Faceless Tax Assessment

Faceless Income Tax Assessment

In the Union Budget 2019 speech, the Honorable Finance Minister Nirmala Sitharaman introduced the new faceless tax assessment or e-assessment scheme to make the assessment procedure electronic and paperless. The Finance Ministry through its vide Central Board of Direct Taxes (CBDT) notification No. 61 and 62 issued on 12th September 2019, notified the new E-assessment Scheme.  The introduction and implementation of the faceless tax assessment was basically for the below two reasons-

  • To give a proper shape to the vision of the Honorable Prime Minister.
  • To eliminate the malpractices from behalf of the taxation officers.

The CBDT through its vide Circular No. 27/2019 issued on 27th September 2019 provided certain exceptions in the assessment scheme that makes it not mandatory.

Related Article: All about Faceless E-Assessment

Salient features of Faceless Tax Assessment Scheme:

The following are the following features of the new Faceless Tax Assessment-

  • A Central Cell has been created by the government, which will serve as a single contact point for the taxpayers and the Income Tax Authorities.
  • The notices for the faceless tax assessment to the taxpayers will be served through electronic mode by the cell.
  • The Central Cell selects the cases for assessment and allocates it through an automated process to the assessment units.
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Organization Structure of the Faceless Tax Assessment:

To implement the scheme all over India, an e-assessment center was set up by the CBDT in the country. The center will include the following-

  • National e-Assessment Center (NeAC): On 7th October 2019, a national level e-assessment was set up in New Delhi for regulating the faceless tax assessment in the country centrally. It will be headed by the Principal Chief Commissioner of the Income Tax Department.
  • Regional e-Assessment Center (ReAC): For making the scheme more operative and sustainable in the country regional centers were set up in 8 different cities all over the country. These cities include Ahmedabad, Bangalore, Chennai, Delhi, Hyderabad, Kolkata, Mumbai and Pune. The regional centers consist of the following four units to carry on the whole faceless tax assessment. These units are-
  1. Assessment Unit: The function of this unit is to facilitate the e-assessment conduct for the taxpayers. To perform the tax assessment this unit identifies the facts and issues that determine any liability of assesses. It also seeks clarification and information on the identified issues. It analyzes all the collected material furnished by the taxpayer to make the faceless tax assessment.
  2. Verification Unit: It facilitates the function of verification in the whole e-assessment service and process. It conducts the cross-verification, investigation, inquiries related to the books of accounts and financial statements. It also examines the witnesses and records all the statements of the taxpayer and other individuals.
  3. Technical Unit- It has been set to facilitate the function of providing any technical assistance related to analytics, accounting, data analytics, forensic, information technology, legal, management, transfer pricing, valuation and other technical matters required in the faceless tax assessment.
  4. Review Unit- Its functions include reviewing the drafted assessment order. It checks whether all the evidence and relevant material have been brought in the records, whether arithmetical corrections have been made to the draft and modification if any are to be made in the same.
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