The E-assessment scheme, if rolled out in its true intent, can be a game-changer is tax reforms, says the writer
The recent notification by the government pertaining to E-assessment scheme 2019 has made the income tax department’s scheme of assessing tax returns electronically effective. This move is part of the government’s attempts to erase the probabilities corruption by eliminating the human interaction in the assessment. However, personal depiction or representation is permitted as per the scheme in certain circumstances namely petitions against the assessment. The finance minister of India mentioned that e-assessment plan will be formally rolled out from 8th day of October 2019 when Vijayadashami will be celebrated. In the year 2017, while speaking at a seminar of senior tax officials, the Prime Minister of India had urged the need of e-assessment in income tax proceedings and secrecy of procedures by utilizing information technology.
To support the government’s proposal of impersonal and anonymous scrutiny, the Central Board of Direct Taxes (CBDT) has ordered for the creation of a National e-assessment centre (NeAC) in Delhi. At a later stage, Regional e-assessment centres (ReAC) are also expected to be established. The NeAC will have 16 officers and will be led by a Principal Chief Commissioner of Income-tax (PCCIT) as its topmost official. The centre will be an autonomous organization which will look after sole work of e-assessment. Notices will be served to the assessees by the NeAC and the subjects for selecting the cases for assessment will be stipulated on the notices. Within 15 days from the date of receiving response from the assessees, cases will be allocated to the assessing official by using an automated system. Nevertheless assessees or their permitted representatives desirous of personal hearing can do so and such hearings shall be conducted exclusively through video conferencing.
To support the government’s proposal of impersonal and anonymous scrutiny, CBDT) has ordered for the creation of NeAC
The primary advantage of e-assessment is saving of time. The scheme exempts the individual from travelling to the income tax office and waste few hours to meet the tax officer. Even if the person is out of the city, he or she can still react to the notices. Moreover the taxpayer will no longer be a victim to the probable corruption or exploitation of a tax officer. This is certainly a big alleviation for sincere taxpayers.
There is, however, a dark side in the scheme like in case of many other schemes of our government. Invariably many documentary evidences are called for such as property sale and purchase agreements, bank statements, balance confirmations etc during the hearing procedures. These documents need to be submitted electronically as per the scheme. The site capacity for uploading documents under e-assessment proceedings is very restricted and size of the soft copy of many documents surpasses this limit.
Furthermore, due to lack of experience in the private sector, many tax officials who have worked only in the income tax department are not in a position to comprehend the commercial transactions and the reasons for a transaction being structured in a specific fashion. This will prompt them to make undesirable additions to the income reported on the income tax return. Also, during the course of personal interaction, commercial validation of the transaction can be elucidated and skepticisms of tax officers can be cleared.
To conclude, to make the scheme effectual, operational hindrances have to be addressed to avoid injustice to the taxpayers of the nation. The space limit for uploading documents has to be enhanced. Proper training has to be given to the tax officers regarding trade practices and procedures to understand the commercial veracity thoroughly. It is only then the e-assessment scheme will really live up to its true potential and facilitate a win-win situation for both the tax department and tax payers
