30-Nov-2020 Faceless Assessment
A new platform of 21st century tax system ‘Transparent Taxation - Honouring the Honest’ has been launched on 13th August 2020. Once again the Honourable PM has offered TEA to the all citizens of this country in a different form. TEA stands for Transparency, Efficiency and Accountability.
A new platform of 21st century tax system ‘Transparent Taxation - Honouring the Honest’ has been launched on 13th August 2020. Once again the Honourable PM has offered TEA to the all citizens of this country in a different form. TEA stands for Transparency, Efficiency and Accountability.
The platform is based on 3 pillars
a) Faceless Assessment,
b) Faceless Appeal and
c) Taxpayers’ Charter.
We take up first pillar of Faceless Assessment for which major announcements have been made and is likely to benefit most taxpayer. The charter has come into force from 13th August 20.
Till now, the tax department of the city where we live used to handle all the things related to taxes. Be it scrutiny, notice, survey or seizure, the Income Tax Department of the same city played the main role of Income Tax Officer. Now this role has ended in a way. Now it has been changed with the help of technology.
The CBDT has setup the following centres and units to monitor and administer the implement the Faceless Assessment.
- National Faceless Assessment Centre (NFAC) to facilitate the conduct of faceless assessment proceedings in a centralised manner, which shall be vested with the jurisdiction to make faceless assessment.
- Regional Faceless Assessment Centres (RFAC) to facilitate the conduct of faceless assessment proceedings in the cadre controlling region of a Principal Chief Commissioner, which shall be vested with the jurisdiction to make faceless assessment.
- Assessment units (AU) to perform the function of making assessment, which includes 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 identified, analysis of the material furnished by the assessee or any other person, and such other functions as may be required for the purposes of making faceless assessment.
- Verification units (VU) to perform the function of verification, which includes enquiry, cross verification, examination of books of accounts, examination of witnesses and recording of statements, and such other functions as may be required for the purposes of verification.
- Technical units (TU) to perform the function of providing technical assistance which includes any assistance or advice on legal, accounting, forensic, information technology, valuation, transfer pricing, data analytics, management or any other technical matter which may be required in a particular case or a class of cases, under this section and
- Review units (RU) to perform the function of review of the draft assessment order, which includes checking whether the relevant and material evidence has been brought on record, whether the relevant points of fact and law have been duly incorporated in the draft order, whether the issues on which addition or disallowance should be made have been discussed in the draft order, whether the applicable judicial decisions have been considered and dealt with in the draft order, checking for arithmetical correctness of variations proposed, if any, and such other functions as may be required for the purposes of review.
All communication among the assessment unit, review unit, verification unit or technical unit or with the assessee or any other person with respect to the information or documents or evidence or any other details, as may be necessary for the purposes of making a faceless assessment shall be through the National Faceless Assessment Centre.
Questions | Present Assessment System | Faceless Assessment System |
How case for assessment would be selected? | Cases were selected through
| Cases will be selected based on
|
How notice of assessment were issued? | Notices were issued both
| Notices will be issued electronically and centrally from the NFAC (Single point of faceless contact). |
Is all assessment would be Faceless? | NA | Still Search & Seizer cases would be handle by jurisdictional AO. |
What is a Jurisdiction of AO? | Single territorial jurisdiction | Dynamic jurisdiction - allocation of cases to any region on automated allocation system |
Who will do assessment? | A Jurisdictional Assessment Officer was in-charge for making assessment. | A Team based assessment would be conducted by AU under the surveillance of RFAC. |
How hearing and documents would be submitted? | Physical meetings of Taxpayer and officer for submission of documents and information. | No physical meeting with any officer or taxpayer. Documents would be submitted over electronic channel through dedicated portal. |
Request for documents, Verification or technical assistance in completing assessment? | The Jurisdictional AO was doing all such task. | Now, The AU shall
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Is adjournment application possible? | Yes, to Jurisdictional Assessing Officer | Yes, to AU through NFAC gateway. |
Whether Draft Assessment Order available? | No, it was at a discretion of Assessing Officer | Yes, AU shall make available Draft Assessment Order in writing. |
Whether any penalty proceedings for non-compliance during proceeding be levied? | Yes, by jurisdictional Assessing Officer | Yes, by AU. |
Any Verification of Draft Order? | No concept of Draft Order under existing system | Yes. NFAC shall examine Draft Assessment order and either
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Is suggestion by RU will go to same AU? | NA | No. NFAC shall assign the case to an AU, other than the AU which has made the draft assessment order, through an automated allocation system. |
Where Assessment record would be kept? | It was with a Jurisdictional Assessing officer. | NFAC shall, after completion of assessment, transfer all the electronic records of the case to the Jurisdictional Assessing Officer. |
Whether in any chance Assessment can be done a jurisdictional AO | NA | The Principal Chief Commissioner or the Principal Director General, in charge of NFAC, may at any stage of the assessment, if considered necessary, transfer the case to the Assessing Officer having jurisdiction over such case, with the prior approval of the CBDT. |
Is any other form of submission possible? | Yes | In a case where a variation is proposed in the draft assessment order or revised draft assessment order, and an opportunity is provided to the assessee by serving a notice calling upon him to show cause as to why the assessment should not be completed as per the such draft, the assessee may request for personal hearing so as to make his oral submissions subject to approval of the Chief Commissioner or the Director General, in charge of the RFAC. Once approved it shall be conducted exclusively through video conferencing or video telephony in accordance with the procedure yet to be notified. |
Any examination or recording of the statement of the assessee or any other person (other than statement recorded in the course of survey) shall be conducted by an income-tax authority in any unit, exclusively through video conferencing or video telephony.
The CBDT shall establish suitable facilities for video conferencing or video telephony including telecommunication application software which supports video conferencing or video telephony at such locations as may be necessary.