From Left) S.R. Patnaik of Cyril Amarchand Mangaldas, Amit Maheshwari of Ashok Maheshwary & Associates, Kuldip Kumar of PwC India, Tarun Kumar of Taxmann
From Left) S.R. Patnaik of Cyril Amarchand Mangaldas, Amit Maheshwari of Ashok Maheshwary & Associates, Kuldip Kumar of PwC India, Tarun Kumar of Taxmann

Will faceless appeal against tax orders benefit assessees?

Budget 2020 has proposed to introduce faceless appeal or e-appeal against any order or demand from the tax authorities. Renu Yadav asks four experts if e-appeals can rob taxpayers of the chance to explain their cases effectively in person.

Budget 2020 has proposed to introduce faceless appeal or e-appeal against any order or demand from the tax authorities. Earlier, taxpayers could appear before the commissioner of income-tax (appeals) and get a face-to-face hearing. The move aims to bring more transparency, accountability and efficiency in the process, and reducing the chances of corruption and harassment of taxpayers. The government has already introduced a faceless assessment process. Renu Yadav asks four experts if e-appeals can rob taxpayers of the chance to explain their cases effectively in person.

S.R. Patnaik, Partner and head, taxation, Cyril Amarchand Mangaldas

It can be a success if it’s implemented effectively

As businesses embrace digitization, the Indian government has decided to encourage electronic exchange of information. While there are reservations being expressed from multiple quarters, most of them seem to be based on past prejudices of dealing with tax authorities.

The Finance Bill, 2020, proposes to take the proposal of electronic assessments one step ahead and proposes to introduce electronic appeals as well. If it works the way it is proposed, it will help taxpayers avoid personal interactions with the authorities and still get the appeal decided.

Some people are doubting the efficacy of the system, given that taxpayers may be unable to explain their case effectively because of complexities. However, if the taxpayer is aware that he will not get any additional opportunity of personal hearing, it will be fair to assume that he will try to explain his perspective in a more lucid manner. Similarly, the authorities should be willing to accept the taxpayer’s documented position in good faith and try to apply the law without any bias. If that happens, this may become a resounding success.

Amit Maheshwari, Partner, Ashok Maheshwary & Associates

e-appeal may not work in case the issue is complex

The concept of e-assessment was introduced in Budget 2019 and has been fairly successful. In Budget 2020, the government has introduced the concept of e-appeals for all the proceedings pending before the Commissioner of Income-tax (Appeals). The commissioner has the power to confirm, reduce, enhance or annul the existing order and if taxpayers fail to convince the commissioner, they may not get relief. In the worst case scenario, there may be tax additions for taxpayers compared to the assessment stage. The risk of enhancement or confirmation of tax demand is substantial.

Taxpayers pleading to the commissioner for relief should not be dependent on written submission without a face-to-face interaction. e-appeal can be a great idea for simple issues but not for complex ones. Email communication may not be the best mode of communication when the amount involved is high, and issues require deeper understanding, especially industry-specific issues. If this reduces the efficacy of the first-stage appellate process, it would be a travesty of justice and may result in more litigation.

Kuldip Kumar, Leader, personal tax, PwC India

It will do away with bias and help taxpayers save time

Tax matters may now be less taxing as far as interaction with the authorities is concerned, thanks to the increased use of technology and automation of processes. All the process is now online—be it filing of tax returns or their processing and issue of refunds.

Budget 2020 has rewarded taxpayers with faceless disposal of appeals, which is in line with faceless assessment. It’s going to immensely help the taxpayers as they will no longer need to visit the commissioner’s office and can submit their responses online from anywhere. e-appeal will help do away with bias and check possible corruption. The process will provide ease to the taxpayers and save their time, effort and, most importantly, address the fear of visiting the tax office.

There may be some practical challenges in explaining the matter or in putting up a counter argument. So taxpayers should prepare the submissions carefully with well-articulated supporting point of view and legal provisions for speedier disposal of appeals.

It is also an advantage for the government in terms of disposing of cases quickly and in an efficient manner.

Tarun Kumar, Deputy general manager, Taxmann

Personal hearing is essential for justice delivery

The government has already rolled out faceless e-assessment with the intention to eliminate personal interaction between taxpayers and tax officers. The taxpayer aggrieved by the order of the assessing officer can file an appeal before the commissioner (appeals) through the e-filing portal from the taxpayer’s registered account. However, the process thereafter is not faceless.

Personal hearing in the cases is an essential part of the judiciary process to properly explain the case and present the reasons against the order. The commissioner (appeals) and the Income Tax Appellate Tribunal are quasi-judicial authorities. It requires great skills of advocacy and putting objections strongly before the authorities and not merely submitting papers.

The FM needs to see that e-assessment is in its initial phase—both the taxpayers and the tax department are already facing challenges. This sudden introduction of e-appeals could lead to harassment of taxpayers rather than the intended objective of easing them. It will help reduce corruption, but the government should consider the principle of natural justice.


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