Faceless Assessment Under Income Tax |Flowchart|

The Faceless Assessment (earlier known as E-assessment) has been rolled out to remove the human interface between the taxpayer and the Income Tax Department.

Features:

• Selection of a taxpayer only through system using data analytics and Artificial Intelligence (AI)

• Automated random allocation of cases

• No physical interface, no need to visit the income tax office

• Dynamic Jurisdiction to Abolition of territorial jurisdiction

• Team-based assessments and team-based review

• Central issuance of notices with Document Identification Number (DIN)

• Draft assessment order in one city, review in another city and finalisation in third city.

• 2/3rd of the manpower is utilised for faceless assessment and balance for other functions.

E-assessment Centres:

The following centres are established to conduct e-assessment proceedings

1. National e-assessment Center (NEC)

The NEC will act as a regulatory committee to implement rules and regulations and monitor regional centres. It also assesses, verifies, modifies and send show-cause notices to the assessee if necessary.

2. Regional e-assessment Centers

The regional e-assessment centres will be established to implement the actions as informed by the NEC. The Principal Chief Commissioner shall monitor the division to assess regulation and process.

3. Assessment Unit

The following are the critical functions of Assessment Units:

• To verify the modifications in the draft,

• Suggest and assess modifications to NEC,

• Identifying details regarding payments or refund,

• Request information or to provide for the issues raised,

• Scrutinise the information provided by the assessee.

4. Verification Units

The verification units perform the following functions as per the regulation of NEC:

• Cross verification,

• Examination of books of accounts,

• Examining the statements or recordings of witness,

• Sending enquiry to assessment or technical units for clarification on documents.

5. Technical Units

The technical units are established to assist with legal, forensic and accounting. Similarly, information technology, data analytics, valuation, transfer pricing and other related technical requirements have also been established.

6. Review Units

The review units play an essential role by performing the following functions:

• Assessing all the documents sent by the assessee,

• Reviewing the draft assessment order,

• Cross verification of the material evidence,

• Reviewing the relevant points has been added as per the guidelines of NEC.

Flowchart of Procedure

Procedures of Serving Notice through e-assessment Scheme

1. Serving e-assessment notice to the taxpayer upon the discrepancy

2. The individual must reply within 15 days from the date mentioned on the receipt

3. Individual should respond to the notice only through the registered account. The response shall be notified by National e-assessment centre

4. no longer have to visit any I-T departments with regards to the notice received for submitting any documents

5. All communication between the individual and the department for verification or enquiry will only be through online

6. If the regional I-T departments require assistance from verification or technical unit, it will be processed through an automated system. The requirements such as:

   1. Requirement of additional documents or evidence

   2. Conducting enquiry or verification regarding the returns filed

   3. Seeking technical assistance from the technical unit

7. The NEC can assign scrutiny case to any regional centres through an automated allotment system

Procedures of Penalty Proceedings through e-assessment Scheme

1. Any draft order that initiates penalty proceedings should follow the following regulations:

   1. The draft order should be initiated as specified by the committee of NEC

   2. The penalty proceedings should be initiated by sending a copy to the assessee. The copy shall include demand notice, pending payments as well as details of the refund.

   3. The draft order should provide all the details of the penalty proceedings

2. The assessee should be notified in case of any modifications

3. The draft order can be assigned to any of the regional e-assessment centres through an automated allotment system

4. The assessee shall reply, upload or request the details through registered account only (online)

Procedures of Review Proceedings through e-assessment Scheme

1. The draft order or the proceedings can be reviewed in the case of:

   1. When the review unit concurs with the draft order

   2. When the draft order is set to review by the concent of NEC

   3. Providing suggestions for modification with regards to the draft order to the NEC

2. The NEC can apply, change or modify the draft order as per the suggestions received from the review unit as stated by the procedure

3. Upon revisions to the draft stated by the review unit, the NEC forwards to the Assessment unit

4. Assessment unit shall review the suggestions, modify if necessary and prepares the final draft to the NEC

5. The NEC finalise the revised order by the procedure

Procedures of Show-cause Notice through e-assessment Scheme

1. The assessee should respond to the show-cause notice within the stipulated time to the NEC

2. In case of no response, the NEC finalises the assessment as per the procedure

3. If the assess sends the details for the notice, NEC forwards to the Assessment unit

Finalising the Draft

1. The Assessment unit verifies the details sent by the assessee and forwards to the NEC for finalising the draft

2. In the modification of the NEC has no prejudicial interest towards the assessee, the NEC shall follow as per the procedure

3. Upon having a prejudicial interest toward the assessee, the NEC should provide an opportunity as per the procedure

4. The response should be reviewed/assessed as per NEC committee procedure

Sources: Faceless Scheme (incometaxindia.gov.in)

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