IT department randomly picks up cases to remove bias from tax scrutiny
July, 20th 2020
The move is in line with the promise made by PM Narendra Modi and finance minister Nirmala Sitharaman to end harassment of genuine tax payers.
The income-tax department, which implemented faceless tax assessment from October 7 last year, has randomly selected 58,319 cases for scrutiny in the first phase and already resolved 7,116 of those, two finance ministry officials said.
The objective of the faceless assessment is to completely eliminate physical contact between the taxpayer and the taxman to make tax administration objective, transparent and corruption free, they said requesting anonymity.
“The faceless assessment system has been a game changer in the arena of direct taxation. It has empowered the taxpayers and has, as a foremost mechanism, altered the facets and perception of overall tax administration in India,” one official, who holds a senior position, said.
The official said this is the future of direct tax administration in India with automated and random allocation of income tax assessment cases without human interface at any stage.
The second official mentioned above said, 7,116 assessment cases have been already disposed of and assessment orders issued without any additions in the first phase. In 291 cases additions are proposed and the cases have been sent to the risk management unit.
“In all the above cases, the grievances of over-pitched assessment or harassment by the taxpayers/tax professional have been almost eliminated. The taxpayers have been advised to check their registered e-filing accounts or emails for notices or updates. Now, all the communications with taxpayers is made electronically by a central cell in Delhi and identity of all the assessing officers remains unknown to the taxpayers at all times,” he added.
The faceless system was first proposed by Prime Minister Narendra Modi in 2017. Finance minister Nirmala Sitharaman announced it in her first budget speech on July 5, 2019 and subsequently launched the system on October 7, 2019. The random selection of tax cases are done through artificial Intelligence and machine learning, with a reduced discretion or no human interface from the income-tax department, the officials said.
“Faceless Assessment has further brought in the concept of team based assessment with dynamic jurisdiction and has, thus, induced enhanced transparency, improved efficiency and resulted in superior standardisation of procedures,” the first official said. The system works under National Assessment Center (NeAC) headquartered in Delhi and eight Regional Assessment Centers (ReAC) located in Delhi, Mumbai, Chennai, Kolkata, Ahmedabad, Pune, Bengaluru and Hyderabad.
Now almost 99% returns are e-filed, the second official said. “Out of more than 6 crore returns filed annually, only about 3 lakh returns come under scrutiny on the basis of select risk parameters,” he said. He, however, added that some scrutiny cases are also selected manually on the basis of specified criteria. “Old assessments can also be re-opened if the assessing officer has sufficient reason to believe that some income has escaped assessment,” he added.