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E Assessment

Faceless Assessment Scheme 2020

Last Updated 30th Nov 2020

  • The e-assessment scheme was introduced in the Union Budget 2019-2020.
  • The faceless scrutiny assessment for taxpayers is carried out with the help of electronic mode without any human interface.
  • The e-assessment process enables transparent income tax scrutiny.
  • The assessment is carried out on randomly picked cases or on one’s which require a detailed assessment of funds
  • Taxpayers liable to the scrutiny assessment are sent a notice by the Income Tax department, called the notice as per Section 143 (2).
  • Assesses are required to respond to this notice within 15 days of receiving it.
INCOME TAX CALCULATOR

What is the e-assessment scheme or faceless scrutiny?

The e-assessment scheme was introduced in the Union Budget 2019-2020. The scheme brings into the picture a new way of scrutiny assessment. As per the announcement, with effect from 2019, the scrutiny assessment for taxpayers will be carried out with the help of electronic mode without any human interface. Thereby, the detailed scrutiny can take place without any face to face interaction of the taxpayer and the concerned IT department. The e-assessment process will reduce the chances of unfair and biased decisions on the part of certain tax officials; thus, this will enable transparent income tax scrutiny.

What is a scrutiny assessment?

Scrutiny assessment is the investigation of the taxpayer’s ITR filing patterns along with the ITR. The assessment is carried out on randomly picked cases or on one’s which require a detailed assessment of funds. The Income Tax department sends taxpayers liable to the scrutiny assessment a notice, that informs them about the scrutiny assessment being performed on their ITR returns. The notice is sent in the process of scrutiny assessment is entitled under the income tax notice as per Section 143 (2).

Meaning of Electronic mode communication

As per the e-assessment scheme, communications via electronic mode mean that all communications of the National e-assessment Centre with the assessee or with the party representing him or her will be done via an electronic mode. In addition to that, even the internal communication amongst the National e-assessment centre and the Regional e-assessment centre will be done using the same electronic mode of communications.

Delivery of electronic records via the e-assessment scheme

The electronic mode of communication, too, requires the delivery of records similar to how an offline scrutiny process requires. This is because the delivery of electronic records is a must to undertake further investigations or to keep a record of the scrutiny. However, to make the electronic mode of communication more reliable and authentic, this mode of communication is affixed with a digital signature and electronic authentication techniques. The delivery of this electronic information is delivered in the following ways:

  • A copy of the recording is placed to the assessee’s registered account; or
  • A copy of the recording is sent to the assessee’s or his representative’s registered email address; or
  • A copy of the recording is uploaded on the assessee’s Mobile app.

On the successful delivery of the records, the assessee or his or her representative is notified about the same. To seek more confirmation and to add more to the electronic communication delivery, it is mandatory for the assessee to reply to the notification via the registered account. On the successful submission of the response, an acknowledgement is received.

Procedure for faceless e-assessment

The procedure for the faceless e-assessment is listed as follows:

  • The faceless e-assessment will issue a notice to the concerned assessee, with a specific reason for the scrutiny taking place with a notice under section 143(2) of the Income Tax Department.
  • The assessee is then required to respond to this notice within 15 days of the date of the reception.
  • On receiving the response from the assessee, the National e-assessment centre will allot the scrutiny case through an automatic case allocation system.
  • On getting the case allotted from the National e-assessment centre, the regional e-assessment centre may request the national centre for the following:
    • to seek required information such as documents and evidence from the assessee. On this request, the national centre may issue a notice to the assessee for providing the regional centre’s requirement.
    • to conduct verification by enabling an automatic allocation of cases for verification to a legitimate verification unit.
    • to get technical assistance from the technical unit based on the automatic allocation of cases. This technical support will then be allotted to a technical unit in the regional centre.
  • Based on this information and support from the National e-assessment centre, the regional centre will then prepare a draft assessment order, that will either accept the ITR filed by the assessee or will modify the ITR. This draft is then forwarded to the National e-assessment centre.
  • The National e-assessment centre will then re-consider this draft order by re-examining it via an automated examination process. On this basis, the centre will then finalize the assessment order and may issue a notice to the concerned assessee to pay up the penalties if any of it is applicable due to modifications made in the ITR. Apart from that, the assessee may also be allotted a chance to justify how or his ITR should not be accessed as per the draft. In some cases, the draft may also be sent for review to the review units in any of the regional e-assessment centres.

What happens after completion of e-assessment?

The completion of the e-assessment process is done when the National e-assessment centre transfers all the electronics records to the concerned accessing offer or the ‘AO’. Based on the commissioned draft, the assessing officer may take one of the following actions:

  • May impose penalty
  • May seek collection or recovery of the tax in demand.
  • May rectify the assessee's mistake.
  • May respond to appeals made.
  • May submit reports that are to be given to the commissioner, assessee or the court as per the case.
  • May seek proposal for the launch of the prosecution.
  • May look forward to the decision taken by the National e-assessment centre.

How is the new e-assessment scheme different from the offline scrutiny assessment?

The difference between the online and offline modes of income tax scrutiny is listed as follows:

E-Assessment Offline Scrutiny
Communications in the e-assessment mode of scrutiny take place in electronic mode via emails and video conferencing. As per the offline scrutiny, method communications take place via notice and paper works.
In this method of income tax scrutiny, no face to face interaction takes place between the IT department and the assessee. The offline scrutiny method may require the accession to visit the Income department in person if the need for it arrives.
The e-assessment scrutiny compromises of various functional units such as National e-assessment centre, Regional e-assessment centre, review unit, verification unit, and technical unit. The assessment, as per this method, involves only the assessee and the assessing officer or the AO.
This mode of automated faceless scrutiny is fair and reduces the chances of conspiracy. This method involves a higher risk of biased decision making on the part of the tax officer in concern, based on his personal interaction with the assessee.

FAQs

What is E-assessment in income tax?

E-assessment in income tax is a new way of income tax scrutiny, that was announced in the interim budget of 2019-2020. As per this method, the assessment of ITR returns and its filing patterns of a taxpayer are conducted without a face to face interface with the help of an electronic communications mode.

What is the faceless E assessment?

Faceless e-assessment is an electronic mode of income tax scrutiny that does not require the assessee to make a physical visit to the Income Tax department for the assessment procedure. As per this method, taxpayers can respond to the Income-tax notice via electronic mediums such as emails.

Which mode of e-assessment is better?

In comparison to the offline method, the online mode of e-assessment called the faceless scrutiny is better in terms of transparency. This is because the assessment as per the online mode takes place without any human interface but through automated electronic communication. Thereby, chances of biased, unfair and unlawful decision making on the part of a tax official are minimal.

Is the e-assessment scheme authentic?

Advance tax is calculated by applying the applicable tax slab rate to the estimated income of the individual for the year.

Can salaried person pay advance tax?

Yes, the e-assessment faceless income tax scrutiny is authentic as the mode of communication in this method is affixed with the digital signature and electronic authentication techniques.

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