Introduction

In the Union Budget 2019, the Finance Minister proposed the introduction of a plan for faceless e-assessment. The plan seeks to end the human interface between the taxpayer and the income tax department. The scheme completes the process of conducting faceless evaluation through electronic mode.

With the COVID-19 outbreak, physical interaction between the taxpayers and the revenue officials came to a standstill interalia due to the imposition of lockdown. Various deadlines prescribe under provisions of the Act were extend. Further on 13^th August 2020, Hon’ble Prime Minister launched ‘Faceless Assessment Scheme’ under the campaign ‘Transparent Taxation’.

Objective

To facilitate platform for an anonymous online process for the exchange of communication between the tax authorities and the taxpayers exclusively

by electronic mode for ensuring greater transparency and accountability.

Key Features

For the purpose of faceless assessment, the Central Board of Direct Taxes (“CBDT”) would set up the National E-Assessment Centre (NeAC), the Regional e-Assessment Centre to head the unit-based assessment conducted by Assessment Unit (AU) with appropriate assistance from Technical Unit (TU), Verification Unit (VU), and Review Unit (RU).
Each unit shall have its independent functioning, headed by the Chief Commissioner of Income Tax (CCIT). However, TU has been structured to report directly to Principal Chief Commissioner of Income Tax (Pr CCIT), NeAC
There will be no interaction between the taxpayers and the four units. Every communication will be between the taxpayer and National E-Assessment Centre (NeAC) and that too electronically
The NeAC may send notices via email, SMS, or the registered account of the taxpayers’ e-filing portal (www.incometaxindiaefiling.gov.in). The only mode of communication available to the taxpayers is filing of responses to the notices issued by NeAC via e-filing portal (www.incometaxindiaefiling.gov.in).
Similarly, all four units cannot communicate amongst themselves. Any communication amongst them would be via the NeAC;
The taxpayer’s case gets assessed under E-assessment if a taxpayer:
- furnishes income tax return voluntarily under section 139
- furnishes income tax return in response to notice under section 142(1) or 148(1) or 143(2)
- fails to furnish an income tax return in response to a notice under section 142(1)
- fails to furnish an income tax return in response to a notice under section 148(1)
- Scrutiny Assessment under section 143(3).
- Summary assessment under section 144..

However, the faceless Assessment Scheme shall not applicable to the-

Assessments in cases assigned to Central Charges
- Assessments in cases assigned to International Tax Charges.
The process under the E-assessment scheme is as follows: –
- The first and foremost step in the process is that the notice of scrutiny will be issued to the taxpayer by the central system. The notice issued will be sent electronically on the taxpayer’s account on the E-filing website, to the registered email address of the assessee.
- After the receipt of the notice, the assessee has to submit its reply within 15 days from the date of receipt of the notice to the National E-Assessment Center through his registered account.
- Now the assessee will no longer have to visit the department with regard to the submission of documents in response to
- the notice. And all the communication between the assessee and the department would be done electronically through the online portal.
- The NeAC (National E-assessment center) can assign scrutiny cases to any assessment unit through an automated allotment system.
- The assessment Unit will then, on the basis of the information and inputs, will prepare the draft assessment order and send it to NEC for review and suggest the changes if any.
- And if the order is prejudicial to the assessee, an opportunity will be provided to the assessee to respond. If the response is made by the assessee then it will be forwarded to Assessment Unit and if no response is received from the assessee then the draft order would be finalized and the records would be sent to Assessing Officer and the Assessee.
- The appeals against the orders of NeAC shall lie before the Commissioner (Appeals) having jurisdiction over the jurisdictional Assessing Officer. However, the faceless mechanism not introduce for appellate proceedings.

Challenges

The department shall have to clarify matters such as circumstances under which the assessee shall be eligible for personal hearing through video conferencing, whether the hearing would record, and if yes, whether it would make available to the assessee for future reference.
- The proceedings underneath DRP shall perform in a faceless method, it’s nonetheless being deliberate upon as to how the DRP would train its energy of constructing additional inquiry. Further, it’s uncertain as to how tax clearance certificates (underneath Section 281) will probably be issued.
- The legislation lays down the advice of initiation of penalty proceedings by any unit, it doesn’t pronounce a process for the conduct of proceedings. The query arises that whereas nearly all proceedings have gone the digital manner, why penalty proceedings have been stored out.

GST – related data

The availability of GST-related data on the income-tax e-filing portal and the data-mine of financial transactions effected by an assessee housed in Form.26AS play a vital role in the preparation of the case for filing of ITR as well as representing the assessee in scrutiny and assessment proceedings. A clear-cut analysis of the available data (readily available to the assessee. To the tax advisor even before filing the ITR and
of course to the tax collector, at all times) is a pre-requisite and any negligence in
its consideration in entirety proves adverse to the interests of the assessee. An interdisciplinary approach has to adopt by the tax professional considering the data pertaining to statutes other than Income Tax.
- As the CBDT Notifications sets out a short time for the initial response and the nature of submission of data being in the electronic mode requires adequate preparation and
- checks for data-accuracy, the speed of reaction and response count in the successful completion of the assessment.

Drafting and Presentation Skills

Needless to say, the drafting and presentation skills of the professional convey the appropriate answers to the issues raised in the assessment. The skill and clarity of presentation play a vital role in the successful attainment of the assignment.
- The fact that the Taxman has access to accurate data of an assessee aggregated from different platforms, the integrity of the assessee and
- the professional by ensuring the filing of correct data and
- appropriate explanation of the impact on income computation, in
- the faceless assessment lays a foundation of mutual faith and
- goes a long way in a fair presentation of the case resulting in the fair assessment.

This immediate thought on the subject and we need to revisit the issue. And the whole spectrum of faceless assessment emerges only after some time and we shall always be on the look-out for effective and efficient service to the clients directly and

to the Economy ultimately. Tax professionals require to keep themselves up-to-date. The need for the same is greater now than ever before in the happening sector of Tax compliance.