Faceless Assessment Scheme 2019

Faceless Assessment Scheme 2019 (A New ERA of Assessment Proceedings)

Income Tax Assessments, as the word itself says the assessment of one’s income tax liability on the basis of information and explanation produced by taxpayer himself i.e. assessee.

Income Tax is a levy on income earned in the taxable territory which is levied by the government of such territory. India is also not an exception to this and taxes are duly levied on Income earned in India. Although the levy is by the government but it’s calculation and further payment takes place on the basis of self assessment. Thereafter, Income Tax department selects among all such cases some of them for further detailed checking and reconciliation and then the concept of Income Tax assessment comes into picture. However, In certain scenario even if the self assessment didn’t take place, department initiates Income Tax Assessment proceedings on the basis of information and explanation available on record.

Over the years, the Income Tax Department has tried to simplify and make it easier for the taxpayer to comply with the rules and regulations as prescribed under the Income Tax Law. Whether it is related to computation of taxes or filing of return of income or assessment proceedings, Department has tremendously implemented smooth process and procedures to comply with.

Earlier if any PAN got selected for scrutiny assessment or Income Escaping  assessment, the taxpayer had to deal with it either through physical appearance i.e. face to face hearings with his jurisdictional Assessing Officer or through electronic submission of records. This process was although established one and convenient at some times even but also had shortcomings of its own like collusion among taxpayer and assessing officer, mandatory presence of taxpayer or his representative, lack of treansperancy, ruckless behavior of assessing officer etc.

Due to these reasons many times face to face assessment was like prone to harassment.

Therefore, there was a big need to streamline the process of assessment.

As a step towards becoming a “Digital Economy” and “Atamnirbhar Bharat”.The Government of India has taken several major reforms and “E-Assessment Scheme 2019” is one of them which changed the entire old process completely.

The “E-Assessment Scheme 2019” launched last year has now been amended to the “Faceless Assessment Scheme 2019”.

As also our Prime Minister said, “The relationship between the taxpayer and the government should be seamless, fearless and the one that cements mutual confidence.

“Faceless E-Assessment Scheme 2019”

Faceless Assessment Scheme 2019 is the way to promote transparency and accountability in the assessment process and empower honest taxpayers.

All the assessment proceedings will be made faceless and the launch of this facility also ends the relevance of geography free assessments on the lines of processing of returns.

System Structure of Faceless E-Assessment System

  • The National e-Assessment Centre (NeAC), located at Delhi will be the point of contact for communication with a taxpayer.All the functions would be through electronic means for which the NeAC will be the gateway and will function as such for all the flow of information.
  • Regional e-Assessment Centres(ReACs) are located across 20 cities with 30 headquarter and each of the regional centres, which will have a separate review unit and verification unit, will report to the National e-Assessment Centre (NeAC), that will issue randomized notices of scrutiny.“The officers and the staff in the ReACs will perform the functions relating to the assessment and verification function under the Income Tax Act, but all communications from the department to the taxpayer/assessee/third-party for purpose of the Act will be in the name of the NeAC.
  • The Assessment Unit would identify issues, seek information and analyse material to frame draft assessment orders.
  • The Verification Unit would conduct enquiry, examine books of account, examine witnesses, and record statement through video conferencing.
  • The Technical Unit would provide advice on legal, accounting, forensic, information technology, Valuation and Audit.
  • The Review Unit would review the draft assessment order- whether material evidence is brought on record, points of facts and laws are incorporated.
  • All communication among Assessment Unit(AU), Review Unit(RU), Verification Unit(VU), or Technical Unit(TU) or with assessee or any other person shall be through National e-Assessment Centre (NeAC).
  • Assessee has to file response for notice by issued by NeAC u/s 143(2) within 15 days to NeAC.
  • All Income Tax assessements are covered in this scheme except assessment that includes serious frauds, major tax evasion, sensitive and search matters.
  • Transition to Faceless Assessment Scheme – Where 143(2) already served by Income Tax Authority, or Return of income (ROI) not filed in response to 142(1), or not filed in response to 142(1) or 148(1) also covered.
  • Where assessee fails to comply with notice issued under section 142(1), or direction under section 142(2A), or notice issued for additional clarification/ documents (during assessment proceedings), NeAC shall serve show cause notice u/s 144.
  • NeAC through an Automated allocation system assign the selected case to Specific Assessment Unit. And every time NeAC will provide reasonable opportunity to the assessee before preparing draft order.
  • After completion of assessment, NeAC will transfer all the electronic records to Jurisdictional Assessingg Officer, for any further action as required under the Income Tax Act.

Procedure of Faceless Assessment