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Income Tax E-Assessment Scheme 2019

Income Tax E-Assessment Scheme 2019

by Sanjeev Archak

The Finance Minister in her Budget speech had announced the formation of  National E-Assessment Centre (NeAC) to handle all  Income Tax assessments. Consequently, the NeAC has been launched from 08th October 2019. In this post we shall examine the structure of E-Assessment Scheme 2019.

What is an Income Tax Assessment?

Every taxpayer has to furnish the details of his income to the Income-tax Department. The tax department examines the return of income for correctness.The process of examination is called as Assessment.

Income Tax assessment follows a chronology of:

1.Issue of notice by the Tax Department

2.Replies by the tax payer

3.Final orders by the tax officer.

This process requires the tax payer to appear before the Tax Officer and make submissions. This causes multiple challenges for the tax payer viz:

1.Keeping track of physical notices

2.Appearing before tax officer on the given date

3.Time taken for completing the assessment

Most importantly, there is a lot of scope for malpractice. 

Why is there a need for faceless E-Assessment? 

  1. NeAC  will eliminate human interface between Assessing Officer and Tax Payer
  2. There will be ease of compliance for taxpayers
  3. Quality of assessment, transparency will increase
  4. Cases of assessments will be disposed faster 

In other words,assessment’s will be  in electronic mode with no human interaction.All notice’s will now be issued electronically by a Central cell. The notices from the income tax department will now contain a Unique Identification Number.  This Central Cell will be the  point of contact between taxpayer and the tax department.

E-Assessment Structure

E-Assessment

 

Functions of National E-Assessment Centre (NeAC)

The NeAC will:

1.Send all notices/communication electronically

2.Assign cases to regional assessment centre through automated allocation system

3.Allocate cases to verification unit, technical unit through automated allocation system

4.Select draft assessment orders for review 

5.Providing opportunity to taxpayer before finalizing

6.Finalize assessment orders

7.Transfer all electronic records to jurisdictional AO for post assessment work

The National Centre will be located in New Delhi with 8 Regional Assessment Centre located at Delhi,Mumbai,Chennai, Kolkata, Ahmedabad,Pune,Bangalore and Hyderabad.

Consequently, assessments will not be done by jurisdictional tax officers. Hence, assessments will be allotted to tax officers by an automated system. For example,a tax return filed by a resident of Bengaluru will be assessed by a tax officer who may be located in any part of the country. 

Meanwhile tax payers will receive notices on their registered emails as well as on registered accounts on the web portal. Further,SMS’s will also be sent on their registered mobile number, specifying the issues for which their cases have been selected for scrutiny.

The replies to the notices can be prepared at ease by the tax payers sent by email to the National e-Assessment Centre or uploaded on the income tax portal. Above all,a tax payer  will not be required to appear before NeAC. The tax payers will be given an opportunity for a personal hearing via video conferencing.

Final Thoughts 

This is another significant reform initiated by Government after reduction in corporate tax rates . This reform is expected to bring relief to tax payers. 

In conclusion, hope this reform promotes the Ease of Doing Business in India. 

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