Scrutiny Work to Now be Done Online by the Income Tax Department

The notice issued by the Central Board of Direct Taxes on 12 February 2018 states that the proceedings of all scrutiny cases except search-related assessments will be done online by the Income Tax Department through the E-proceeding functionality.

The Central Board of Direct Taxes had issued a notice on February 12, 2018, saying that apart from search-related assessments, all other scrutiny-case proceedings will be done electronically via the ‘E-proceeding’ functionality in ITBA/e-filing.

Features of the E-proceedings Facility

The following are some of the most important features of the e-proceedings facility:

  • The e-proceedings facility has been launched by the Income Tax Department as an initiative to carry out assessment proceedings.
  • It is an easy way for taxpayers to communicate with the Income Tax Department without having to physically visit the department.
  • The compliance burden would be significantly lower for assessees.
  • Assessees will be able to furnish their response and the relevant attachments by simply uploading them on the e-filing website.
  • The assessee and the Assessing Officer will be able to communicate seamlessly through the e-proceedings facility.
  • The Assessing Officer will be able to check submissions only via Income Tax Business Application.
  • Both the Income Tax Department as well as the assessee will end up saving a lot of time by using this facility.
  • The e-filing portal will have the information regarding all e-submissions.
  • All assessments are paperless, so the facility works as an environment-friendly option.

The Indian Government has been initiating the use of technology in all of its departments, and one of the main reasons for it is the need to reduce corruption, which it believes is achievable through machine dependency.

Section 14

Arun Jaitley, the Finance Minister of India, made an announcement during Budget 18 regarding the scheme for scrutiny assessment. The assessment procedure is specified in Section 143 of the Act. Sub-section (3) of Section 143 states that an Assessing Officer has the power to assess the assessee’s overall income or loss by issuing a written order, and the officer can also determine the amount payable by the assessee or the refund to be paid to the assessee based on the assessment.

Under sub-section (3A) of Section 143, the Central Government could notify the Official Gazette and create a scheme for assessing an assessee’s overall income or loss under sub-section (3) of Section 143 of the Act in order to impart greater accountability, transparency, and efficiency. To do so, the government may –

Do away with the interface between the assessee and the Assessing Officer during the course of proceedings Ensure optimal utilisation of resources via functional specialisation and economies of scale Implement a team-based assessment with vigorous jurisdiction.

Basically, the purpose of the scheme is to make assessments with greater accountability and transparency while reducing the interface between the taxpayer and the Assessing Officer. It also aims to utilise resources in an optimal manner while aiming to implement a team-based assessment. There are a handful of concerns regarding the clarity, however. For instance, there is no proper definition given to ‘team based assessment’. Moreover, an assessment with a dynamic jurisdiction suggests that taxpayers who live in a certain part of India could have their assessment conducted by an officer residing elsewhere in the country. There could be a number of major issues creeping up due to this, and it is thus crucial to rectify these issues.

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