The collection of taxes is essential for a country’s smooth functioning. Taxes that the government collects from the country's citizens form a revenue the government uses for the welfare of the nation's citizens. However, sometimes the task of collection of revenue can prove to be very tedious for the government either because of the unwilling attitude of the citizens to file their income tax in India or because of the colonial attitude adopted by the tax collection authorities that instilled fear in the minds of the citizens to go and pay their taxes physically. To evade this problem, the Government of India has introduced the Faceless Assessment scheme to make filing their income returns easily online without going to the office and paying it physically. This reform in the taxation system of a country is a landmark that seeks to promote transparency and accountability and hold the tax authorities accountable to the people.
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The faceless assessment instrument was introduced to enhance transparency as earlier taxpayers had to visit the department for scrutiny purposes which led to rampant corruption.
Structure for Faceless Assessment
To make the Faceless Assessment scheme smooth, the Central Board of Direct Taxes is responsible for setting up a few centres and units, determining their authority to make the process citizens-friendly, transparent and accountable.
Given below are a few bodies that are responsible for making this process easy and smooth-:
1) National e-Assessment Center: The role of this body is to control the electronic assessment process at the Central level.
2) Regional e-Assessment Centers: These centres work to make assessments under the authority of the Chief Commissioner of the regional Principal.
3) Verification units: This unit of assessment helps in enquiring, counter verification, analysis of books of accounts, recording of witness statements and many other such functions.
4) Technical Unit: This particular unit of Faceless Assessment includes advice on legal, forensic, IT, accounting and audit procedures and such other technical know-how.
5) Assessment Unit: This facilitates identifying matters, determining the material of a liability that could also encompass a refund, and helps analyse facts and other functions.
6) Review Unit: This unit is to analyse other information, such as whether the evidence, facts and other essential things are considered in the draft or not.
(Note: National e-Assessment Center is the coordinator among all the Centers and units.)
Procedure in Faceless Assessment
The National Faceless Assessment income tax centre gives a notice to the taxpayer telling him why their case is taken up. In return, the taxpayer has to reply within 15 days.
Only the National e-Assessment is the designated authority to entertain the case of a taxpayer when they fail to file an income tax return willingly. Or, the centre can consider cases about a notice provided to the taxpayer to file a tax return. These cases may be assigned to a specific faceless Assessment income tax Unit to entertain the National e-Assessment Center, particularly ReAC.The NeAC must collect documents and information from taxpayers and give it to AU at its request.
After this step, proper notice is provided to the taxpayer by the NeAC to procure the information that AU demands. In case of failure on tha taxpayers' part to furnish information, the NeAC may take action under section 144 of the Faceless Assessment of the act for the income tax filing. The taxpayer must submit their response to the notice within the prescribed time. The national e-assessment centre alerts a request for a specific inquiry to an investigation unit through a mechanical assignment system.
Assessment Collection and Recovery of Tax
The next step is that the national e-assessment centre shall send the report to the designated unit. If the taxpayer cannot file a response to the notice, the centre shall send a notice to the concerned defaulter under section 144. The defaulter taxpayer can then file a response to the notice issued to him by the centre under section 144. The designated assessment unit then can draft an assessment order keeping in mind all the relevant material thus gathered and either accept the taxpayer's returned income or reverse the taxpayer's return income and send a copy of such an order to the designated centre.
The authorised income tax faceless assessment unit shall also draft an assessment order that includes the details of the implementation of penalty perpetrations. The authorised review unit shall also investigate the draft assessment order referred to by the national e-Assessment centre. The national e-assessment Center then, upon receiving the approval of the review unit, can approve a draft assessment order or allow the taxpayer at the scene of a revamp being recommended.
In the following step, after considering the recommendations put forward by the review unit, the assessment unit will send the final draft assessment order to the designated centre. After finishing the assessment process, the national faceless income tax Center shall send forth all the electronic records of the investigation to the assessing officer, who has safe custody over all such actions and penalties as the law suggests. The catch here is that the international essence centre at any level of the assessment can transfer the investigation case to the assessing officer who has the save over such inquiry with the board's approval from backdating.
Faceless Approval or Registration
The central government has the power to design a scheme to give approvals by the income-tax authority under any clause of the act. This provision is made under section 293D. The regulations of face assessment will also apply to section 253 and section 279, which would be placed at the instance of a principal chief commissioner or Chief Commissioner Principal Commissioner to be sanctioned sub-section(1) or under sub-section (2).
The Government of India, in this case, may give orders that any clause of this act shall not apply or will be applied with exceptions, changes and conversions, which will then be exclusively mentioned in the notification which will be required to be issued in the official gazette. No such orders will be issued after the 31st of March 2022, and every notification stated above will have to be laid before both the houses of the parliament.
Tax evasion has always been a matter of concern for the government of India. Lately, a few laws and regulations have been attempted to be brought in by the government of India to tackle the concerns of tax evasion by taxpayers. This provided an impetus for lawmakers to implement the faceless assessment procedure in 2019. Most of the tax evasion has been done either willingly or due to the fear of the tax authorities. In this regard, faceless assessment is a landmark reform in the taxation system of the country to prevent the taxpayers from physically engaging with the tax authorities; in other words, the faceless assessment does not require a taxpayer to go physically into an office to file income tax returns instead it is an electronics system that facilitates the online paying of taxes without physically engaging with the tax authorities.
After reading the entire article, you must now know what faceless assessment is. Follow Khatabook for the latest updates, news blogs, and articles related to micro, small and medium businesses (MSMEs), business tips, income tax, GST, salary, and accounting.