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


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

In the last issue of The Tax Talk, we have discussed the new e-assessment scheme implemented by the Income Tax Department which is all set to make a complete 360- degree change in the tax assessments arena. Now assessment will be totally e-driven, team-based, jurisdiction free & paper-less. It will have an independent & distinct Assessment unit, Verification units, Technical units and Review units. National E-Assessment Center will act as a central link in all digital communication inter-se between all the communications. Before discussing the challenges & concern, let us look at some of the advantages in the new e-assessment system:

  1. With 24/7 availability of the system, Taxpayers can comply as per their convenience and comfort without any restriction of working hours and will remain unaffected by the Holiday, strike or non availability of the staff during the proceeding.
  2. Since assessment is system driven without control of any single authority over the proceeding, it is set to be more transparent & reliable.
  3. It will save time as there will not be any travelling time, waiting time, face time involved during the course of submission (except during video conferencing).
  4. The concept of “Draft Assessment Order” by the assessment unit and its re-examination by the review unit will result in more quality order and may control the biased or erroneous working. Hopefully, the draft order would be shared with the taxpayers before its finalization by the review unit as a result of which the taxpayers would get a chance to make a final written submission on the critical issue involved.
  5. In days to come, there will be a specialized assessment units for issue based limited scrutiny assessment like separate units for cases of high agricultural income, probable bogus penny stock, higher commission expenses, high share premium receipts, etc. It will lead to specialized focused working to deal with particular issue more efficiently.
  6. Issue of notice electronically to taxpayer’s at their registered email address & mobile app will not only save time in service of notice but will also reduce the courier and manpower cost for the income tax department. However, taxpayers would be required to be regular in checking the mailbox and communication from department.

New system is sure to cause lot of disruption in the long established present smooth functioning of the department. There are lots of challenges involved in the new system. More particularly,

  1. The size of documents to be uploaded may at times be bulky and voluminous. Scanning, uploading, visibility will be an issue during the course of assessment.
  2. There are certain limitations in the present system of e-assessment while uploading the files like
    a) Files beyond certain Sizes say 5 MB is not accepted.
    b) Only files in PDF is accepted and other files in JPEG, PPT, Words, etc cannot be uploaded
    c] Files naming protocol has to be followed.
    d] Contents with special character like “.,- & /* “ etc is not at all accepted which result in total disruptions.
    e] Non availability of the portal during maintenance hours or during peak hours of due dates etc.
  3. The document to be uploaded may be vernacular language whereas the assessment unit (being jurisdiction free) may be in altogether in different state. It will necessitate the need of translation of each such document in English language.
  4. Presentation & communication skill will be the most critical aspects during e-assessment proceeding. . Error in proper and apt communication/ presentation / understanding may lead to unjustified additions. Under the present system of assessment, the taxpayers were having an ample opportunity to explain the transactions with required documents even without any written representations. However, now drafting of representation would be critical as entire communication would mainly be through digital mode only, without much personal explanations To some extent, it could be compensated by the facility of video conferencing proposed in the new system.
  1. Being system driven, compliance would have to be done in a time bound manner. Every non – compliance will result in system driven penal notices in days to come. E-assessment system will keep a track of the un-responded notices and may result in automatic additional penal cost to the taxpayers. [Non compliance to notices of the income tax department may attract a penalty of Rs. 10,000/-]
  1. Since all communication are proposed to be at the registered email id and mobile number on real time basis, any change therein would require immediate updation at the portal. Taxpayers must ensure that their contact details are updated on the e-filing portal so that communication is received on a real time basis.  Taxpayers would be quite frequently required to access the email id to see if any communication or notices are there from the department. In days to come, lot of verification notices will be there at the email id of the taxpayers. Under present system, no penalty used to be imposed for non compliances to various notices received for cross verification [u/s 133(6)]. However, the new e assessment system will keep a track of the un-responded notices and may result in automatic additional penal cost to the taxpayers.

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 scheme. It is surely going to make the system more transparent, of course amidst lot of teething troubles and challenges.

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