System driven E-Assessment scheme to make 360 degree change in the working of Income Tax Department


System driven E-Assessment scheme to make 360 degree change in the working of Income Tax Department


Income tax department has set in motion a massive faceless e-assessment scheme which will make a full 360- degree change in the way tax assessments are carried out in India. It will completely eliminate interface between taxmen & taxpayers. New e-assessment system would be totally e-driven without any direct human contact & aimed to remove corruption with high level of transparency & accountability. It is further aimed to eliminate the scope for biased or pressure oriented approach in the system. New e assessment scheme has a concept of team-based, jurisdiction free, paper-less, completely digitalized assessment.

Journey of E-assessment:

Cases under assessment in most of the cities in India are already on e-assessment mode, but not jurisdiction free. Journey of e-assessments started with a pilot project undertaken in 2015 to carry out assessment proceedings through an ‘email-based assessment’. Thereafter, it was extended to 7 metro cities where an option was provided to the taxpayers to avail the same. It was coupled with the launching of “Income Tax Business Application” (ITBA, or e-filing portal) as an integrated platform to conduct various tax proceedings electronically at the end of Assessing Officer.

Announcement for complete faceless & nameless e-assessments for the first time was done by CBDT in December-2018 followed by appointment of 9 members committee to provide quick roadmap for the implementation of such e-assessments system.  Result: Present E-assessment 2019 announced by the CBDT which will make not only procedural but also structural reforms in the present system of assessment. The new e-assessment scheme will make assessment totally jurisdiction free with automatic allocation system wherein no single authority will be the final authority to complete the assessment

Structure of New E-Assessment Working System:

E-assessment Scheme 2019 has created an independent set up of National e-assessment Center (NEC) at Delhi to ensure smooth implementation of the new system across the country. It is headed by Principal CCIT & backed by 8 Regional e-Assessment Centers (REC) at Delhi, Mumbai, Chennai, Kolkata, Ahmedabad, Pune, Bengaluru and Hyderabad to be administered by the CCIT. To make it robust, full-proof and to plug the loopholes under an existing assessment system, the following distinct units have been created in addition to NEC & REC:

–   Assessment units (To identify issues, seek information, analyze material & information, etc so as to frame Draft Assessment Orders).

–   Verification units (To Assist Assessment unit in conducting inquiry, examining witnesses, record statements through video conferencing, cross-examinations etc),

–  Technical units (To suggests & guide on legal, accounting, forensic, information technology, valuation, transfer pricing, and data analytics, etc to the Assessment unit).

–  Review units (To review the Draft Assessment Order & to check whether required materials / evidences are brought on record, facts & legal issues are duly  incorporated in the order, judicial decisions are aptly considered, arithmetic calculations are proper, etc)

NEC will act as a central link in all digital communication inter-se between other units, REC & NEC.

How New E-Assessment System will Work?

  1. Under the new e-assessment scheme, a taxpayer will never get to know the I-T officer who is handling the assessment as the concept of Assessing Officer is replaced by Assessment Unit. It could in any part of the country.
  2. There will be no single authority which will complete the assessment on his own; rather it will be a team based assessment wherein assessment unit will seek the help of verification unit for verifying the information, technical unit which can act as a knowledge bank for the assessment team. Most importantly, assessment unit will not pass the assessment order but will simply make the ‘Draft Assessment Order’ which will be forwarded to the NEC. Before finalizing the assessment order, NEC will forward the draft copy of assessment order to the Review Unit for its total consideration & may seek explanation from the taxpayer. Its only after this process, the final assessment order will be passed by the NEC.

Change is not easy to accept & implement. Every new system will have its own, new set of challenges & hindrances. However, the new e-assessment designed by the CBDT appears to be robust & futuristic. CBDT deserves kudos for such an excellent designing of the e-assessment. It will witness a 360 degree transformation in the way the assessments proceeding are carried out. In the next issue, we will surely discuss few other features of the scheme and the concerns & challenges in the new e-assessment era.

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