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How Does Faceless Income Tax Assessment Work?

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After founder of the country's largest coffee chain, VG Siddharta, committed suicide in July and allegedly left a letter that said that he was harassed by tax authorities, the government fastened the process to implement the faceless income tax (IT) assessment.

How Does Faceless Income Tax Assessment Work?
 

On 7 October, IT department's National e-Assessment Centre (NeAC) was launched in New Delhi that would make the assessment process nameless and faceless. The Central Board of Direct Taxes (CBDT) had also issued a circular earlier that said that all assessment proceedings in the financial year 2019-20 should be conducted electronically.

How does the new IT assessment system work?

  • Taxpayers will receive notices on their registered email address and in their accounts held on the IT department's portal "www.incometaxindiaefiling.gov.in." A real-time alert by way of SMS will also be sent to their registered mobile numbers intimating receipt of such notice.
  • Each notice or any form of communication from the IT department will hold a document identification number (DIN).
  • All replies to the notices from the IT department have to be made electronically in the account in the e-filing portal and not personally or through post (unless it is an exceptional case).
  • Assesses have 15 days to respond to the notices.
  • The response shall be considered successfully submitted when the individual receives the acknowledgement from the National e-assessment Centre.
  • After receiving a reply from the taxpayer, NeAC will allocate the case to an assessing officer at the regional level through an automated system.
  • Regional assessments requiring assistance from the verification unit or technical assistance from the technical unit shall go through the automated allocation system.
  • If the regional assessment unit requires further information or document from the assessee, the request will first be made to the National e-assessment centre.
  • A draft assessment order will be sent from the regional unit to the National e-assessment centre.
  • A personal hearing would be allowed in certain cases.
  • Hearings of the cases will be conducted exclusively through video links or any other such facility that does not require the assessee or his/her representative to be physically present.

The new system is hoped to reduce harassment of taxpayers and ensure that all tax proceedings including scrutiny are done on a centralised basis without direct interaction with the assesses.

Read more about: income tax itr taxes tax
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