We are pleased to present the latest edition of Tax Street – our newsletter that covers all the key developments and updates in the realm of taxation in India and across the globe for the month of August 2020.
- The 'Focus Point' covers a deep dive into the Faceless Assessment Scheme 2020.
- Under the 'From the Judiciary' section, we provide in brief, the key rulings on important cases, and our take on the same.
- Our 'Tax Talk' provides key updates on the important tax-related news from India and across the globe.
- Under 'Compliance Calendar', we list down the important due dates with regard to direct tax, transfer pricing and indirect tax in the month.
Faceless Assessment Scheme 2020
On 13 August 2020, Hon'ble Prime Minister, Mr. Narendra Modi, launched the campaign 'Transparent Taxation: Honouring the Honest.' Under the campaign, below mentioned three schemes were introduced in relation to 'Direct Taxes':
- Faceless Assessment Scheme, 2020 (effective from 13 August 2020);
- Faceless Appeal (effective from 25 September 2020); and
- Taxpayer's Charter (effective from 13 August 2020) containing revenue authorities' commitments towards taxpayers and duties of/expectations from taxpayers.
Necessary guidelines for 'Faceless Appeals' are yet to be issued.
The Faceless Assessment scheme has been re-introduced by amending the existing notifications of the electronic assessment scheme launched in September 2019. All assessment orders to be passed after 13 August 2020 would need to be issued under Faceless Assessment Scheme 2020, and any order passed outside the scheme (except for the exclusions mentioned hereunder) will be considered as 'nonest,' i.e., never in existence.
The scheme is summarized in brief as under:
- Assessment will be a unit-based assessment headed by National E-Assessment Centre (NeAC) and conducted by Assessment Unit (AU) with appropriate assistance from Technical Unit (TU), Verification Unit (VU), and Review Unit (RU);
- Each unit shall have its independent functioning, headed by the Chief Commissioner of Income Tax (CCIT). However, TU has been structured to report directly to Principal Chief Commissioner of Income Tax (Pr CCIT), NeAC;
- There will be no interaction between the taxpayers and the four units. Every communication will be between the taxpayer and National E-Assessment Centre (NeAC) and that too electronically;
- The NeAC may send notices via email, SMS, or the registered account of the taxpayers' e-filing portal (www.incometaxindiaefiling.gov.in). The only mode of communication available to the taxpayers is filing of responses to the notices issued by NeAC via e-filing portal (www.incometaxindiaefiling.gov.in);
- Similarly, all four units cannot communicate amongst themselves. Any communication amongst them would be via the NeAC;
- All communications by NeAC would carry a Document Identification Number (DIN);
- Similarly, all responses filed by taxpayers must be electronically signed either by way of Digital Signatures or by way of Electronic Verification Code (EVC).
- Assessment under the Scheme will commence subsequent to the selection of the cases for assessment electronically. It is yet to be seen as to whether such selection would continue to be by existing Computer-Aided Selection Scrutiny (CASS) criteria or there would be the use of artificial intelligence/ machine learning in the selection of cases as well;
- Assessments to be covered by the
scheme are assessments initiated:
-Pursuant to issuance of a notice under section 143(2) of the Act, viz:
- Scrutiny assessments under section 143(3) of the Act;
- Best Judgment Assessments under section 144 of the Act
- Scrutiny Assessments under section 143(3) of the Act subsequent to the filing of return of income in response to a notice issued under section 148 of the Act for income escaping assessment;
-By way of an intimation by NeAC, where no tax return has been furnished by the taxpayer in response to the notices issued section 142(1) and 148 of the Act.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.