Faceless Assessment Scheme 2021
May 12, 2021
Faceless assessment scheme
The Central Board of Direct Taxes recently announced the Faceless Assessment (1st Amendment) Scheme, 2021.For honouring the honest taxpayers, the Prime Minister has launched a faceless tax scrutiny.
What is the faceless assessment scheme 2019?
The Central Government introduced the Faceless Assessment Scheme to provide greater transparency, efficiency and accountability in Income Tax assessments.It aims to improve the utilization of resources through economies of scale and functional specialization and suggest a team based determination of arms’ length price with dynamic jurisdiction.
What is the purpose of bringing the Faceless Assessment (1st Amendment) Scheme, 2021?
This has been transfer in to bring the provisions of faceless assessment scheme 2019 at par with the provisions of section 144B of the Income Tax Act.
Features of Faceless Assessment Scheme
Following are the features of faceless assessment scheme-
- Selection of a Taxpayer only through system using data analytics and Artificial Intelligence.
- Automated random allocation of cases.
- No physical interface, no need to visit the income tax office.
- Dynamic Jurisdiction to abolition of territorial jurisdiction.
- Team-based assessment and team-based review.
NATIONAL E-ASSESSMENT CENTRE (NeAC)
- It is a single point to act as a Central cell between Taxpayer and the Income Tax Department.
- It is located in Delhi and inaugurated on 7th October, 2019.
- The centre is directed by the Principal Chief Commissioner of Income Tax.
- It promotes the conduct of e-assessment proceedings in a centralised manner.
REGIONAL E-ASSESSEMENT CENTRE (ReAC)
- It comprises of Assessment unit, Review unit, Technical unit, and Virtual unit.
- Each ReAC is headed by Chief Commissioner of Income Tax (CCIT).
- ReAC established in India are in Delhi, Mumbai, Chennai, Kolkata, Ahmedabad, Pune, Bangalore and Hyderabad.
- It promotes the identification of points or issues material for the determination of any liability (including refund) under the Act.
- Seeking information or clarification on points or issues so analysed.
- Analysis of material equipped by the assessee or any other person, and such other functions as may be prescribed for the purposes of making assessment.
The verification unit promote the conduct of e-assessment to perform the function of verification, which includes-
- Cross verification,
- Examination of books of accounts,
- Examination of witnesses and recording of statements,
Review of draft assessment order including-
- Checking whether significant and material evidence has been brought on transcript.
- Whether suitable points of fact and law have been duly incorporated in the draft order.
- Whether issues on which addition, rejection should be made have discussed in draft order,
- Whether applicable judicial decisions have been considered and deal with in draft order,
- Checking for arithmetical correctness of modifications proposed.
The technical units are established to aid with legal, forensic and accounting. Alike, information technology, data analytics, valuation, transfer pricing and other relevant technical requirements have also been well-established.
THE INTIAL PROCESS
STEP 1: Case selected for scrutiny.
STEP 2: Goes straight to the National e- assessment centre (NeAC).
STEP 3: NeAC issues case number and allot it to assessment unit of a ReAC on random basis.
STEM 4: Process of assessment starts through e-filling portal.
STEP 5: NeAC, then issue notice as finalised by assessment unit to assessee- electronically.
STEP 6: The Assessment unit studies financial and ITR and other documents and prepares notice under Section 143(2).
PROCEDURE FOR ASSESSMENT
|1.||Serving e-assessment notice to the taxpayer on the
|2.||The single must reply in15 days from the date mentioned on the receipt||sub-clause(i)|
|3.||The individual should reply to the notice only through the
Registered account. The response shall be notified by National
|4.||Individuals no longer have to visit any I-T departments with regards to the notice received for submitting any documents|
|5.||All transmission between the individual and the department for
verification or enquiry will only be through online
|6.||If the regional I-T departments require aid from verification or technical unit, it will be progressed through an automated system. The requirements such as:
● Requirement of additional documents or evidence
● Conducting enquiry or verification regarding the returns filed
● Seeking technical assistance from the technical unit
|7.||The NeAC can assign scrutiny case to any regional centres through an automated allotment system.|
Procedures of Penalty Proceedings through e-assessment Scheme
|1.||Any draft order that proposed penalty proceedings should follow the following governance:
● The draft order should be proposed as specified by the committee of NeAC.
● The penalty proceedings should be proposed by sending a copy to the assessee. The transcript shall include demand notice, pending payments as well as details of the refund.
● The draft order should administer all the details of the penalty proceedings.
|2.||The assessee should be notified in case of any alteration.|
|3.||The draft order can be appointed to any of the regional
e-assessment centres through an automated allotment system
|4.||The assessee shall respond, upload or appeal the details through registered account only (online).|
Procedures of Review Proceedings through e-assessment Scheme
|1.||The draft order or the procedure can be reviewed in the case of:
● When the reexamine unit coincide with the draft order.
● When the draft order is set to reexamine by the consent of NeAC.
● Providing resolution for modification with regards to the draft order to the NeAC.
|2.||The NeAC can administer, customize or modify the draft order as per the instructions received from the review unit as stated by the procedure.||Sub-paragraph (a), (b) or (x)|
|3.||Upon reconsideration to the draft stated by the review unit, the NeAC
Forwards to the Assessment unit.
|4.||Assessment unit shall review the suggestions, modify if necessary
and prepares the final draft to the NEC
|5.||The NeAC decides the revised order by the procedure.||Sub-paragraph
(a), (b) or (x)
Procedures of Show-cause Notice through e-assessment Scheme
|Sr no.||Procedure||Rule /Act|
|1.||The assessee should acknowledge to the show-cause notice within the
stipulated time to the NeAC
|Sub-paragraph (b) of paragraph (x)|
|2.||In case of no response, the NeAC finalises the assessment as per the procedure||Sub-paragraph (a) of paragraph (x)|
|3.||If the assess sends the details for the notice, NeAC forwards to the Assessment unit.|
Finalizing the Draft
The Assessment unit verifies the details sent by the assessee and forwards to the NeAC for analyzing the draft.
In the modification of the NeAC has no bigoted interest towards the assessee, the NeAC shall follow as per the procedure.
Sub-paragraph (a) of paragraph (x)
Upon having a prejudicial interest towards the assessee, the NeAC should provide a hope as per the procedure.
Sub-paragraph (b) of paragraph (x)
The response should be reviewed/assessed as per NEC committee procedure
Paragraphs (xvi), (xvii) and (xviii)