E - Assessment Scheme: Union Budget 2019 proposed Faceless Assessment Scheme. The scheme is finally passed by the parliament and subsequently implemented with issuance of notice U\S 143(2) of the Income Tax Act 1961 by designated authority authorized to issue notice U\S 143(2) of the Income Tax Act 1961. For the Assessment Year 2018- 19 the notices are issued by said designated authority of the department and the scheme of faceless assessment has therefore been implemented.
E - Assessment SchemeThe scheme seeks to eliminate human interface between the assessee and the Income Tax department. The Scheme lays down procedure to carry out faceless assessment through electronic mode. The Scheme lays following structures and procedures.
- Structure for E Assessment
- Procedure in E Assessment
- Procedure for levy of penalty
- Procedure for Appeal
- Communication and electronic record
- Appearance of taxpayer before centre and units
Structure for e-assessment
- National e-Assessment Centre:- A National e-Assessment Centre to facilitate and centrally control the e-assessment. All the communications between all the units for the purpose of making an assessment under this scheme would be through the National e-Assessment
- Regional e-Assessment Centres:- Regional e-Assessment Centres will be under the jurisdiction of the regional Principal Chief Commissioner for making assessment.
- Assessment units:- Assessment units are for identifying points or issues, material for the determination of any liability (including refund), analysing information, and such other functions related to the
- Verification units:- Verification units are established for conducting enquiry, cross verification, examination of books of accounts, witness and recording of statements, and such other
- Technical units:- Technical units are for technical assistance including any assistance or advice on legal, accounting, forensic, information technology, valuation, transfer pricing, data analytics, management or any other technical
- Review units: - Review units are for reviewing the draft assessment order to check whether the facts, relevant evidence and law and judicial decisions have been considered in the draft
Procedure in e-assessmentThe procedure to be followed for e-assessment is as below:-
- Obtaining such further information, documents or evidence from the taxpayer or any other person, as it may specify
- Conducting of certain enquiry or verification by verification unit; and
- Seeking technical assistance from the technical unit
- Finalise the assessment as per the draft assessment order 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
- 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
- Assign the draft assessment order to a review unit in any one Regional e-Assessment Centre, through an automated allocation system, for conducting review of such order
- Concur with the draft assessment order and intimate the National e-Assessment Centre about such concurrence; or
- Suggest such modification, as it may deem fit, to the draft assessment order and send its suggestions to the National e-Assessment
- In a case where no response to the show-cause notice is received, finalise the assessment as per the draft assessment order; or
- In any other case, send the response received from the taxpayer to the assessment unit
- In case 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 against the interest of the assessee is proposed with reference to the draft assessment order, provide an opportunity to the taxpayer for hearing and making submissions
- Imposition of penalty;
- Collection and recovery of demand;
- Rectification of mistake;
- Giving effect to appellate orders;
- 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;
- proposal seeking sanction for launch of prosecution and filing of complaint before the Court
Procedure for penalty
- Make a draft order of penalty and send a copy of such draft to National e-Assessment Centre; or
- Drop the penalty after recording reasons, under intimation to the National e-Assessment Centre
Procedure for appealAn appeal against an assessment order made by the National e-Assessment Centre under this scheme can be filed before the Commissioner (Appeals) having jurisdiction over the jurisdictional Assessing Officer.
Communication and electronic record
- All communications between the National e-Assessment Centre and the taxpayer, or his authorised representative, shall be exchanged exclusively by electronic mode; and
- All internal communications between the National e-Assessment Centre, Regional e-Assessment Centres and various units shall be exchanged exclusively by electronic
- Placing an authenticated copy of the communication in the taxpayer’s registered account; or
- Sending an authenticated copy thereof to the registered email address of the taxpayer or his authorised representative; and
- Uploading an authenticated copy on the assessee’s Mobile App; and followed by a real-time alert to the taxpayer.
Appearance of taxpayer before the centre and unitsA person is not required to appear either personally or through authorised representative in connection with any proceedings under this scheme before the income tax authority at the National e-Assessment Centre or Regional e-Assessment Centre or any unit set up under this scheme.
Merits and demerits of the SchemeThe E assessment scheme is expected to provide a proper revenue governance and is expected to reduce burden of appearance before assessing officers and carrying a physical voluminous record for verification and examination by the assessing officer. With the scheme the taxpayer can reply the queries at any time with the time frame allowed for reply at his own place without visiting income tax office.
- The Assessment under e assessment scheme will be quite time consuming as the information and responses and actions have to flow through multiple hands, offices
- Due to non human interface the assessing authorities may not understand issue properly and in certain cases lot of explanation is needed due to which there are chances of unjustified tax
- Uploading of information by taxpayer and downloading of information by different units and its verification and examination by the verification can be timely a big
- Since the remand proceedings are left with the jurisdictional assessing officer who may not be familiar with the issue therefore the system of remand may be time consuming and
- Rectification of mistakes, levy of penalty is also the responsibility of jurisdictional assessing officer who may not be familiar with the issue. This may result delay in rectification proceedings and the process of levy of penalty as