Much has been said about the process as to how faceless e-assessments will happen from now onwards. Paper submissions and resubmissions, personal hearings, networking with the department, etc. etc. are going to be history in near future. We as professionals have faced all the challenges be it transition from manual accounting to simple computer accounting to ERP, manual challans to online tax deposits and submission of income tax returns and a few online submissions against notices, State Sales Tax / central sales tax to service tax and now GST which works total on the automated system, etc. During the last 30 years or so chartered accountants have experienced unexpected evolution be it Income Tax, Companies Law, or Indirect Taxes. The beauty is that being a hard-working community and one of the most well-equipped classes of professionals we sailed through the path with flying colors.
Discussions and debates are being organized to educate us as to how the faceless e-assessments will work under a new setup where for the first time in history jurisdictional boundaries have been removed and the assessments will be processed at multiple locations, multiple units by observing all sorts of secrecy. The flow of the assessment will start from the Assessing unit to the Verification unit to the Technical unit to the Review Unit all through the national E-assessment center.
It was on the 1st June 2015 when the digitization of the Income Tax department was set in motion by automating tax payment challans. The earlier paper challan having four copies were shelved with a new challan with date, Challan number, BSR Code, and the amount paid. This data became the basis of verification of tax paid by an assessee. Then came the era of uploading information regarding tax deducted at the source and the tough process of reconciling our data regarding tax deducted and uploaded with the records available with the department. Once this system stabilized it was during the assessment year 2009-10 when the data collected through automation was made available to assesses through 26 AS. Assesses could verify tax deducted by various organizations on account of different heads of income to use it for preparing of annual income tax returns. New income tax returns were designed by giving them a unique number to be used by various classes of assesses. The new income tax return forms were created with an aim to make them user friendly and relevant. The filing of online income tax returns was made mandatory from the assessment year 2007-08 by creating a centralized receiving and processing unit at CPC Bangalore.
For the last six/seven assessment years assesses were issued e-notices and were given a choice to file replies on the portal itself. Assessment orders with refunds were sent on emails and refunds, if any, transferred directly to the bank accounts of assesses. For the latest two assessment years, much of the weight was given by the department to do assessments online reducing face to face contact with the maximum possible.
On 13th August 2020, the Government of India vide its notification S.O. 2745E) named the existing “E-assessment” as “Faceless Assessment”. The intention of the Government is clear, and the message is that assessments will be E-Faceless Assessments by implementing near zero face to face contacts during process income tax assessments. The selection of security cases will also be based on the automation system and no human involvement will be there.
This will be a big challenge to our fraternity and to sail through successfully will require some extra efforts. Few among them are:
1. Once the notice is issued by the department it should be examined properly to understand what information is exactly required to be submitted.
2. In how many days a reply or information must be submitted.
3. Can information desired by the assessing officers be generated within the stipulated time and if not a reply for extension of time must be submitted.
4. Our reply or submission of data needs to be specific without creating junk.
5. Only well researched with relevant case laws, if any, be submitted to present our point of fact or law with utmost clarity. The language used needs to be simple to understand and to the point. Avoid language which can have a scope of many interpretations.
6. Be a little creative and try to visualize what will be the next question from the department in response to our reply or submission. Do not take a casual approach in replies or submission of data. Remember our submission is in writing and will become part of the proceedings till the dispute is over may be up to the highest court of the country. Built a case keeping in view the long journey of law we may have to travel.
7. Improve our drafting skills, better to have a partner or employee who is assigned the job to tackle notices received. Invest in the creation of such a department now keeping in view the number of notices and cases we will be facing after five years down the line.
8. The most important thing is to maintain records in the most meticulous manner with proper exhibits as if we are going to face ITAT in every case. This will create a history of the cases with us and will be ready for reference at any given point of time. Even if an opportunity to hear personally is provided after following proper procedure it will be online with a time limit. At the point of personal hearing, we will have to satisfy our assessing officer with the documentary evidence already submitted. Only records maintained properly will help us to make quick references and put forward our point of fact and/or law forcefully and with clarity.
The above points were few which came to my mind. I hope we will add new thoughts and ideas to this cause with the passage of time.