Following the completion of scrutiny of assessments under electronic mode, appeals would continue through personal representation or an appointed counsel (iStock)
Following the completion of scrutiny of assessments under electronic mode, appeals would continue through personal representation or an appointed counsel (iStock)

Faceless assessment of income tax returns takes effect

  • Personal representation is allowed under the scheme in specific circumstances such as appeals against the assessment
  • The scheme is part of the government’s efforts to reduce human discretion in the assessment and scrutiny of tax returns

New Delhi: The income tax department’s scheme for assessing tax returns electronically without any personal contact between officials and tax payers has become effective, with the government notifying the e-assessment scheme, 2019, on Friday. Personal representation is allowed under the scheme in specific circumstances such as appeals against the assessment.

The scheme is part of the government’s efforts to reduce human discretion in the assessment and scrutiny of tax returns that in turn could help eliminate possibilities of corruption. The finance ministry had introduced an enabling provision for the scheme in the law through Finance Act of 2018.

The department has been running a pilot in select cities to test the feasibility of the new system of tax assessment for the last few years. Experts said e-assessment could reduce visits by taxpayers to income tax offices, thereby bringing anonymity in proceedings using technology.

According to Rakesh Nangia, managing partner, Nangia Advisors (Andersen Global), the use of artificial intelligence, machine learning, video conferencing, telecommunication application software and mobile applications in e-assessment process are a few measures which emerged economies have already adopted long back. “The idea of e-assessments is an outstanding one in principle, but administrative systems and procedures need to be developed to ensure that it does not result in an uncalled-for injustice to taxpayer," he said.

Following the completion of scrutiny of assessments under electronic mode, appeals would continue through personal representation or an appointed counsel.

According to Archit Gupta, founder and chief executive officer of ClearTax, a tax payer services firm, the scheme will bring more transparency and improve the image of the income tax department. “Since no personal hearings are allowed except at the behest of the taxpayer, which will also be conducted through video conferencing, this is a major step towards confidence building. All of this will impact tax compliance positively," said Gupta.

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