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Under Income tax act, some random files are picked by computer based system coupled with some manual selections for verification of income and taxes offered by a tax payer. Widely termed as scrutiny assessment.

For decades the assessment was done by  local jurisdictional officer, where it is a mass presumption that some mal practices have been done against the interest of revenue.

To tackle the above presumed mal practice, a idea of faceless assessment was floated. Initially the idea was that any assessment would be given to any officer for further processing and it will go on changing hands from time to time, so that no one has full control over the assessment and has the chance to harm the revenue.

For an example the case of mumbai based assessee would be given to an officer sitting at chennai. Once the chennai based officer issue some queries, the reply of assessee together with the issues raised would now be send to some officer sitting at rajkot and so on.

This system presumed that no assessee can ever contact any assessing authority for any favour as the authority will be unknown and keep on changing from time to time. Thus the chances of malpractices will be practically impossible.

Now, the final scheme for e assement has been launched. The new scheme is altogether a different game play and have nothing to do for the concept of anonymous assessment. The new scheme creates regional assessment centre, which will do assessment of cases.

For an example, a regional centre for west India is situated at Mumbai and have say 100 officers doing assessment for say, rajsthan, gujarat and maharastra. They will issue notices through emails to central system, who will in turn send it to assessee, which will be mostly through a automated system.

So, what changes occurred in the whole system. Just one. Instead of local jurisdictional officer a big office will do the scrutiny assessment. Nothing more than that, even now an assessee may go and visit the regional assessment centre, human probabilities can not be ruled out.

The changes which this system will bring is that now the assessment which was done at a decentralized levels like MSME sector, will be done by one big corporate centre working like MNC.

The best of human resource will be placed at this Corporate assessment centre, fluent in English and well adapt with computer system and automations.

But ont the other side 90% of assessee will be still the MSME, under advised  with  unqualified accountants or not so swanky consulting offices like BiG 4. Maximum assessee would not have the skill, language and understanding of the technical questions being raised and will be forced to visit office of Big consultant, who will charge them like anything. At most of the time the small assessee will end up paying more of fees to big tax advisory firm than the taxes paid by them.

Also there is no guarantee as to why the corporate assessment centre will not be hit by the presumed unholy nexus of “assessee-advisor-authority” and doing the things in the way past it had been done.

On the other hand, the things will become more inhuman, local problems may be not heard upon and innocent assessee may be penalised.

For an example, Gujarat remains closed for almost 15 days after Diwali. Now the assessment centre may not get a reply to the notice send for this period and unaware of the facts may not give an adjournment and the assessee may lend in unwarranted additions. Most of the assessee may not even understand english. Some emails go in spam, some email id may have been junked by the user and so on. All these will be the difficulties of small tax payers, who will not be able to deal with these big corporate assessment centres.

So, we must rethink whether the step taken for the benefit of small vulnerable assessee may not become a self destructive demon named Bhasmasur for small tax payers, under this new regime of corporate assessment centres.

CS Ranjit Kejriwal

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  1. Ssvas1966 says:

    Self destructive demon – Bhasmasur is the key point. Small and medium assessee’s will HV tough time and do also the jurisdictional AO who bears the brunt of this illogical method if scty. It’s better not to call as scty abd it’s a point based verification. If it’s information based query, it’s possible abd not perception based scty. Only time will tell what happens to this Bhasmasur. Distrust to the height and ineffective monitorubg me mechanisms appears to be the reason fir such peculiar methods of tax administration.

  2. Naresh says:

    The article is not very well researched. Income Tax Department, like any other Government Department takes time to change and adapt itself to such changes. In such a scenario, even these baby steps in the right direction, should be appreciated.

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May 2024