NEW DELHI: In order to maintain transparency in tax assessment and to prevent harassment of taxpayers, Prime Minister Narendra Modi on Thursday unveiled a platform which enables a range of new services including a faceless tax assessment, and appeal system along with a taxpayers charter.
Launched at an event called ‘Transparent Taxation - Honoring The Honest’, the platform will remove many avenues for tax harassment by officials. “Faceless assessment and the taxpayers charter came into force from Thursday, whereas the faceless appeal service will be available from September 25,” PM Modi said in his video conference address, adding that the new reform will instill a sense of fearlessness among the honest taxpayers.
This means all income tax cases picked up for scrutiny will be assessed electronically via the National e-Assessment Centre, where a central computer picks up tax returns based on risk parameters and mismatches, and then allots them randomly to a team of officers to take it through the process of scrutiny.
The tax department claims this move will substantially reduce interaction between taxpayers and tax authorities during assessment proceedings, and thus reduce any chance of corruption or harassment. The assessment scheme is not new and was launched on October 7, 2019.
However, initially, only 58,319 cases were taken up under the scheme. From Thursday, the scheme will be implemented for all cases. And while doing so, the tax department has restricted scrutiny power to only a small set of officials.
But the reform will not be applicable for cases relating to search and seizure as well as international tax charges, which will stay outside the ambit of faceless scrutiny. While experts have lauded the step, they note that much reform is also required in international taxation. “A lot needs to be done to streamline the issues faced by non- residents who invest in India and who are partnering for business in India. They need to have tax certainty. Almost every transaction of large amount ends up in litigation. This is a great deterrent,” said Daksha Bakshi of Cyril Amarchand Mangaldas.