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Major Impacts in Income Tax Faceless Assessment Scheme

CA Umesh Sharma 
Updated on 02 September 2020

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Arjun (Fictional Character): Krishna, PM's "Transparent Taxation- Honouring the Honest" program has introduced us with the Faceless Assessment Scheme. How would be the functioning of such a Faceless Assessment Scheme?

Krishna(Fictional Character): Arjuna, the faceless scheme aims to eliminate the human interference between the taxpayers and the Income Tax department. There are Regional Assessment Centres, which would consist of Four Major Units – Assessment unit, Verification Unit, Review Unit & Technical unit. All Actions of AU, VU, RU & TU Officers are approved by the respective range heads. Drafting of notices would happen in one city, review in another, & finalization in the third city, attaining the objective of fair & just order.

Arjun (Fictional Character): Krishna, what will be the mode of selection for Faceless Assessments?

Major Impacts in Income Tax Faceless Assessment Scheme

Krishna(Fictional Character): Arjuna, presently, the cases were selected manually or through the system, or through tax evasion information. In the faceless Assessment System, there will be an automated random allocation of cases. So, no discretion to any officer in the selection, no selection except through system red alerts & no selection other than information based will take place. There will be Dynamic jurisdiction to any faceless team anywhere in the whole country. For example, Assessee is of Mumbai, the notice would be issued from Delhi AU, a review would take place from Chennai VU, & the Draft Assessment Order will be reviewed by RU in Ahmedabad.

Arjun (Fictional Character): Krishna, how would notices be issued in this new Faceless scheme?

Krishna(Fictional Character): Arjuna, in the present scheme, notices are being issued manually as well as through system. In the Faceless assessment scheme, there will be no discretion in the issuance of notices, because the notices shall be generated by system trigger alert. Notices shall be issued electronically & centrally through NeAC (National e-Assessment Scheme) in Delhi.NeAC will be an independent office that will look after the work of the e-Assessment scheme which is recently notified for faceless e-assessment for income taxpayers.

Arjun (Fictional Character): Krishna, what would be the system for Faceless verification?

Krishna(Fictional Character): Arjuna, the scrutiny proceedings in present times is really a nightmare. The taxpayer has to visit the officer multiple times, & wait for a long time before meeting the officers. The faceless assessment scheme is going to prove as a big relief for taxpayers, as now no physical meetings would be held with the officer. No officer will call the taxpayer to his office. No more waiting for long hours outside the office, no human interference at any step & totally automated assessments.

 

Arjun (Fictional Character): Krishna, what are the changes in powers of officers in the Faceless Assessment scheme?

Krishna(Fictional Character): Arjuna, there used to be wide discretion between taxpayers & officers, which lead to a subjective approach and varying interpretations. Under the Faceless Assessment scheme, team bases assessments would take place. Ensuring no discretion with any individual officer.

 

Arjun (Fictional Character): Krishna, what should the taxpayer learn from this?

Krishna(Fictional Character): Arjuna, for the past few years, the tax department has been taking measures to bring a remarkable transformation in both direct and indirect taxes. The objective has been to create a taxpayer-friendly ecosystem by introducing greater transparency, simplification, and ease of meeting tax compliance. The introduction of the Faceless e-Assessment process by the Central Board of Direct Tax (CBDT) for income tax returns is a remarkable step towards achieving the objective.


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