CBDT chief says faceless assessment will remove taxmen’s subjective discretion in scrutiny cases

In a bid to ease taxpayer hardships, the tax department has ended individual discretion by bringing in faceless assessment of income tax returns that does not require the taxpayer to visit any office or meet any official, top tax officer P C Mody said on Monday.

A central computer picks up tax returns for scrutiny based on risk parameters and mismatch and then allots them randomly to a team of officers. This allocation is reviewed by officers at another randomly selected location and only if concurred, a notice is sent by the centralised computer system.

All such notices need to be responded to electronically without the requirement of visiting a tax office or meeting any official, Central Board of Direct Taxes (CBDT) Chairman Mody told PTI in an interview here.

Mody said the new system provides for assessment of income tax in electronic mode and "taxpayers need not see face-to-face any tax officer or visit an I-T office and need not run pillar-to-post on receiving income tax scrutiny assessment notice."

"The target is to complete assessment of these 58,319 cases by October-end. So far, we have done close to 8,000 cases. So far, the experience has been good," Mody said.

The cases selected for scrutiny assessment include all categories of taxpayers like companies, trusts, small business and salaried.

He said all the communications with the taxpayers are being done electronically by a central cell in Delhi and identity of assessing officers remains unknown to taxpayers and vice versa.

The department has moved from assessment by an individual tax officer to a team-based assessment wherein an Assessing Officer will be assigned a case for scrutiny, which will be overseen by an Additional Commissioner rank officer followed by a Principal Commissioner.

"In team-based assessment there is objectivity. So the individual discretion of tax officers will end, as it is a team-based decision. With the elimination of bias, vested interest and subjective discretion, we hope litigation will be reduced going forward," Mody added.

Earlier during assessment proceedings in scrutiny cases, taxpayers or tax professionals were required to make multiple visits to the income tax office. There were allegations and some incidence of discretion and subjective approach, which often resulted in high-pitched assessments.

"Ultimately taxpayer does not know who the assessing officer is. This will improve the confidence of taxpayers as their compliance burden of visiting tax offices is reduced," Mody said.

Finance Minister NirmalaSitharaman had announced the faceless assessment scheme in her Budget speech on July 5, 2019 and it was subsequently inaugurated on October 7, 2019. The government had in May this year notified revised Form 26AS which would have additional details on taxpayers' high-value financial transactions, like cash deposit/ withdrawal and property purchases, undertaken during a financial year. This would facilitate voluntary compliance and ease of e-filing of I-T returns.

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