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. The conspiracy is part of 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 seminar of senior tax officials, the Prime Minister of India urged the need of e-assessment in income tax proceedings and secrecy of procedures 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 the capital city of India. At 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. 

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 be no longer victim to the probable corruption or exploitation of a tax officer, who threats to make additions to the income unless one pays up. This is certainly a big alleviation for sincere taxpayers.

Shadowy side of the scheme

There is a dark side in the scheme like in case of all 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 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 fabricate win-win situation for both the tax department and tax payers. Elsewise the government’s ambitious faceless and nameless plan will be useless.

SYNOPSIS OF E-ASSESSMENT SCHEME

1. According to the scheme, scrutiny notice will be issued to the individual under section 143(2) of the Income Tax Act if he has concealed or under stated his income or over-reported losses and deficits.
2. The notice will be sent in electronic mode to the individual’s account on the income tax e-fling website. It will also be sent to the registered email address of the individual or on the mobile app of the income tax department which has the registered mobile number. 
3. Within 15 days from the date of receipt of the notice the individual will have to respond to the notice or order received through the registered account. 
4. Once the individual receives the acknowledgement from the National e-assessment Centre the response will be treated as effectively submitted.
5. As per the scheme individuals are relieved from appearing before income tax authority either personally or through approved representative relating to the income tax proceedings.
6. According to the scheme all the communications will be executed electronically including internal communication within the income tax department.
7. The scheme will be fully automated and the National e-assessment centre can allot the scrutiny case to any regional e-assessment centre through a computerized allocation system. 
8. If the regional assessment needs assistance from verification unit or technical help from technical unit, then such requests will be processed through computerized allocation system.
9. If the regional assessment unit wants further information or documents from the individual, then such request first has to be made to the National e-assessment centre.
10. The draft assessment order will be prepared by the regional assessment and will be submitted to the National e-assessment Centre.
11. The National e-assessment Centre will scrutinize the draft received in accordance with the risk management strategy prescribed by the CBDT.