How Does Faceless Income Tax Assessment Work?

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.

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.

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