For Kolkata-based advocate, Archana Chowdhury, it is a burden she could easily do without. She will now have to keep a tab on the SMSes and mails from the Income Tax (IT) Department and forward them to her accountant for immediate action or face penal action in case of any delay. "So far, my accountant used to take note of my earnings and investments and file IT returns on my behalf, but now I will have to ensure everything is in order," she says. The recent Central Board of Direct Taxes (CBDT) directive has made it mandatory for taxpayers to register their mobile phone numbers and e-mail IDs for filing e-returns so that the IT Department can communicate directly with the assessee on all tax-filing issues.

The decision to send notices and demands directly to the assessee will compel professionals like Chowdhury to take more than a perfunctory interest in their own accounts, the existing IT rules and communications from the IT Department. They will also have to keep a record of the ITR acknowledgement, intimation of ITR, assessment order and demand notice or refund advice. It is also a source of worry for those who are not Internet-savvy.

THE NOTICE

According to the CBDT directive issued recently, all taxpayers will have to furnish their mobile numbers and e-mail addresses. For verification, the department will send two separate PINs— one on the registered mobile number and another on e-mail. To complete the registration process, taxpayers will have to use both PINs within 24 hours of receiving them.

The move will not only secure communication between the IT Department and taxpayers, but also improve efficiency of the e-filing process. The directive states that the validation of the mobile number and e-mail ID is a one-time process. However, if the taxpayer changes his or her mobile number or e-mail address, he will have to register the new number or e-mail ID again. Taxpayers have also been directed to include e-mails from the IT Department in the 'safe' or 'white' list so that the communication from the department does not get blocked, rejected or end up in the spam folder, the directive states. A single mobile number or email ID can be used for a maximum of 10 accounts.

IMPACT ON TAXPAYERS AND PROFESSIONALS

Since filing of e-returns is mandatory for taxpayers with an income of over Rs 5 lakh, the new rules will affect professionals as well as chartered accountants. What should also be kept in mind is that the relationship between the assessee and his accountant is based on mutual trust and understanding. By providing his or her personal e-mail ID and mobile number, the income tax practitioner had been absolving the assessee of unwanted hassles and taking full responsibility for filing the client's tax return.

While accounting professionals are not against CBDT's initiative to communicate directly with the assessee, "taxpayers who are not Net-savvy or do not regularly access their emails will stand to lose and might even end up paying penalties for delays," says Sanjay Poddar, senior partner of chartered accountant firm Poddar & Co. "There will be some who do not understand the importance of the communication from the IT Department as they are not well-versed with the tax laws," he says, adding, "If the message comes directly to the practitioner, he has the expertise to take corrective action immediately after consulting his client."

By limiting the number of users to only 10 per e-mail address and phone number, tax experts claim CBDT has created hurdles for consultants, especially small- and mid-sized proprietary chartered accountancy firms who have been filing IT returns on behalf of 400-500 clients by using their e-mail IDs and mobile numbers.

Says chartered accountant Madhav Sureka: "With the new procedure in place, I will not be able to do so. Nor will I be able to use and access e-mail accounts of these clients as it is against the law. The cap on e-mail IDs to 10 will only lead to the creation of more e-mail IDs. If each and every member of a family is an assessee and so are their business entities, we will have to create a separate e-mail ID if the total number of taxpayers exceeds 10," says Sureka.

CONCLUSION

Experts feel that the low Internet and mobile penetration in India may defeat the IT Department's endeavour to communicate with taxpayers directly. However, time will tell whether the new directive will achieve its purpose of bringing in transparency or will add to the ever burgeoning problems of bribery and corruption that some taxpayers indulge in to avoid paying income tax.