Faceless Income Tax Assessment: Simplifying the Income Tax Process

The process of filing Income tax returns (ITR) can often be daunting, especially when it comes to scrutiny assessments and the submission of supporting documents. To streamline this process and enhance transparency, the Indian government has introduced the concept of faceless assessments. In this article, we will explore the procedure for making e-assessments and understand how faceless income tax assessments work under the Income Tax Act.

Understanding Faceless Income Tax Assessment

In traditional assessments, individuals were required to physically visit tax offices and submit documents to substantiate their claims made in the ITR. However, with the introduction of faceless assessments, this process has been revolutionized. Faceless assessments involve conducting scrutiny assessments in an electronic mode, eliminating the need for physical meetings and document submissions.

The National Faceless Assessment Centre (NFAC), along with other centers and divisions, has been formed by the Central Board of Direct Taxes (CBDT) to carry out these evaluations. The goal is to remove any human interaction between taxpayers and the income tax division, increasing process efficiency and minimizing the possibility of bias or improper influence.

Procedure for Making E-Assessment

The NFAC will send the person a digitally signed notice on their registered email ID and the e-filing site once a case is chosen for review. By logging into the e-filing account and going to the e-proceedings option under "pending action," you can access this notice. The person has the option of providing a full or partial response to the notice through their e-filing account.

When submitting a response, individuals have the option to provide their explanation within the space provided or attach supporting documents as an annexure. It is important to ensure that the size of the document being submitted does not exceed 50 MB. Once the response is submitted, the tax authorities will review the information provided and may seek additional details if required.

Seeking Adjournment and Personal Hearing

People can request an adjournment using the assessment tab of the e-filing portal if they need more time to gather material. A request for an adjournment may be made for up to 15 days. Additionally, people have the choice to ask for a personal hearing via video conference. Depending on the applicable rules, this request will either be granted or denied; if granted, the hearing will only be held through video conference.

Final Assessment and Dispute Resolution

The tax authorities will review the submission and supporting documentation after receiving the response. A final evaluation order will be issued if they are satisfied. They will, however, issue a draft assessment order if they are unsatisfied and suggest to increase the revenue or decrease the loss. The proposed evaluation order offers people two ways to respond. They have two options: either wait for the assessing officer to pass the final decision after 30 days, or submit their opposition to the variation to the Dispute Resolution Panel (DRP).

If taxpayers decide to appeal, they must do so with the Commissioner of Income Tax (Appeals) within 30 days of receiving the final assessment order. It is now simpler for people to make representations without having to personally appear after the assessment procedure was changed. Additionally, it encourages accountability and openness in the system of determining income taxes.

Conclusion

The introduction of faceless income tax assessments has transformed the way scrutiny assessments are conducted. By leveraging technology and eliminating physical interactions, the process has become more efficient, transparent, and accountable. Individuals now have the convenience of responding to notices, providing explanations, and submitting supporting documents through the e-filing portal. The faceless assessment scheme has undoubtedly simplified the income tax process, making it more accessible and user-friendly for taxpayers.

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