The CBDT in an instruction dated August 20 has said that e-assessment will not be mandatory for assessments framed under Sections 153A, 153C, 147 and 144 of the Income-tax Act.
In a new set of instructions for its field officials, the Income Tax Department has stated that the new countrywide electronic assessment or e-assessments for 2018-19 will not be mandatory for scrutiny related to searches, income escaping assessment, late filing of returns beyond the prescribed deadline and cases where the taxpayer has filed tax return in paper mode.
The tax officials, however, would still be required to generate all departmental communications and notices through the department’s electronic platform, Income Tax Business Application (ITBA) for these cases, the instruction said.
Listing out seven exceptions, the Central Board of Direct Taxes (CBDT) in an instruction dated August 20 has said that e-assessment will not be mandatory for assessments framed under Sections 153A, 153C, 147 and 144 of the Income-tax Act.
Also, e-assessment will not be mandatory for set-aside assessments, assessments being framed in non-PAN cases, cases where income tax return was filed in paper mode and the concerned assessee does not have an e-filing account and in stations with limited bandwidth capacity. Additionally, e-assessment won’t be mandatory also for cases where substantial hearing had already taken place in conventional mode prior to the issuance of first set of instructions for e-assessment in February or where the principal commissioner/commissioner income tax permits conduct of assessment proceedings through the conventional mode.
Sections 153A and 153C of Income-tax Act relate to notices/assessment in relation to search and seizure. Section 147 provides for assessment or re-assessment by the Assessing Officer if he has reason to believe that any income chargeable to tax has escaped assessment for any assessment year. Section 144 allows assessing officer to, after giving the assessee an opportunity of being heard, make the assessment of the total income or loss to the best of his judgment and determine the sum payable by the assessee on the basis of such assessment if he/she has failed to file returns beyond the prescribed limit in case the income is beyond the exemption limit.
In these seven cases where e-assessment is not mandatory, tax officials have been directed to undertake personal hearing where books of accounts have to be examined, where examination of witness is required to be made and where show cause notice contemplating any adverse view is issued by the assessing officer.
The e-assessment facility has been rolled out across the country by the income tax department after this year’s Budget announcement. Finance Minister Arun Jaitley, in his Budget speech, had announced that the process of electronic assessment of tax returns would be launched in the country, which would “almost eliminate person-to-person contact, leading to greater efficiency and transparency”.
The tax department had earlier in 2015 launched a pilot, on a voluntary basis, for scrutiny assessment in five metros through the e-mail based assessment that was later extended to two more metros in 2016. In 2017, the tax department then rolled out the ITBA for electronic conduct of various functions/proceedings including assessments. This is integrated with the e-filing portal which facilitates electronic communication with the assessees.