246A of the Act preferred with the Commissioner of Income Tax (Appeals) against the order of the NAC shall be adjudicated by the jurisdictional Commissioner (Appeals) only. The process of this Scheme shall not apply to the appeals preferred with the Commissioner (Appeals).

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