27th September – E-assessment

Following the Finance Minister’s announcement that faceless scrutiny will be implemented from Vijayadashami day, i.e. October 8, 2019, the Central Board of Direct Taxes recently notified the E-Assessment Scheme, 2019.


What is E-assessment?

  • Usually, a few months after filing the returns, the Income Tax department sends to all assesses an intimation under Section 143(1) of the Income Tax Act, showing side by side the computation of income tax as done by the assessee as well as by the department.
  • A discrepancy often means a demand for more taxes, which you may have to pay up. Beyond this, if sometimes the tax authorities consider it necessary to ensure that the assessee has not understated income, computed excessive loss or underpaid taxes, they will serve a notice under Section 143(2), requiring the assessee to meet the assessing officer on a particular date and/or produce any evidence in support of the return.
  • This is commonly called ‘scrutiny assessment’. It is this personal interface between the tax department and the taxpayer that is being made online — or ‘faceless’ — now.

How will it work?

  • Every notice or order will be delivered to the assessee electronically: Either uploaded on the assessee’s e-filing account or mobile app (Aaykar Setu); or sent by email, followed by an alert in each of the cases. The assessee needs to then file his/her response through his/her e-filing account within 15 days.
  • On receiving the response, a national e-assessment centre (NC) will assign the case to an ‘assessment unit’(AU) in any part of the country through an automated allocation system. After going through the details and taking help from technical or verification units created for this purpose, the AU will pass the draft assessment order, either accepting taxpayer’s returned income or modifying it. This will then be looked into by the NC. A final assessment order will be made by the NC after giving the assessee an opportunity to be heard, if necessary.

Significance –

  • E-assessment helps in bringing greater transparency and accountability to the scrutiny process. It reduces the scope for bias or corruption on the part of the assessing officer.
  • The scheme introduces team-based assessment as well as dynamic jurisdiction, under which cases from one part of the country can be handled in any other part.
  • In case of a scrutiny, an assessee may need to worry less about harassment or other malpractices by the taxman, as his physical presence will no longer be required.
  • Doing away with the need to present himself at the tax office helps avoid the hassles and costs associated with travel.
  • Problems such as non-receipt or delayed delivery of notice or inability to be present at hearings due to other emergencies will no longer arise, as the process is online.
  • At the same time, one is allowed to seek a personal hearing to make oral submissions or present his case to the tax authorities under certain circumstances. But, even here, the hearing will be conducted exclusively through video conferencing, so as to avoid physical presence.

SourceThe Hindu Business Line

Also read: 26th September – The attack on agroecology

Questions  What is e-assessment of Income Tax Returns? How e-assessment by the Income Tax authorities can increase tax compliance in India?