In its bid to curb corruption by making tax filing and their review faceless, the government has come out with e-assessment scheme, 2019 making it mandatory for all communication between tax department and taxpayers to be done online.
Now, tax notices will be issued by a centralised e-assessment centre requiring taxpayers to reply only through digital mode. Through mobile app, real time alerts would be sent to assessees updating about progress in the case.
The tax department has, however, reserved the right to allocate an assessment case to a tax officer where complexity is involved.
Moving to digital from the decades-old system of manual scrutiny, the tax department would use data analytics, artificial intelligence, machine learning and other latest tools to ascertain misreporting or evasion. The move is in line with the government’s promise to eliminate human interface in tax matters.
Finance Act 2018 had introduced three new sub Sections – 3A to 3C to Section 143 with a view to notify a new e-assessment scheme, where the assessment proceedings will be conducted in electronic mode, which will almost eliminate person-to-person contact to the extent it is technologically feasible.
Rakesh Nangia, Managing Partner, Nangia Advisors (Andersen Global) said that the idea of e-assessments, is in principle, an outstanding one but the administrative systems and procedures need to be developed to ensure that it does not result in uncalled-for injustice to the taxpayers.
“The use of artificial intelligence, machine learning, video conferencing, telecommunication application software, mobile app etc. in e-assessment process are few measures which emerged economies have already adopted long back. However, the digital capabilities may pose significant implementation challenges in India,” Nangia said.
The Central Board of Direct Taxes (CBDT), the policy-making body of the Income Tax Department had been running e-assessment as a pilot project in few major cities before expanding it pan-India. The initiative was launched to reduce visits by taxpayers to income tax offices and their interface with the taxmen, thereby bringing anonymity in proceedings.
Laying down the assessment procedure, the scheme says that National e-Assessment Centre shall serve a notice on the assessee under sub-section (2) of section 143, specifying the issues for selection of his case for assessment. The assessee would be given 15 days time from the date of receipt of the notice to file their response.
“The National e-assessment Centre shall assign the case selected for the purposes of e-assessment under this scheme to a specific assessment unit in any one regional e-assessment centre through an automated allocation system,” the scheme said.
All communications between the National e-assessment Centre and the assessee will be exchanged exclusively by electronic mode. The internal communication within the department will also be online.