The lowdown on e-Assessments

A discretionary assessment procedure has now become more efficient and transparent

To reduce the interface between tax authorities and taxpayers, the tax department has rolled out faceless and paperless assessments (e-Assessments).

The Central Board of Direct Taxes (CBDT) has launched an ‘e-Proceeding’ module through which the tax authorities can conduct proceedings under I-T law using electronic means as an interface between the taxpayer and the authorities. The CBDT, in February 2018, directed that all pending scrutiny assessment proceedings are to be conducted electronically in e-Proceeding facility through the tax payer’s account on the IT e-filing website. Under this module, the tax payer would receive a notice for assessment by email, which can also be downloaded from the taxpayer’s e-filing account.

Responding to the notice

To respond to a scrutiny notice vis e-Proceeding, the taxpayer has to first login to the account on the e-filing website by entering the relevant credentials . Then, he/she has to go to 'e-Proceeding' tab and select the link 'Assessment Proceeding u/s 143(3)’. After this, he has to then select ‘Submit’ to provide a response to the notice — one can enter the response in the space provided for remarks and upload all the relevant supporting documents as required in the notice.

While responding to a scrutiny notice initiated electronically, the taxpayer should keep some things in mind. For one, the response should focus on the areas highlighted in the tax notice in the case of a limited scrutiny. The submission should contain lucid explanations in relation to positions adopted in the tax return, along with adequate supporting documents evidencing deductions/exemptions claimed. The submission should be legible and annexures duly numbered for easy reference. W orkings and reconciliations should be given to explain amounts.

The taxpayer should also maintain copies of all documents. Where the issue involved is complex, requiring detailed explanation, the taxpayer could request the Tax Officer for a personal hearing in addition to making an online submission.

The tax officer will go through the response submitted and send subsequent notice for any clarifications or additional information that might be required. The subsequent notices will be issued through the on-line facility. The option for submission of response on-line will be closed seven days prior to time barring date or upon completion of assessment by the tax officer.

Jurisdiction-free

Apart from paper-less system, e-Assessment is also being planned across India as “Jurisdiction-Free Assessment”. For example,e.g. a Chennai-based taxpayer can be assessed by a tax officer present in any city in India.

The new system would do away with the tax officers’ discretionary powers to call for additional documents, records and, most importantly, ask the taxpayer to appear in person. However, in August 2018, the CBDT relaxed the mandatory requirement of conducting e-Assessments by carving out certain exceptions.

These include search cases, taxpayers who do not have a PAN, cases where tax return was filed manually and taxpayer does not have an e-filing account, cases where substantial hearing has been concluded prior to CBDT’s February 12, 2018 instructions and cases where there is administrative difficulty for conducting e-Proceedings.

Also, the tax officers have been directed to undertake personal hearing where books of accounts have to be examined, examination of witness has to be made and where show-cause notice is issued by the tax officer.

It is expected that e-Assessments will transform the erstwhile discretionary assessment procedure of the Income Tax department to a more efficient and transparent approach.

The writer is Tax Partner, EY India. The views are personal

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